Legal Advice, Advertising to get Investors/Partners

2 Replies

I remember hearing something about rules for gathering investors in real estate.

I have an LLC that focuses on buy and hold real estate. Partners provide down payment, we guarantee % returns for 3-5 years. Fairly common structure that has been discussed on the BP podcast many times. 

Are there any laws against advertising to get these partners? (advertising that we buy properties and partners get returns from the investment, etc). I am looking at using advertising space at a heavily frequented local spot, and I want to make sure I avoid any legal ramifications.

Thank you,

Daly

It likely depends on 1. What exactly you're offering, 2. How you are being compensated, and 3. How, and whether, you are licensed.

State real estate licensing boards have very specific rules about advertising for real estate licensees, and there are similar state and federal rules and regs for mortgage lenders, investment professionals, etc.  

If you are unlicensed, then you could possibly run the risk of broadcasting your unlicensed activity to the world with your ad. 

Obviously, it's hard to give specifics without a lot more info. These are just some general things to think about. 

Thanks Jeff!

 We wouldn’t be  servicing as an investment company, we are just a company that buys properties and partner with individuals who want to invest their money in properties with us (partner provides down payment, we split profits).

 Would we be allowed to advertise this? If so, we would probably just have to be careful how we word things, correct? 

-Daly