Rental Property Investor · Member since 2020 · 36 posts · 18 votes
Hi - I invest in small (2-4) multi-families through a LLC. For an in contract deal (~500k), I want to sign a promissory note with a friend for around $100K to pay part of the initial investment. (Payback details still TBD). He will be fully passive.
Am I selling a security in this case if it's a loan from a friend? or asked differently, can this put me in trouble with the law?
A loan is a loan is a loan unless it is not a loan. As long as payment of interest and principal are not dependent on the success or failure of your business venture you are fine.