Updated about 12 years ago on . Most recent reply
Rule 505 vs rule 506
Looking at syndicating an apt complex, I'd like to use rule 505 rather than 506 in order to allow a few investors that may not qualify as "sophisticated." I'm comfortable with their understanding of the risks, and the amounts they're looking to invest are not their life savings or anything like that.
Are there any reasons one would want to meet the rule 506 qualifications instead? I realize 505 has a limit on the amount you can sell, but I'm not sure if that $5 million limit is the amount of money the partnership will invest, or the actual purchase price of the property?
I will be discussing these things with an SEC attorney but thought I'd ask here too.