Aspiring Investor looking into setting up 1st syndication

[Atanas Petrov]

Hey Everyone,

I have several SFH properties in Los Angeles, and would like to acquire more knowledge and get some answers in order to get into my 1st syndication. I have a few friends that would participate financially, and I would be the sponsor on a small multifamily property. I would like to start setting up the syndication, but I do not know what type of an attorney or accountant I need to help me with this process, or the cost associated. Your advice would be greatly appreciated. Who do I need to talk to begin. Please don't tell me I need to network and raise the funds, I don't need to raise the money for this one, I have the investors (non accredited) I need to get the ball rolling and if you have any professional contacts that can help me achieve this, please share them. I understand that syndication 506B would be an expensive endeavor vs setting up an LLC with a few friends and purchasing the property this way, but I personally would like to build experience by setting up the syndication, with my friends as passive investors, once I go through all the steps and troubles etc and learn, I can then go bigger on the next project. Thank you for your help in advance.

[Greg Scott]

This quote makes me nervous. 

I have seen a lot of people post on this forum "You don't need to go to all that trouble. Just create an LLC." Sure, 90% of the time nothing came of that, but it is a violation of the law and could cause you BIG problems later. If you are taking money from people and they are expecting you to provide profit to them, you have created a security and should be filing under one of the SEC exemptions. Reg D 506(b) sounds appropriate given what you said. FWIW, most people that create real estate syndications use LLCs to hold the property, so the LLC is not the issue. The real key is following SEC law correctly.

There are numerous SEC attorneys out there and because they work on Federal laws, you don't need one from your local area.