LLC - Equity Deal Structure

[Account Closed]

I'm going to form an LLC soon in Georgia and I want to focus on offering equity to investors in lieu of (OK...occasionally in conjunction with) private lenders. I want to structure the deals so that the investor receives a percentage of the free cash flows generated by each property monthly based on their investment. They will also receive the same percentage of the sale price when the property sells. Do I need to set up my LLC in a different way to account for the liability of the investor & myself? Any advice is much appreciated!

[Jonathan Twombly]

Originally posted by @Account Closed:

I'm going to form an LLC soon in Georgia and I want to focus on offering equity to investors in lieu of (OK...occasionally in conjunction with) private lenders. I want to structure the deals so that the investor receives a percentage of the free cash flows generated by each property monthly based on their investment. They will also receive the same percentage of the sale price when the property sells. Do I need to set up my LLC in a different way to account for the liability of the investor & myself? Any advice is much appreciated!

 Michael, you are talking about a syndication deal here, and in doing so, you are offering securities to your investors.  While this is a very standard way of doing things, you have to be very careful about doing the deal correctly.  Please consult with an experienced securities lawyer who has handled real estate syndications before.  It's not complicated, and an experienced lawyer will be able to handle it for you, but if it is not done correctly, you can be in a lot of trouble with the Securities and Exchange Commission.  Please tread wisely here.