Real Estate Lender · Member since 2008 · 642 posts · 13 votes
I thought some of you might find this of interest...
Want An Investment That... Earns Between XX%-XX%
Well Secured With No Downside Risk
Provides Both End Term ROI & Monthly Income
Call XXX-XXX-XXXX for Free Report
Learn How To Earn Between XX%-XX% From A Guy That Buys Ugly Houses Well Secured
Short Term
Pay At End of Term & Monthly
Call XXX-XXX-XXXX for Free Report
Earn XX%-XX% Annual Interest on fully secured trust deeds or mortgages
Receive Monthly Income
Call XXX-XXX-XXXX for Free Report
Want To Learn How To Increase Your 401K by XX% A Year---Guaranteed? Invest in Secured Assets
Invest in Hard Assets That Can Be Improved Upon
Increase Your Monthly Dividend Income Potential
Call XXX-XXX-XXXX for Free Report To Learn How
Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
18y
Originally posted by "EZLoanz":
Want An Investment That... Earns Between XX%-XX%
Well Secured With No Downside Risk
Provides Both End Term ROI & Monthly Income
Call XXX-XXX-XXXX for Free Report
Scott Miller
Scott,
Thanks for sharing.
Be careful about the ads. In some publications you will get negative feedback or calls from regulators concerning what is being offered. It can be a violation of state or federal security laws.
In the one ad I left above you say "No Downside Risk". Very likely I or a good lawyer can find more than one downside. Hence the claim leaves you open to legal action later when a deal goes bad.
Best to imply that investors have to be accredited or otherwise screened so that you are being clear that this is not for everyone.
Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
18y
Originally posted by "EZLoanz":
Want An Investment That... Earns Between XX%-XX%
Well Secured With No Downside Risk
Provides Both End Term ROI & Monthly Income
Call XXX-XXX-XXXX for Free Report
Scott Miller
Scott,
Thanks for sharing.
Be careful about the ads. In some publications you will get negative feedback or calls from regulators concerning what is being offered. It can be a violation of state or federal security laws.
In the one ad I left above you say "No Downside Risk". Very likely I or a good lawyer can find more than one downside. Hence the claim leaves you open to legal action later when a deal goes bad.
Best to imply that investors have to be accredited or otherwise screened so that you are being clear that this is not for everyone.
Rental Property Investor · Baltimore, MD · Member since 2009 · 624 posts · 559 votes
17y
Having done this twice already and getting ready to do it again... the SEC has some very specific rules about these kinds of things.
Most of the rules captured under a generic term called 'Blue Sky Laws" deal with how you approach different levels of investors... John C, alluded to accredited or otherwise screened investors.
Also, if you have any plans to pool these funds, instead of using one persons funds for just one deal the rules really get challenging and the approach you use will include a Private Placement Memorandum and business plan.
Good Luck... and running this by a lawyer would not be a bad idea.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
This is great stuff but what is the legal way to do this? I keep running into concerns that this has to be done the right way or you could be running afoul of the law.
Rental Property Investor · Baltimore, MD · Member since 2009 · 624 posts · 559 votes
17y
Tim,
While there are GURUs out there that seem to have figured out how to navigate these waters (Alan Cowgell SP) seem to be one of them... the reality is that once you have someone lend you money you are entering some special realm involving securities. That is what my lawyer tells me.
Cowgell advocates that you should never mixe funds provided by multiple investors... doing so is considered "pooling' and there are any number of rules that apply.
The best approach is to do what every other serious investor looking for funds does... develop a Private Placement Memorandum supported by a business plan and shop it around. As I mentioned, I am on my third go around with this approach. This time to create an exclusive purchase pool for my clients... and this is the exact approach I am using.
A word of caution here... by shopping it around I don't mean posting it on a billboard or taking out ads in the newspaper.
Instead talkng to accountants, lawyers, financial planners and certain friends and family about what you are looking to do and how their clients or each of them individually can participate.
There are some stringent requirements regarding the types of investors you can talk to... but I will leave that for a different discussion.
Instead of pooling money, which you can do btw by first filling out the proper paperwork with your state (I have never done that and I'm sure it's a pain in the ***), I would instead give a 1st mortgage to the larger loan (PL) and 2nd mortgage to the smaller loan (2nd PL.. maybe for rehab work for example). As long as you keep within the LTV agreed upon this should be fine to both PL's.
There are also specific regulations that stipulate seeking private lenders outside of your state. Also,
If you go beyond a certain number of PL's on a yearly basis you would need to fill out paper work with your state as well. Remember, each state establishes it's own reg and exemptions.
In the end, I guesss your best bet would be to seek legal advise before pursuing PL for funding your deals.
Rental Property Investor · Baltimore, MD · Member since 2009 · 624 posts · 559 votes
17y
William... if you are using a banks funds for the first and private funds for the second... and only one second you, should be in good shape.
It can become tricky and probably illegal when you are using private funds for both the first and second... particularly if these private lenders don't fully understand (and believe me if everything goes south they will become the most uninformed people on earth) what the risk postures are of being in a first vs. a second position situation
Real Estate Investor · Santa Cruz, CA · Member since 2009 · 267 posts · 73 votes
16y
These ads definitely get the message across very simply in a way that will have the readers of the ad want more info.
However, the SEC, especially in this gruesome economic climate, is always on the look out for any investment offering better returns than what can be attained through the stock market.
Nevertheless, these ads shouldn't stir up any scrutiny... hopefully.