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All Forum Posts by: Kim Lisa Taylor

Kim Lisa Taylor has started 74 posts and replied 213 times.

Post: 506(b) Exploration and Advice Needed

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Thanks @John Fortes

If you are just doing a one-off loan, you don't need to be overly concerned about Rule 506(b); especially if your investor is accredited. With a single investor, you may also want to consider structuring this as a joint venture (where everyone stays actively involved in generating their own profits). You will generally start thinking about structuring a securities offering when you are either repeatedly borrowing from private investors and your business depends on it; or you are selling passive interests in a company to multiple investors. I'm happy to have a further discussion with you about this offline. 

Post: What characteristics to look for in selecting a Syndication Team

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233
  1. Here is some information you may want to explore before making an investment decision:

1. What is the Sponsor’s background, education, and experience with similar investments, if any.

2. Who are the team members involved in acquisition and operation of the property, including attorneys, CPAs, other members of the Sponsor, property managers, and affiliates that may receive fees, etc.

3. How are cash distributions handled to investors during acquisition, operation, and disposition of the property including the proposed timing and anticipated percentage returns.

4. What are the proposed Sponsor fees and cash distributions?

5. What is the proposed duration of the investment?

6. What is the type and condition of the property, the purchase price, financial history, proposed ‘value add’ and exit strategies, and pro forma financial projections?

7. What are the withdrawal options for investors, if any?

8. What are their dispute resolution policies?

9. What are the voting rights of investors?

10. Do they have provisions for removal of the Sponsor if they are not performing? 

Post: Webinar: “How to Resell Interests in a Securities Offering"

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

We hope you’ll join us at 9 a.m. Pacific/12 p.m. Eastern time on Thursday, Sept. 24, 2020, for Syndication Attorneys, PLLC’s next free educational webinar. Host Kim Lisa Taylor will welcome guests Simen Ruge and Jackson Stith in a discussion of “How to Resell Interests in a Securities Offering.”

Ruge and Stith are co-founders of SyndiGate Capital, LLC, which focuses exclusively on brokering secondary equity positions in middle-market commercial real estate investments.

They will discuss various scenarios in which an investor might want to exit a syndicate or change its terms and will lay out the options available so you make the right call with your investment.

Details on registering for the webinar can be found at https://zoom.us/webinar/regist... or in our September newsletter, along with other valuable insights for syndicators and investors, which you can access at https://bit.ly/3kpSoVf.

Post: Multi-member LLC signing authority

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233
Originally posted by @Felix Stone:

@Kim Lisa Taylor Bumping this. Would the manager (or the managing member) be selling securities in this case to the other passive members?

Yes, Felix. I see many people try to avoid securities laws by saying they are doing "joint ventures", when in reality they are selling securities. Selling interests in a Manager-managed LLC with members contributing capital and a few key people managing the company would constitute the sale of "Investment Contracts", which are securities.

The only way to avoid that is with a Member-Managed LLC or general partnership structure in which "all members are responsible for actively generating their own profit", and all are responsible for management of the company, which could include opening and closing bank accounts, contractually binding the company, etc. While a member-managed LLC might be feasible with 3-4 members that know each other very well and have identical objectives; when larger groups are involved, it rarely happens. What actually happens is that a few members actively manage the deal while the rest are not actively involved in management. In that case, it doesn't matter if the company is member-managed, because certain members will attest that they didn't participate in management and therefore will likely be deemed passive investors. If the deal is ever scrutinized by a securities regulator (or one of the investors' attorneys), it will likely be deemed to have been the sale of securities without following an exemption (which requires proper disclosures and SEC/state securities notice filings).

In my experience any more than 5 people in a member managed LLC is a recipe for disaster as they can't agree on how things will be done (too many cooks spoil the supper...), so it creates dissension, stress, and in the worst cases, litigation.

Post: Webinar: Distribution Waterfalls & How Cash Flows in a Syndicate

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Please join us on Thursday, Aug. 27, 2020, 12:00 p.m. Eastern/9:00 a.m. Pacific time for Syndication Attorneys, PLLC's next monthly webinar, as host and founding attorney Kim Lisa Taylor, Esq., educates participants about how cash flows in a syndicate, including an explanation of trends in distribution waterfalls.

In advance of the call, we invite you to read "How Does Cash Flow in a Syndicate?", which can be found on our website under the "FAQs" dropdown from the "Library" tab on the navigation bar, and, from the "Articles" dropdown, "Class B Catchup Distributions Explained."

