All Forum Posts by: Robert Borr

@Ryan McGlasson we are talking about 2 distinct roles that are both referred to as "sponsor" - a loan sponsor, and a syndication sponsor. If you were to sign on a loan with the loan sponsor then you are a co-signer on that loan, but if you cannot sponsor the loan yourself, I don't see the necessity or requirement to be co-signer on the loan. 

A syndicator promoting and structuring a deal may be referred to as the sponsor, the issuer or the promoter, however, I have not seen "co-" used in that context. If there is a team, they are all sponsors/issuers/promoters. 

@Ryan McGlasson don't get mislead by similar terminology meaning different things. You would raise money via syndication in order to provide the up front funds required by the bank and for capital improvements if that is part of your deal. If you do not have the net worth and experience to qualify for the loan, the bank will want someone with those qualification to sign on the loan (a sponsor). As a syndicator, you may also be referred to as a sponsor of the deal (maybe also promoter or issuer).

The common structure I am familiar with lumps everyone (investors, sponsors, issuers) together with different classes of ownership, typically an investor class and an operator class. You and your team - including your loan sponsor - would be in the operator class.

But make no mistake, you will need capital to accomplish this. In addition to due diligence and down payment, you will have to pay legal fees to properly form the corporate structure in compliance with securities regulations.

@Snehann Kapnadak talk to your attorney before you start raising funds and soliciting the deal. Know the rules for the exemption you intend to use for your syndication - without a game plan, you may inadvertently disqualify certain investors from the offering. 

@Brandon Swartwood if you are setting up the deal you do not have to meet the accredited investor status to put your own funds into the deal by virtue of being an issuer. If you are looking for a deal to invest in and you are not accredited, you will not find anything out there as solicitation is prohibited by the exemptions that allow for non-accredited investors.

@Jeff Jerma consider doing research on possible exemptions before you make any moves due to a potential prohibition on solicitation. Depending on the investor's net worth, they may be required to meet the requirements of a sophisticated investor as defined by law in order to participate in your offering.

Collecting a real estate commission on purchase is basically the same as collecting an acquisition fee, but it is important to draft the proper disclosures in the offering documents based upon the structure of the transaction. Keep in mind that there may be additional regulations to comply with for having a real estate license even when not acting as an agent.

I would highlight what Brian Burke mentioned - make sure your documents are written in order to allow you to accept less than the minimum investment amount. I typically see 10k, 25k, and 50k as minimums for newer syndicators, but it should be reflective to your total raise and probably the exemption/structure you intend to utilize.

Principal vs. CEO/President does not really matter, but you should get legal advice to properly draft an operating agreement that you anticipate will sell securities to raise capital. You may also want to know which exemption you plan to use prior to starting operations.