Posted by Rich-CA on April 01, 2008 at 13:19:37:
…not a state one since the SEC is a Federal Agency. It has to do with soliciting funds for investment. It applies to the TIC and REIT forms of investments, which are both Real Estate. It only applies if it is determined the the type and method of what is being offered is a Security as the Securities and Exchange Commission does not have authority over anything else.
Private $ - am I getting an orange jumpsuit? - Posted by Angela
Posted by Angela on April 01, 2008 at 13:16:46:
OK, so there is no â??Due-On-Sale clauseâ?? jail â?? but is there a private money jail? I have been given advice from friends who are in the securities industry (but not the real estate industry) that I cannot (in Indiana) solicit anyone for private money to fund projects unless I set up a separate business entity to do this and file with the SEC. Does anyone know anything about this? Everyone makes it sound so easy (â??just ask for money! …people will give it to you!â??) â?? well, people actually ARE willing to give it to me â?? only now I am a little apprehensive about taking it â?¦anybody have an idea or a resource?
Private $ - am I getting an orange jumpsuit? - Posted by John Merchant
Posted by John Merchant on April 01, 2008 at 14:32:58:
No reason or rule that says you can’t ask anybody to join you in a pvt RE investment…unless you’re offering them a partial interest along with a bunch of others, which would make it a securities deal if they’re being offered stock or something less than a deed or note secured by deed of trust.
Most sec. regs are state regs and laws, and only really big offerings, or those that go across state lines, are looked at by the feds (SEC).
So SEC probably not interested in your little deal and the state guys aren’t either, if you’re just trying to find one or two investors for your deal, and the investor(s) will be getting either a deed or deed of trust and note.
If you have a deal where you could use a pvt investor, go ahead and give your prospects a call.
Have a lawyer put together an LLC or p’ship for the two of you so both of you know your rights and responsibilities to the other.
LLC is better vehicle for you because that way you won’t be out there gettting the other guy in trouble, which might be the case with a gen. p’ship…what one partner does, might quickly make the other p liable, etc.
And on your pvt deals just be careful and don’t promise your investors the moon or any kind of guarantee (only banks can do that because of their being Fed. insured).
Of course if you’re just wanting a loan, you can give them a note secured by DOT and there, of course, you will be promising to repay as agreed.
But on a RE investment where you’d be buying and holding for resale, just don’t guarantee a certain performance or future profit, etc. as that’d make it illegal.
Private $ - am I getting an orange jumpsuit? - Posted by John Merchant
Posted by John Merchant on April 01, 2008 at 14:20:54:
No reason or rule that says you can’t ask anybody to join you in a JV…unless you’re offering them a partial interest along with a bunch of others, which would make it a securities deal if they’re being offered stock or something less than a deed.
Most sec. regs are state regs and laws, and only really big offerings, or those that go across state lines, are looked at by the feds.
So SEC probably not interested in your little deal and the state guys aren’t either, if you’re just trying to find one investor for your deal, and that investor is going to get either a deed or deed of trust and note.
So if you have a deal where you could use a pvt investor, go ahead and give your prospects a call.
Have a lawyer put together an LLC or p’ship for the two of you so both of you know your rights and responsibilities to the other.
LLC is better vehicle for you because that way you won’t be out there gettting the other guy in trouble, which might be the case with a gen. p’ship.