Partnering/JV's/Syndication/

[Dave Gerlitz]

I am an experienced rehabber and flipper looking to start building cash flow with longer term holds on multifamily units. I believe I can raise about 500K plus some of my own funds to get started. If I function as the syndicator including acquisition, operation (with a separate management company) and disposition (whenever that is), what is fair in terms of dividing the monthly cash flows? I have had some people tell me they take just 1-3% for management fees (which seems low) and have some some people say they only do 50/50 deals, which seems high. Any thoughts? Thanks from a new bigger pockets member.

[Don Konipol]

Your syndication offering will probably be an exempt intra state offering so as not to have to comply with the expense of Federal (SEC) guidelines. Each state has different regulations concerning real estate syndication offerings. Although an individual state may exempt certain intra state offerings, such as offerings presented only to accredited investors or offering subscribed by less than a certain number of investors (35 is a popular number), the state guidelines if any for a state registered offering will tell you what the securities division of the state considers the minimum deal investors should receive from a syndicator.
State securities laws change with every legislative session. It is imperative to engage the services of an attorney with familiarity in the practice of limited partnership offerings. If proper disclosures are not made, or accepted guidelines followed, a lawsuit(s) is virtually guaranteed whether the venture is successful or not.