How do I get Legal forms without hiring a lawyer for Syndication?

Question

I want to learn how to do syndication. But before I start reaching out I want to be sure I can accept money for investing while covering myself legally. Does anyone have suggestions on where I can find a list and templates of all the legal documents I would need to start doing syndication?

Stanley Bronstein · Answer

@Steven Gilbert I'm not trying to be funny here, but I would say look for the forms at your local insane asylum, because in my opinion, someone would have to be insane to do a syndication without having an attorney on board.

I know as an investor, the first thing I would want to know is, who is your attorney?

With all that said and done, I agree that there is nothing wrong with trying to learn as much as you can.

Alina Trigub · Answer

@Steven Gilbert

Welcome to BP Community!

I agree with @Chase Louderback that you should educate yourself first on the overall process of syndication prior to taking any steps. This entails (1) reading books, such as "Best ever syndication book"  by Joe Fearless and @Theo Hicks; (2) listening to podcasts, such as Syndication Show by @Whitney Sewell; (3) networking with the people in the business already virtually and in person via REI events.

Also, this article will give an introductory view into what documentation is required from an investor's perspective: https://www.biggerpockets.com/member-blogs/10850/7...

My best!

Charles Kao · Answer

@Steven Gilbert For one you need to talk to a lawyer and two I would be careful

posting things like this on biggerpockets.  One of ways I do due diligence on investors seeking money is on bigger pockets and for example if I saw this question while vetting you 10 months ago I most certainly would not feel you were qualified to do a syndication. Essentially you are advertising you are a newbie and that sticks with you.  Perception is very powerful and this sounds like you are being cheap on security guidelines and your education.

Nate Marshall · Answer

506(C) template for syndication

Investor Portal

Vetting accredited investors.

Marketing and Promotion

EDGAR registration

You can DIY but many moving parts.

Chase Louderback · Answer

Hi Steven,

I would suggest getting educated on the syndication process first to make sure you are properly going about the capital raising process as well as to understand everything that goes into taking down a multifamily deal via syndication.

As for the forms, there are some educational programs that provide them as well as how to use them, however you should still have a qualified attorney look over all of the documents before you start using them.

Account Closed · Answer

@Steven Gilbert are you looking to raise money from people you have an existing relationship with?  You need to be really careful raising money, as it is easy to unintentionally violate SEC rules, and they do not play around.  Turns out, "I didn't know" doesn't work as a defense.

Your ambition is great, and wish you the best.  For what its worth, some things are worth doing yourself, some things are worth paying a professional.  I highly recommend consulting an attorney who can advise on following SEC guidelines.

Please post an update to the thread to let us know how you are doing.  I have raised money for a few deals and they turned out well for everyone involved.

Steven Gilbert · Answer

Hi all, Thank you for your replies. It has been helpful to me to read your carefully worded responses. I think a lot of you misunderstood my intentions and I apologize for posting a vague question while I was in a hurry for answers. I would never use other people's money without hiring a lawyer. I just wanted to read the documents without having to hire a lawyer, I thought some people on BiggerPockets might know some examples or templates.

I am educating myself by reading through the legal documents, I want to understand them completely before I even dream of doing anything remotely similar to syndication. And I am not trying to hide I am new to Real Estate, but I am planning my 20-year strategy now. I own 1 investment property so far and plan to own many more before I get into syndication. A special thanks to @Nate Marshall for providing the list of documents, it has been educating reading through these.

Ben Nelson · Answer

Hi Steven,

I echo what Chase said...get educated and use what you can find for information, but it’s just that...information only. You NEED to have an attorney involved when you’re working in syndication. If you’re trying to save fees, DON’T even think about going down the syndication road. Attorney fees are a cost of business, and hiring the right professional to make sure you’re covering everything you need to is worth every penny. If you don’t, and you try to shortcut, you’re going to miss something and this is not a business you want a misstep like that. Penalties for non-compliance can be extremely severe.

Now, don’t let that scare you away from syndication. Syndication is a beautiful thing and can produce amazing results for all parties. Just make sure you’re doing it right, for your own protection as well as your investors.

Nate Marshall · Answer

Here are some additional items you WILL need:

Executive Summary

Private Placement Memorandum

Subscription Agreement

Business plan and Operating Agreement for the LLC or Corporation

FORM D for the SEC

If you go for a 506(C) you can advertise but have to vet accredited investors. This needs to be done by a 3rd party.

Lee Nestlerode · Answer

@Steven Gilbert

Perhaps consider participating as a limited partner first.

How do I get Legal forms without hiring a lawyer for Syndication?

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