How to set up correctly to raise capital?

8 Replies

Myself and a partner are looking to begin a capital investing group for the purpose of acquiring multifamily properties focusing on manufactured and mobile home communities.

We want to make sure that we are starting out correctly in regards to and legal issues that we will face raising capital from outside investors.

I look forward to the discussion.

Aaron H.
Mobile, AL

Find a securities attorney.  When you're "raising capital" what you're legally doing is "selling securities".  Its a complex topic with a lot of rules and regulations.  It gets especially complex if you're getting money from folks you do not personally know and already have a relationship with.

Something I am currently researching and educating myself on.  Lookup Alan Cowgill, he has some great courses on raising private money and the SEC and it is very reasonably priced.  Also lookup Craig Haskell with Valuehound Academy, has some great info on Syndication and a lot of it is free.  

I have no affiliation with either of these individuals other than I am currently taking or about to take some of their courses. 

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As other posters have said, this is a very complicated topic; there are several legally sound ways you can structure your business.  Try to learn as much as you can online and then meet with an attorney before you form an entity, and certainly before you begin soliciting investors.

It sounds like you want to create a portfolio of mobile home parks.  There have been a handful of similar projects posted on RealtyMogul, and a few on RealtyeVest.

Raising capital for a specific project is vastly different than raising capital for a fund where you are then deciding where to deploy the assets.  They are two entirely different animals.  I would highly recommend you seek legal council.

I agree with @Scott Krone . You can definitely find commercial real estate lawyers who specialize in whatever investment area you're interested in. I would find a few in the specific market you are interested in - having a lawyer/attorney that knows your market will be hugely beneficial - and asking them for a few case studies that you can review and choose from there. I'd focus on the investing/strategy side and let the professionals focus on the legal side for you, not exactly an aspect you want to take risks or try to save money on.

Thanks you all very much for the advice, I will keep updates on what I find on this thread.

Aaron

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