You can register for the event from your computer, tablet or smartphone at the following link:

https://zoom.us/webinar/register/WN_iqpDQJ8vTUiBLeEFZ0GnXQ

After registering, you will receive a confirmation email containing information about joining the webinar. Our free monthly webinars typically run for an hour, with 30-40 minutes of discussion followed by live Q&A.

Post: How to Streamline Management of Your Investors

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Syndication Attorneys, PLLC's next free teleseminar, at noon Eastern/9 a.m. Pacific time on Thursday, July 23, 2020, focuses on an investor management platform that can provide syndicators an all-in-one solution to help you increase investors' satisfaction, automate your back-office, and grow your business.

You can read the July 2020 issue of our monthly newsletter and also find a link to register for the teleseminar, “How to Streamline Management of Your Investors” here:

https://bit.ly/32AV5gK

Post: "Carried Interest & Other Tax Matters Related to Syndication'

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Our June 2020 newsletter is just out, with details on how to register for Syndication Attorneys, PLLC’s next free educational teleseminar, as well as other valuable and entertaining content for real estate investors and syndicators.

This month’s teleseminar – on Thursday, June 25, 2020 – features special guest Thomas Castelli of The Real Estate CPA, who will educate us about the tax ramifications of carried interest in real estate syndications and other implications of the Tax Cuts and Jobs Act of 2017.

Thomas is an Advisory Manager for The Real Estate CPA. His team provides clients with top-notch tax and accounting advice and helps them build strategies, technology, and best practices. And guess what? His team invests in real estate, too, collectively owning 90+ properties and 300+ units.

You can register for "Carried Interest & Other Tax Matters Related to Syndication" at 12:00 p.m. Eastern/9:00 a.m. Pacific time on Thursday, June 25, 2020, from your computer, tablet or smartphone at the following link:

https://zoom.us/webinar/register/WN_QvrAf3S6Qg61ipo5UXjUTg

After registering, you will receive a confirmation email containing information about joining the webinar, hosted each month by Securities Attorney Kim Lisa Taylor.

Our free monthly broadcasts typically run for 30-40 minutes with live Q&A afterward.

Get a copy of our June 2020 newsletter at the following link:

https://bit.ly/2V11UDW

Post: "Multifamily Outlook Beyond COVID-19" with David Lindahl

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Join Attorney Kim Lisa Taylor and special guest David Lindahl of REMentor for Syndication Attorneys, PLLC's next free educational teleseminar as we prognosticate about the multifamily investing world beyond COVID-19.

What's happening now; what's in the immediate future; and what's on the long-term horizon? Will there be price dips? Will lenders loosen up? Will investors flee the Wall Street roller coaster in favor or real estate? Let's hear it from the expert.

You can register for “Multifamily Outlook Beyond COVID-19" with David Lindahl at 12:00 p.m. Eastern/9:00 a.m. Pacific time on Thursday, May 21, 2020, from your computer, tablet or smartphone at the following link:

https://attendee.gotowebinar.com/register/3309111492607787531

After registering, you will receive a confirmation email containing information about joining the webinar.

Our free monthly broadcasts typically run for 30-40 minutes with live Q&A afterward.

You can always find details of our upcoming teleseminars in our monthly newsletter, along with other valuable and entertaining content for real estate investors and syndicators.

For a copy of our May 2020 newsletter, go to https://bit.ly/2zgFwif.

Post: Embezzlement Due to Financial Stress During Coronavirus

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

@Charles Seaman, in response to your query, here are some red flags to watch out for: 

1. Watch for unauthorized transfers or large expenditures, frequent ATM withdrawals, personal credit cards paid with partner funds, advances on future pay, or reselling interests in the company.

2. Watch for partners with access to investor funds living above their means – buying fancy toys, taking extravagant vacations, holding lavish parties, etc.

3. Watch for people who are raising money collecting it in their own personal accounts to be "turned over".

Believe it or not, I've seen all of these things happen in partnerships or syndications.

To prevent it, let everyone with access to funds know you are watching the bank accounts regularly. Knowing someone else is watching is the best prevention.

Post: Embezzlement Due to Financial Stress During Coronavirus

Kim Lisa Taylor
Posted
  • Attorney
  • Saint Augustine, FL
  • Posts 231
  • Votes 233

Don’t let your syndicate become a victim of embezzlement due to economic hardship during the coronavirus pandemic.

You need pay careful attention to money in your syndicate and the people with access to it. When people experience financial stress, embezzlement increases. It always starts with access and an unsharable need. The person usually plans to borrow the funds, believing they can pay it back. When they can’t, they try to justify why they deserved it. By then, the funds are spent and irretrievable.

Partnership embezzlement and investor fraud happens. Don’t let it happen to you or your investors.