Private Money 101 With Securities Expert Gene Trowbridge
I was very excited to get a chance to interview Gene Trowbridge for my blog this week. Gene is an instructor for CCIM, worked as a commercial broker, and successful syndicator. Gene is now focused on using that background to advise other real estate syndicators via the private placement system.
Listen to Private Money 101 today to get answers about:
- What group investments count as a security and what to do to avoid that
- Why notes are tricky: step carefully in this arena
- How to legally market for private money from people you don’t know
- How large the pool is of potential investors (5 TRILLION plus!!!)
- The difference between an accredited investor and sophisticated investors
- What are the steps to get started!
Watch the Video Below
https://www.youtube.com/embed/b49qnAWnUHQ?feature=oembed
Key Definitions
Syndication : A professional financial services group formed temporarily for the purpose of handling a large transaction. Syndication allows companies to pool their resources and share risks. (See Investopedia)
A Security : The Howey test established that a security is
- investment of money due to
- an expectation of profits arising from
- a common enterprise
- which depends solely on the efforts of a promoter or third party
Intrastate Offering Exemption: If the property, the sponsor, and the investors all reside in the same state a sponsor can claim an an exemption to Federal Registration even if the government is not shutdown.
Private Placement: A process that permits a sponsor to opt out of the expensive ($250k) process that companies that offer IPO’s must under take.
Rule 506: The private placement exemption that permits a sponsor to raise an unlimited amount of money from accredited investors and up to 35 sophisticated investors
Accredited Investor: Refers generally to a person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person or a person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
Sophisticated Investor: A type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity.
Next Week
Tune in next week for Private Money 201: the JOBS act and You were will will discuss:
- How marketing has changed or won’t under Rule 506
- What is crowd-funding?
- Will crowd-funding really help real estate investors?
- How to turbo charge your syndication business with broker-dealers
Resources:
Related Posts:
“Its a Whole New Business” by Gene Trowbridge