Questions on raising capital with 506b

[Serena Kim]

Hi - I’ve been speaking with a few partners to raise capital to buy properties in FL, and had a few questions was hoping someone could help. 

• Is there a lawyer you would recommend?
• What’s the approximate cost for it? I’ve seen anywhere between 10k and 50k
• Is creating the PPM and Partnership Agreement the first step in the process before speaking with potential investors?
• Anything else you would recommend/suggest based on your experience?

Thank you!

Serena

[Charles Carillo]

@Serena Kim

I would start speaking to investors prior to putting in any offers. Figure out timeframes and amounts people are interested in investing. When you are actually raising money for a specific deal you have under contract, raise twice as much through soft commitments (commitments where they have not wired funds yet / non-legally binding commitments) because you will find many people back out when it comes to actually wiring the funds (at least on your first deal).

You should start speaking to and interviewing syndication attorneys (feel free to DM ME for a list of syndication attorneys). The costs are within the range you outlined above and depend how complicated the deal is. Once you have a deal under contract and a team member has visited the property, is usually when you will reach out to them to start the syndication process.