Creating Investment Group (family & friends)

[Jessica Monroe]

Good Morning BP, 

Over the last year or two I have shared my RE interest with family & friends. A handful of them have reached out to me and want to be a part of it, a few want to actively invest with me (buy &hold) & a few want to diversify their other investments. 

I am working on creating this business model but still in the beginning phases. So far what I know I need to do & working on.

- Create an LLC

- Finalize my business to plan to present to potential investors and outline how I believe the future business will be successful 

- Set up a team. I currently have a real estate agent, lawyer, insurance agent 

If anyone has any feedback or suggestions I would love to hear them! 

[Drew Shirley]

*** This is not legal advice and I am not your lawyer. ***

My reading of the Texas Securities Act is that IF

(1) all your investors are from Texas AND

(2) you are issuing debt and not equity (i.e., borrowing money instead of selling pieces of your company)

You are exempt from both the federal and state securities laws, which means you can advertise and issue the debt to multiple lenders or even a pool fund.

So you can offer them a note secured by a mortgage in the property(ies) you buy. 

Offering equity gets into the murky waters of securities registration, but if all the investors are Texans, you can offer equity to up to 35 friends and family investors (no solicitation allowed) or an unlimited number of accredited investors (solicitation allowed).

Then again, check back next week because things may have changed.