All Forum Posts by: Jillian Sidoti

@John Maher

* Do I use a co-purchase agreement or issues equity to the other families?

Maybe. Still need to provide proper documentation.

* Do I need to consider Reg D Rule 506

You could. Do you have enough investors in your current circle? Or do you need to go outside of it? You could also consider Reg CF and if you do consider that, I will be happy to introduce you to the proper platform for this type of deal.

* Do I retain a management fee or equity 'carry' for managing the transaction and reporting?

Yes! Is that what you want? It's mostly about what you want. Do you want fees? equity? both? How does that affect the overall returns to your investors? 

@Account Closed - my best advice for finding investors is to go out, have fun, and passion. One of my favorite things to do is to go to charitable dinners and auctions. They are usually a ton of fun and filled with people who have money to spend. Often times, they are filled with other professionals who want to be in real estate investing and don't know how to get into it. Be smart about it: go out to be part of something bigger than yourself and come back with some new contacts. Be casual about it. Be yourself. 

Remember, there are only two types of people: those who are in real estate and those who want to be in real estate. There are no other people. :) 

no way! That is nuts. Even though I am a securities attorney, I kind of think this is a bad idea. I have to read the article. Is it securities based cf or donation based? 

Hi, @Will F. - are you looking to do a fund? A REIT is nothing more than a tax designation: it is a c-corp that is taxed like a partnership. You can accomplish the same thing with an LLC and it is much cheaper, easier.

My recommendation (I am a securities attorney, btw) - 1. Form 2 LLCs - one to be the manager and one to be the fund. 2. Figure out your fund structure (what to offer, what terms, preferred returns, timeline, asset acquisition possibilities, management, etc.) 3. Get a PPM together - this tells the story of the investment for the investor 4. Write an operating agreement that says how the company will run. 5. Get a subscription agreement 5. File your form ds with the SEC and the states 6. Raise money. 

Let me know if you have any questions.

Hey @Ivan Correa , I would speak to @Amy Wan about your situation. She might have a less expensive solution for you then calling a securities attorney for a deal this small. 

Our rule (which is not a law, by the way, just our internal rule) is if you have more than 5 investors or are raising more than $500,000, you should have a PPM. It just takes one of those investors (or one crappy state, like PA) to ruin the deal for everyone. 

Good luck. You are always welcome to message me. 

@Joseph Bramante - I understand your desire to save on legal fees. I am the cheapest person in the world. If I could do any of the following things on my own, I would: 

1. Appendectomy.

2. Change the brake pads on my car. 

3. Build a website.

Just because I CAN (sort of) doesn't mean I SHOULD. You are missing out on the advantage of having an attorney's malpractice insurance to lean on in the event something DOES go wrong. Although the securities law protects you from accredited investors (somewhat), lawsuits for fraud, misrepresentation, and contract claims do not differentiate between the accredited and the unaccredited. 

Also, I don't want to seem like I am piling on Joseph, but I want to make a comment on the "Top 20 law firm" thing - on numerous occasions,  I have taken a "Top 20" lawyer to school on simple securities matters.  For this type of specialized work, the Top 20 thing doesn't matter as much as the experience/knowledge base. I never worked at a Top 20 firm - I never had the desire to. Heck, I never worked for another law firm other than my own. Prior to practicing law, I was a real estate syndicator for condo conversions in San Diego. Just want to give a little perspective on this before people start believing they have to spend thousands upon thousands of dollars for a Top 20 firm.

Please do not write your own PPM. You not only need the PPM, but the operating agreement, and subscription agreement. You also need to file timely Form Ds. The OA and PPM must match each other.

Truth be told, when a potential client comes to me and says "I wrote my own PPM. Would you just review it for me?" I refuse because most of the time there are so many inconsistencies, it takes me longer to fix than to write from scratch. 

Let me know if you have any questions.

Thanks, @Drew Shirley for explaining that! My favorite is working to get syndication docs done on Christmas Eve because someone MUST CLOSE prior to year end.

@Aaron Van Curen - here are some tips on getting started. 

1. Start writing articles and social media posts discussing multifamily investing. Engage in conversations. Reference outside articles to foster discussion. This will help you know who, in your network, is interested in investing with you. 

2. Find a deal to JV on. There are plenty of people here on bigger pockets.

3. Go to other places other than REI meetings - like charitable events, etc, where there are other high net-worth, non-real estate people (doctors, lawyers, etc.)

4. Figure out what you want your marketing message to be and then consistently and constantly disseminate it. 

5. Call a securities attorney. You are welcome to connect with me. 

I hope this helps!

Hi, 

Here is what I have learned about raising private money from not just my own experience, but my clients as well: 

1. You need to have a consistent marketing message. You can't change the message as you go along. Who are you as a company? What is your mission statement? This should be consistent throughout. 

2. Consistency = constant. Even if you don't have a deal at the time, you need to be constantly and consistently market your company. Then, when it comes time to MARKET a SPECIFIC OPPORTUNITY for investment, you have conditioned potential investors to know who you are. Always Be Marketing. Always be building a list of investors. 

3. Don't be desperate. It is so unattractive. And if you are following 1 and 2 above, you won't need to be desperate, because the money will be there when you need it. 

Hope this helps!