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Selling interest in partnership
Does anyone know if one has to be licensed to sell interest in a partnership to invest in real estate in the state of California? for example, if I want to gather 4 investors,each with $100k, would this be like a private placement, in which case I would have to be licensed for selling a "security?"
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#4 Off Topic Contributor
- Investor
- Round Rock, TX
Let me preface this by saying it is not legal advice and I am not an attorney. You should talk to an attorney.
If all parties are identified up front, know the terms, and agree to them I think you can likely just do a limited partnership. If the investment is only $400k I would think you could get away with not doing a PPM.
One thing you may consider doing is giving the LPs voting rights to make it clear that they are not buying solely securities. A good attorney that is familiar with exemptions in your state should be able to help. I doubt you need a securities attorney. A "regular" attorney will likely be just fine.
Are you raising money just in California or are some of the investors in other states?
I am assuming that the hedge fund model means you are taking a promote for your efforts in identifying and managing the project? Are the other parties going to be able to vote on what happens?