All Forum Posts by: Amy Wan

As @Brian Burke points out above, make sure you read the Operating Agreement. It should discuss many fine points re: capital calls, including what happens if an investor doesnt pony up.

You can, but 506b and 506c are the easier ways to do it. Those are two exemptions for private placements, which means its a private offering to investors. 95%+ of private capital in the U.S. is raised through Rule 506b alone.

Other ways include going public (likely not what you want to do), using in intrastate offering exemption (meaning you can only have investors from that one state), Reg CF (which currently still limits you to $1M a year and needs to be done through a licensed portal, though the dollar amount is set to increase to $5M in the future), and Reg A+, which is a mini-IPO and likely too complicated for what you're trying to do.

It may be possible to get ONE check from ONE investor and have it not be a security, but that depends on what jurisdiction you're in and you'd still want a lot of the same things/terms spelled out and done as you would in a securities offering to CYA--especially these days.

This is technically possible, but totally depends on how your legal documents were written. You should check the distributions section of your PPM to determine what would happen in a refinance scenario.

You can either 1) go through a syndication coaching program or, 2) I'm happy to ask some of my clients whether they'd be interested in doing a deal with you so that you can gain experience.

New construction financing is difficult. If you can get a HUD loan, by all means, go for it if its just a matter of time. Investors in a new construction project are going to want to see a demonstrated track record of success in new construction/development. The structure part isn't difficult--there isn't much that's "standard" since its not a huge market that's of sufficient quality and open to non-institutional investor, but the returns are going to need to be higher than value-add multifamily promises since this carries more risk. One of my clients started off doing a new construction syndication project at 16% preferred return just to get going--and it's leveled off from there. The main question though is "what do your potential investors want?" If you don't know, ask them.

I feel like there are a lot of mixed up concepts here. You're trying to avoid "SEC solicitation rules"--which is easy--just don't generally solicit anyone you don't already have a pre-existing relationship with. I think the question you're really trying to ask is "how can i raise capital without having SEC rules apply" which is an entirely different analysis, and frankly, difficult based on what you're describing. SEC rules encompass many different topics. Happy to have a short chat if you need.

This sounds more like a buy-and-hold opportunity rather than a value-add opportunity. Remember to always build in cushion room since assets overall are more expensive right now.

The way you would structure this is as a small blind pool debt fund. Basically, you raise money from investors at either an interest rate or preferred return. They are secured by fund's title on the property, but they hold debt on the fund instead of equity. You can recycle the money many times in a year since flips are short. I've done this for multiple private lenders/crowdfunding fix and flip lenders and note buyers. 

At the end of the day, it all comes down to "what's your business model and how do you want to do business"---and then we securities attorneys build a fund structure around that. It can be property-by-property, or over many properties--it just depends on your preference.

Hmm...while a loan can be considered a security, most loans are not (except in specific instances i.e. multiple lenders in the same position with same terms on one note). Just wanted to make that clear...

You definitely want to speak to a securities attorney about this. Unless all your investors are going to be active partners with you in the deal (as opposed to passive investors), this will be a security.