Raisings private money

[Fabian Wizenfeld]

Hi, I'm looking for some help to avoid legal and taxes issues. California based.

I want to create a separate business that would be in charge of raising money to lend to my current LLC for flips. I want to keep it pretty straightforward for the investors.

We've been working with hard money lenders, but the fees add up really quick and I feel like we are leaving a lot of money on the table.

Would I do a promissory note? Does anyone have one to share?

Thanks in advance!

[Evan Polaski]

@Fabian Wizenfeld, to be clear you are trying to syndicate.  You are raising money from passive investors, about $1.5-2mm.  The use that money is to lend yourself a mortgage on your flips.  How the equity is being used is sort of irrelevant.  Once your investors are in, they have no real say in which deals they lend to.

I understand you are not "syndicating" in the way you typically see it done on these forums.  But the end use is sort of irrelevant.  The primary driver is that you are pooling capital from passive investors and offering them a return.

As noted, securities attorney and either tax attorney or CPA that understands your vehicle would be your next steps.