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All Forum Posts by: Mauricio Rauld

Mauricio Rauld has started 3 posts and replied 49 times.

Post: Syndication or General Partnering?

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Adanna Davis Either way its a security.  My experience is that it is much harder to raise money in a blind fund since investors are betting on your versus the property.  They cant do their own underwriting on the property.  So tough to do if this is your first syndication.  Investors would  be looking for experience.  Thanks @Alina Trigub for the shout out.

Post: Making sure I don't run afoul of SEC?

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

Dont think I can post here, but I have a bunch of videos on my YouTube channel that address structure (I think Top 3 Biggest mistakes).  PM me and happy to share directly.

Post: 506(b) Foreign Investor

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Jay Chang I have a video on this on my YouTube channel you are welcome to check out (not sure I am allowed to post here).  But Dan and Charles hit on the major obstacles.  Re Canadians, specifically, you will need an LP or an LLLP.  And not only are you required to withhold like Dan said, you are responsible for paying their 30% if you dont withhold and they dont file.  Whitney Sewell and I did a whole podcast on this issue on The Real Estate Syndication Show.

Post: List of Real Estate Syndicates in US

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Taylor L. @Bon Osonwanne Looks like Bon is talking about and asking about the creation of a software platform he is creating.  So long as not soliciting investors for that, looks to be ok.  Bigger question is whether strategy above to have pw protected site for non-accredited.  Just make sure you are complying with Citizen VC. I did a video on that in YT channel about how to take a complete stranger and establish a substantive relationship.  Over 1K views if you are interested.  Hope this helps.

Post: SEC securities Property Liens

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Douglas Vogel if you are sticking to ONE investor and secured (better if 1st position), there is an argument to be made that you are OK under the family exemptions below.  the minute you have more than one investor, (ie: you fractionalize it) you will be considered offering securities.

Under Reeves, The following is a list of notes that have judicially been determined to fall outside the definition of a “security”:

(i) a note delivered in consumer financing;

(ii) a note secured by a mortgage on a home;

(iii) a short-term note secured by a lien on a small business or some of its assets;

(iv) a note evidencing a character loan to a bank customer;

(v) a short-term note secured by an assignment of accounts receivable;

(vi) a note which simply formalizes an open-account debt incurred in the ordinary course of business (particularly if, as in the case of the customer of a broker, it is collateralized); and

(vii) a note evidencing loans by commercial banks for current operations.

Post: Syndication questions, where to start.

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

Thanks @Alina Trigub  Feel free to reach out to @Amy Wan or me and we are happy to help.  If you search my name on Youtube you will also find my channel with some educational videos.  Happy to hop on a call @Tyler Bobo

Post: Managing Private Money

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Ned Carey, the amount of investors you have does not matter.  You can have 1 investor and if they are passive and just giving you money, you are issuing a security.  There are certain exeptions to it being a security (but these only apply if you have 1 lender).  For example, a note that is less than 9 months is not a security.  And it is generally accepted that a loan secured with a 1st mortgage is also exempt from a security (there are other exemptions as well that dont apply here), but I listed below FYI.  But the minute you have more than 1 investor in those 2 scenarios, you now have fractionalized it and it becomes an investment contract and you are back within the definition of a security which is quite broad under the SEC definition.

Judicial Exceptions include:

  1. A note delivered in consumer financing; or
  2. A note secured by a mortgage on a home; or
  3. Any short-term note secured via a lien or assets of a small business; or
  4. Any note evidencing a “character” loan to a bank customer; or
  5. Short-term notes secured via assignments to accounts receivable; or
  6. Any note which formalizes an open account debt incurred in the ordinary course of business, especially when collateral is involved.

@Uneeq Khan You raise money from other people by recognizing that you are issuing the a security and simply comply with federal and state securities laws.  Thats what syndicators do.  They raise money from other passive investors and comply with the SEC rules.

Post: Managing Private Money

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Ned Carey its the fractionalization of the note that gets you into trouble and also the fact that is is not secured.  A private money lender is a) one party, so not fractionalized, and b) secured in 1st position (exempted).  @Uneeq Khan any time you take money from investors where the returns are generated by YOUR efforts (passive investors v active) you are issuing securities.

Post: Finders Fee For Raising Capital

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

@Taylor L. thanks for the shout out.  Finder's fees are dangerous since you need to be paid for the introduction itself (whether they invest or not) and you can't have any involvement in that process and certainly can't be endorsing or making comments about the deal.  I personally would stay far away from a Finder since it is very hard NOT to cross over that very thin line of becoming a broker.

Post: Want to start a private fund with close acquaintances

Mauricio RauldPosted
  • Syndication Attorney in Newport Beach, CA
  • Posts 55
  • Votes 83

Any time you are taking money from investors where the returns are generated primarily by YOUR efforts, its a Security.  Google Reg D Offerings.  PM me if you need additional info or you can head to YouTube channel that has a ton of content.  Hope this helps.