We have five properties in Indiana that are rented and free and clear. We would like to create a portfolio and sell off shares. Based on Zillow and my property manager, the value of all the properties is about 250K and they are generating about 4K/month. We are looking to sell off 25-60% of the portfolio as "shares" where investors would partake in monthly incomes and appreciation at time of sale of these properties. What is the best way to go about this?
You need to talk to a syndication attorney. @Mauricio Rauld have you come across this before?
From an investor relations & pitching standpoint, forget what Zillow says. What is your business plan to make a return for investors? What would a $100k investor earn on their investment? What is the exit strategy? Why would you sell shares rather than just sell the properties right now?
As multifamily syndicators, we need to raise money to buy properties we don't already own because we typically don't have all of the funds ourselves. Why would you want to sell off pieces of your portfolio, rather than just selling off properties?
Crowdfunding is still based on the same securities laws, so yes, the same rule still apply.
What we do is form a partnership/LLC where the private money bring ALL of the down payment which is 20% with our lender. We both sign on the loan. We do ALL of the finding, PM, business management etc... and split cash flow and equity growth 50-50. We each should earn 10-15% returns on equity over a 10+ year stretch.
Not sure if something similar could work for you? Maybe offer 50% ownership for the 20% down payment and leverage that to do what you want with the 80% financed part?