Private lending rules.

[Reed Starkey]

I spoke with an attorney today (not an SEC attorney) and I want to see who can comment as to the truth of what was said.

She told me in the state of Michigan, I am allowed to raise up to $1,000,000 from residence of MI and only MI.  I can advertise to them, and do not need to know them.  If it goes over $1mm, or has one out of state investor it becomes federal, and different laws apply.  I would still fall under the same rules as I cannot promise certain returns etc. 

I try to read every post I can on private lending, and have never seen this mentioned.  Is it really this easy?  I don't mean to second guess an attorney, but I also don't want to go to jail either.