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?
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.
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.