All Forum Posts by: Robert Borr

@Robert Freeman if you intend to raise investor capital determine the securities law exemption that best works for your business model to properly build your investor network.

This is not legal advice and does not create an attorney client relationship.

@Nate Gottesman there is simply no substitute for experience. I recommend mentorship to anyone who is new to anything complicated that involves a substantial amount of money and/or can get you into legal trouble (those usually go hand in hand). Gaining experience in this business typically takes money - deposits, due diligence and legal generally come out of pocket prior to raising investor funds. Less mistakes cost less. There is also a component of financing that may require a track record and net worth. From my experience, successful syndicators either have or started with a coach. 

This is not legal advice and does not create an attorney client relationship.

@Franklin Marte I would echo everyone here and to add to @Aaron K., the dissolution provision of whatever agreement/entity you put in place ought to be drafted by a lawyer. Often times business partners skimp on their operating agreement and may not even consult an attorney, then when things go awry it costs ten times more (and can drag out for years) to resolve. Prevailing party attorney fees are also mandatory in Florida's landlord tenant statute, it would be prudent to add Chapter 475 to your study list.

This is not legal advice and does not create an attorney client relationship.

@Jasi Edwards consider seeking out a local real estate attorney or broker who is knowledgeable of the zoning regulations to see if this is feasible in your area. Also, double check with your lender because FHA does not typically loan on investment properties.

This is not legal advice and does not create an attorney client relationship.

@Andrew Hinton your statement that "any investment would be a qualifying investment transaction under state and federal mandates" does not lower my red flags when the point essentially raises how you qualify your deals. But if you only accept accredited investors then it is likely a Federal 506(c) exemption which allows for advertisement (and only allows accredited investors). 

To piggy back on @Theo Hicks, you may have an opportunity to display expertise by citing compliance standards, or use those standards to evoke trust. For example, a 506(c) requires all investors to be accredited. Potential investors may find comfort in the fact that all of the investors in the deal will be accredited. 

This is not legal advice and does not create an attorney-client relationship.

@Andrew Hinton your post raises red flags regarding securities compliance. You may want to start by finding out which SEC or intrastate regulation your firm uses to structure their projects. For example, Rule 506(b) has a complete prohibition on general solicitation, therefore pitching a specific project could disqualify that particular exemption. 

This is not legal advice and does not create an attorney-client relationship.

@Ben Leybovich it may be helpful to know what you think a syndication business model actually is if we are to further the purported intent of this thread. The precept "using other people's money" is the root of real estate syndication, which is regulated in such a manner to be a business unto itself.  As @Brian Burke mentioned, it becomes akin to that bank/investment firm offering investors opportunities. The twist (for most BP purposes) is that the sponsor finds the deal, which necessarily departs from the role of an adviser diversifying assets over what is available in the market. 

The syndication structures/waterfalls I have drafted are a comparatively high cost of capital/equity dividend rate when compared to hard money and certainly institutional financing. The trade off many times is less skin in the game for the sponsor, which naturally frees up capital for other projects.  

If deal flow and deploying investor capital are your concerns, the natural converse is in what real estate investment business models are frequent/new acquisitions not an issue? 

@Jennifer Dorsey I suggest you consult with a corporate/syndication attorney if your RE attorney is not familiar with SEC exemptions and securities. @Sam Grooms & @Todd Dexheimer are on point. Another solution to consider is simply titling the property into the 3 individual names and apportion ownership accordingly on the deed itself, but an LLC typically insulates liability (may also be treated differently for tax purposes). If this is a financed property, your bank/lender may have guidance/requirements as to the ownership structure. Also, if you intend to self manage the property, it may be prudent to put an agreement together, to that end, if your sister is not contributing to the management - and check your state real estate licensure laws not to run afoul of the unlicensed practice of real estate.

This is not legal advice and does not create an attorney client relationship.

@Jessica Wood consider consulting a local landlord-tenant/eviction attorney. There could be statutory guidelines and diverting from a strictly construed process could create liability on your part. Even removing the belongings of an abandoned unit may have legal requisites. Here in Florida, attorney's fees are statutorily recoverable in all residential tenancies and even seemingly minor noncompliance by a landlord can produce a dismissal of their eviction and a judgment for fees against them, despite a non-paying tenant residing in a rental.

This is not legal advice and does not create an attorney client relationship.

@Julie Pedraza a real estate license is an effective tool to have in your bag, congrats! Professionally, you can build a network among licensees which may provide access to pocket listings. The license also gives you some flexibility to negotiate with listing brokers because you are entitled to commissions, but keep in mind that any commissions must be disclosed to your investors if you are using private funds to syndicate an acquisition. You need to be careful to comply with the real estate advertising rules in your state and watch out for obscure license law violations. For example, here in Florida it is a license violation if a licensee purchasing property for themselves fails to make an earnest money deposit per the contract. 

This is not legal advice and does not create an attorney client relationship.