Orlando, FL · Member since 2011 · 176 posts · 23 votes
Hi;
If I were to pool investor funds together to loan out as a hard money lender, are there any special regulations I must follow? At my REIA club, another investor was putting together a fund for personal investments, which was subject to SEC regulations. Is this the same requirement for HM Lending?
Hard Money Lender · Davidson, NC · Member since 2012 · 69 posts · 34 votes
13y
Yes. Any time you pool together funds from investors for the purpose of lending it to others, you have created a security and must make sure your are in compliance with securities law. Consult with an attorney.
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
13y
I agree with what Bill Worsley said. Not only is it highly regulated, it is very expensive. A typical cost to form a fund is 25K in SEC attorney fees and paperwork.