Hard Money Brokering

[Ryan Pearson]

I am looking at brokering some hard money for some private investors here in Colorado. Am I going to need to be licensed with the state or SEC? If so, what lincense(s) do I need?

[Don Konipol]

If you are brokering hard money loans on commercial real estate, the SAFE act does not apply. Some states, such as Arizona may require a Commercial Mortgage Broker license, while other states such as Texas will require no license at all.

Even if what you broker is a security (not neccessarily that it is), you may be exempt from SEC regulations if your transaction occurs in only one state (intrastate). At that point you may be subject to state securities laws, however most states have exemption from registration for transactions involving fewer than 35 partners.

So there are two sides to consider; laws and regulations that are for the protection of the borrower, and seperately securities laws that are for the protection of the investor/lender.

As a broker you will be subject to both, but might be exempt depending on the type of transaction and how it's structured.