Investment fund or syndication

[Dave Zouski]

Ok I am a relativity new investor, we have done a few successful flips and a few BRRRR's. I have some family that has noticed and have inquired about giving us private money to use for investments. Its actually several family members, so we started thinking about setting up a fund that they can put their money into and we can use to purchase and flip properties. Now we have no clue how to go about doing this to make it legit, legal and profitable for everyone involved. Do any of you have any recommendations on where I can find out more info on this, or any advice on doing so? Any advice would be great.

Thanks

[Greg Scott]

You would need to contact an SEC attorney.  They would create a Private Placement Memorandum (PPM) for you, and typically will create LLCs with operating agreements to support the business.  The main purpose of the PPM is so that you won't get sent to jail for breaking securities law, but there are lots of other benefits of a good PPM.  In your case, the PPM will likely file an SEC exemption under Reg D 506(b).

It is worth pointing out that this is not a cheap activity and PPMs can cost $10K or more to create.