Starting a real estate fund. How to proceed?

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We have a private money guy in Florida that wants to pull in some of his friends for our Florida flips. Basically pool their money together and he would manage the fund. Does he have to do any SEC filings? It's simply people pooling their money together to loan to a company that does flips. There is no "public offering." I believe he would be paying each private lender 1% per month on their money.

Anybody have experience in something like this?

Not a lawyer but you'll want to talk with one. Penalties can be really steep. Instead of setting up a 503 the investors could start an investment club LLC.

@David Weis , Yes, SEC regulations would apply. 

Talk to a securities attorney. They will be able to help your friend choose the best type of structure to suit the investor's needs.