Pooling Funds for Real Estate Investing or Private Money Lending – What to Watch Out For

[Corey Dutton]

I’ve seen this discussion on the forum before but would like to solicit fresh feedback on this topic. Has anyone had any legal problems they would like to share in this area? Or have you experienced pitfalls that you would tell us to look out for?

It seems it’s all about how you structure the entities and how you move money around. Obviously having the right attorney, that would assist in achieving the desired goals when “pooling” funds, is the only way to go. By structuring the right business entity and not being within any kind of SEC violation with regard to moving and holding the funds, you should be ok. But the Dodd Frank and SAFE Act have put some of this into a gray area. Depending on the State, the Divisions of RE and Mort Lending may now regulate otherwise unregulated areas such as this.

Would anyone here like to tell us what to watch out for? Any experiences or those of
your clients that you would like to share with regard to pooling funds for real estate investing or private money lending? Thanks for your comments.