Hey there, BiggerPockets! As you may know, I have a book coming out soon called Raising Private Capital. In it, I talk about doing deals with debt, which is borrowing money via a loan for the deal. I also talk about taking on equity investors, which gives those who invest with you direct ownership of the LLC that owns the real estate.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
Many real estate investors want to get into larger deals by raising equity investments from their investor database. This is very common on apartment building deals, commercial projects, and even projects involving single-family homes. Although these deals can be exciting game changers for your business, many investors get stuck out of fear of breaking rules with the Securities and Exchange Commission (SEC). There are plenty of misconceptions out there around the SEC and how it plays into the world of real estate investing.
For the SEC to get involved, your deal needs to be considered a security. If you don’t meet all the definitions of a security, there are no actions required to keep the SEC happy. If your deal does qualify as a security, there are further steps to take, and you should consider hiring a good SEC attorney to help you navigate the process.
Many real estate transactions do not meet all the definitions of a security and don’t qualify as one to the SEC. Unfortunately, there is plenty of confusion and bad information out there regarding what securities are and what they are not. This has caused investors to stay away from these types of deals altogether. This is a shame, because these types of investments can be very lucrative for you and for those who invest with you.
In today’s video, I analyze which deals qualify for regulation by the SEC and which ones don’t. You might be surprised by what doesn’t require SEC oversight. Check out the video to learn more!
Did you watch the video? What do you think?
Tell me your SEC questions below!