All Forum Posts by: Amy Wan

Echo what’s been said above, and will add that a real estate syndication attorney can probably tell you whether terms of the deal are standard or deviate from standard, but you’ll still need to run the actual financials and conduct DD yourself.

@LaTara G. 506c offerings work well to advertise and bring in new investors generally, but not to any specific deal. If the thought is to do SEO or digital advertising to specific funding for a specific deal, you’re better off doing a 506b.

the above replies are true for single asset syndications. for a fund PPM, to the extent you arent replicating a former fund, i also say it depends on the client. I've turned around docs from start to finish in as little as a week (including entity creation), and i have other projects where it takes a good half year to finish the docs because the client took one or two months to review for every turn of docs.

@LaTara G.

Speaking as a securities attorney, other are right that it’s best to have relationships with investors already, but marketing strategies around a 506c are very different. Technically you can do almost anything that will get the word out—Twitter, Facebook ads, whatever. A word of caution though—I’ve seen clients spend a crazy amount of money on marketing with very little results. Having been in real estate crowdfunding since 2014 and represented the first 506c real estate deal, I would say that people rarely invest based off an ad; rather, they use 506c to reel in new interest folks, but those folks don’t usually convert or fund until several deals later.

@Albert Bui @Carlos Gonzalez Hi there, it depends on what exactly you're doing, but generally, if you and a business partner are actively contributing cash and significant, unique skills to a real estate project, it shouldnt be considered a security. But when you take on passive investors, it may or may not be a security, depending on several details.

Bootstrap Legal

Real estate syndicators doing small transactions often cannot afford an attorney for proper legal documents--the transactional cost just doesn't make sense. Plus, just getting the legal documents takes a lot of time--and that's time you don't have when you have a property under contract with limited days to raise capital.

Bootstrap Legal aims to help syndicators on small transactions get their legal documents more affordably and efficiently. My name is Amy Wan, formerly a real estate crowdfunding and syndication attorney, who has created software that uses artificial intelligence to help real estate syndicators draft their legal fundraising documents.

What we aim to do

Our main goal is to provide faster, affordable, and better access to legal services to everyday people and small businesses. Our mission is to help real estate investors build their vision, grow their company, and achieve their dreams.

Bootstrap Legal provides users the ability to prepare their own legal fundraising documents. Your documents are delivered to your inbox within 48 hours after an attorney has reviewed them for suitability so that you can raise capital with confidence.

Benefits of working with Bootstrap Legal

Transaction Cost: $5,000 – $7,500

Process: Total transparency, the process is in your control

Payment: Instant and secure payments online

Speed: 48 Hours

Working with an attorney

Transaction Cost: $10,000 – $25,000

Process: No transparency

Payment: Wires and checks only

Speed: 2 to 4 weeks

Use our platform to save $5,000 to $15,000 while saving 2 to 4 weeks of time!

How do we do this?

By using artificial intelligence, we are able to teach a robot the different aspects of different types of real estate transactions. Essentially, we are teaching a robot to do my previous job as an attorney. Because we can do this more efficiently than a human, it drives down the cost for the consumer.

Check us out at https://bootstraplegal.com/, follow us @bootstraplegal on Instagram, Facebook, Twitter and LinkedIn.

As an attorney on a lot of these deals, I've seen some weird stuff as well. Here goes:

1) Humans: No matter how perfect the deal is, the property is only a part of the equation. The sponsor/management team is so important--not just to save the deal, but to be rational, good business partners. I once saw a husband + wife + business partner team blow up because the husband passed away. The business partner, for whatever reason (some suspect she had an affair with the husband), went around to get all the investors to sue the wife. Doesn't even matter if its a family-family team--emotions can often defy rationality, and when that happens, things go sideways.

2) Undercapitalized & Poor leveraging strategy: They didn't raise enough. They couldnt get another loan. They didn't prepare for the possibility of a downturn. Don't be caught unprepared. Always prepare for the worst scenario.

3) Lack of experience: If its a beginning syndicator who isn't pulling together a team of more experienced folks or coaches or mentors, there's a higher risk of failure.

3) Lack of formality/Lack of Deal Structure: Handshake agreements or, my favorite, the "I pulled this template off Google and edited it myself". When there are no documents, there is no signed document to point to and say "you agreed to this" when an investor comes in the future demanding this or that. Similarly, I've seen some folks draft up their own stuff. Sometimes its not clear what the investment structure actually is (and it doesnt help if the sponsor is deceased), or they screwed up their structure and sponsor/investors are no longer economically aligned to perform.

 Agreed on peer group. I think its always important to call around and ask about the sponsor and management.

 Wow, that is straight up securities fraud. Total misappropriation of funds. Did anyone litigate?

It sounds like you want to be an active sponsor, as opposed to a passive investor. If that's the case, you could consider identifying a larger project, and then doing a JV or syndication to help you on your capital constraints.