Structuring an investment group

[Terrance Hall]

Hello BP community,
I am trying to set up a (3-4) small investor group in order to pool their funds and tackle larger fix and flips. I'm wondering if just setting up a simple LLC with all of them would be sufficient to start out. Or would I need something like an S-corp?
Thanks in advance.

[Taylor L.]

Pooling passive investor funds isn't as easy as just forming an LLC and selling membership units of it. When we offer a return to passive investors, we are selling a security and must abide by securities laws. Many of us are syndicating larger deals right now under Reg D Rule 506(b) or 506(c) exemptions, which allow us to sell securities to passive investors if we meet the requirements.

If you are finding deals here, there are many money lenders in Richmond that would be happy to get involved with a good flip project.