Starting Private Fund where I lend to small builders-HELP

[Mark Oviatt]

Hi BP, I'm looking to start a private equity fund where I intend to take accredited investors money and lend bridge/construction loan to small/mid sized single family builders. 

1.As I stated before, i will only use accredited money only, so a PPM is not law, but I plan on using one as an insurance policy. The PPM will outline fund operations mostly and define basics. Project/loan maturity periods will only be 12 months. Since I'm looking at many projects at a time, defining "one" project, or even five at a time would be too costly to produce project specific PPM's. This would also be a close-ended fund. The question is: Do I declare this a 506B?C? and just produce one master ppm which just really defines everything about the fund except the project? Or do I define just my lending strategy in this master ppm?

2.Is it cheaper to go external with accounting? I know it plays better with investor transparency. How much does this cost? Any recommendations on a reputable firm that specializes in fund accounting?

Thanks for any help. 

2.

[Greg Dickerson]

@Mark Oviatt are you proposing to lend on the debt or equity? 

If you are lending debt to take down the lot and or provide construction funding then you simply record a note and deed of trust depending on your state. Your fund is simply a lender. 

The LLC, PPM and subscriptions documents would be for the fund not the builders. The builder is a borrower not a member.

Yes you should always use a third party fund administrator and accounting firm to audit and preform all the accounting and back office duties. This is payed for as part of the management fee charged to the investors.