How do I sell a promissory note without risking trouble with the SEC

[Abdenour Achab]

I own a note in Redding California. I located, through public records, some people who either bought notes in the past or lent money secured by real estate in the Shasta county (not the owner finance people - only people who have lent on a property they didn't sell). Shasta is the county where Redding is.

I am interested in selling the note, but NOT to any professional note buyer or real estate investor (I am willing to offer only a 7% return, so it would make sense to only the kind of people who invest in CDs and bonds - that means either retired people or people too busy to find deals). I am worried though about getting into trouble with the SEC, and, if there is such a thing, its California state equivalent.

Is there a way to market to the above referenced people without exceeding my standard quota of three felonies a day ?

I was listening a few years ago to video tapes from John Behle. They were recorded over 20 years ago. He mentioned in one of them that he once ran an ad to sell a note, and he got a call from the SEC asking him for his registration number. By the way, he also said that he is not a fan of selling notes (he hypothecates them instead to raise cash). One of the reason was, he would lose control of the note and would still be liable if the buyer screws up and loses money. Are his concerns still valid 20+ years later (i.e. now) ?

More recently, Alan Cowgill (I think - I listened to so many gurus that I can't remember for sure who said what) said that he arranges to meet with potential investors three times (through seminars/luncheons in which he does NOT ask for money) before raising money from them. In his case he doesn't sell existing notes. He raises money to invest in real estate. But I believe his tactic is still to get around SEC's regulations.

Is this three times meetings first an SEC regulation ? Obviously, the people I located through public records, I never met. And will probably never meet. So are they off the table ? For various reasons, I am not willing to organize any seminar/luncheon, let alone three, in Redding.

Note to the moderator: I believe nobody in this forum would buy a note for a 7% return. So this is not in any way a classified. I also hereby commit not to sell this note to anybody who contacts me from this forum.