Posted by watchbilllw on October 11, 2004 at 05:45:15:
Speak with a competent attorney. The writing of the SEC rules and how they are promulgated state to state can be confusing. You are normally safe when you only speak with Accredited investors (people having over 1mm net worth excluding house) they are thought to be sophisticated enough to protect themself.
Structure for Hard Money - Posted by R Harrington
Posted by R Harrington on October 11, 2004 at 24:45:16:
I have investors interested in placing cash with me in my RE business. Transactionally, I would prefer to have the investor money in a separate LLC, governed by a strict operating agreement, that lends money on each deal under preset perameters (ie:
Re: Structure for Hard Money - Posted by tom
Posted by tom on November 03, 2004 at 21:41:07:
I have lend on such deals. tho it would be nice from your perspective to have control as outlined i would not sign up for such a deal. private money is very relationship oriented, and on a per deal basis. people with money have needs and you may meet those needs…but just like your needs change so may theirs. so deal by deal basis is most common for a number of reasons.
as for structure, a loan document is ok. i have also done them with L/O for really low down deals.
best,
tom
Re: Structure for Hard Money - Posted by Ed Garcia
Posted by Ed Garcia on October 11, 2004 at 12:32:11:
R.Harington,
You have already been giving by two of our participants to seek an attorney?s advice before acquiring your investors. I agree with both of them.
I can safely tell you that the SEC does not enter the picture, unless you put more then one investor in a given deal.
I?ve used and worked with private investors for 25 years so if I can be of any help, feel free to call me at (909) 944-0199.
Ed Garcia
Re: Structure for Hard Money - Posted by John
Posted by John on October 11, 2004 at 06:41:34:
As was already noted you definitely want to speak with an attorney before even discussing such a deal with a possible investor. Posting the concept here can be a violation so you might have already committed the offense.
One aspect that separates RE investing from investing in securities is tied to who controls the money and when the decision is made to invest vs. the decision to invest in the real estate.
You want to pool the funds or have the funds in an LLC. Then you want to decide when to invest it as per some formula/criteria. The more traditional RE investment would be the cash investor reviews the specific deal and the specific property, etc.
Watch out what you try and even what you say you would like to do. Solicitation is all it takes to be in violation.
John