Joint Venture vs Syndication

[Karen Margrave]

Have you had any experience with a JV or Syndication on real estate? What is the difference between a Joint Venture and Syndication when it comes to financing a larger real estate project?

I know with all the new regulations it's risky to advertise for investors, how then, does one go about finding Joint Venture or Syndication partners?

If you wanted to do a larger commercial project, what method would you choose for financing, in a situation where it would involve spec new construction and conventional financing wouldn't be possible.

NOTE: THIS IS NOT A SOLICITATION FOR INVESTORS... I AM SIMPLY TRYING TO LEARN THE DIFFERENT POSSIBILITIES FOR FINANCING LARGER PROJECTS FROM OTHERS THAT HAVE DONE THEM, AND UNDERSTAND THE LAWS REGARDING ADVERTISING FOR FINANCIAL INVESTORS. I DO NOT HAVE A PROJECT I'M TRYING TO FUND.

[Bill Gulley]

Karen, I suggest that you not take advice so much off any forum in these matters, but getting opinions of what to research is a good idea so that you can approach your attorney with the type of structure you might want and limit expenses.

A mortgage made on a participation basis can be considered a bond!

Having more than 3 parties in what you may present as a JV can become a syndication when money is raised amoung the partners with any security given.

State laws also address JV registrations, so to just go out and advertise to accredited investors should be investigated.. Your Secreatry of State and State Finance Departments should be a source of information and searching for securties issued will show what to stay away from.

I looked into having a syndication for 10M and the compliance issues and start up expenses, bonds, attorney fees, CPA, brokerage registration and brain damage just was not worth it. You'll need a compliance officer/broker or securities attorney, to keep you out of trouble, IMO. Not a DIY project. I'm rather astute in RE financing and regulatory matters and I would not attempt to put a syndication together alone.

I suggest you investigate a small C Corporation instead for larger RE projects with less than 24 (as I recall) shareholders. Good luck with your project....