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All Forum Posts by: Jillian Sidoti

Jillian Sidoti has started 13 posts and replied 324 times.

Post: Securities Lawyer for raising money to fix n flip

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

HI @Rachel Fazio - it is not a "one investor rule" so you would never find it that way. I will see if I can link some C&D letters. Arkansas is just one example and is probably one of the more difficult states. They have some pretty rough rules. I could post letters for pretty much any state with the exception of Florida for the reasons below. 

Here is one example: a company raised money from an investor in Arkansas. One investor. The state found out and wanted to know why the Form D was not filed. The company attempted to file the form D with the required $500 filing fee. This was not good enough for the state. They did a full investigation and then slapped the company with a $500 penalty on top of the filing fee. All for one measly investor. 

Post: Securities Lawyer for raising money to fix n flip

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

@Jessica Zolotorofe - I have been practicing securities laws and only securities laws for 12 years. I have done offering both large and small. Our firm has done more Regulation A+ filings than any other in the country. Prior to that, I was a syndicator for condo conversions in So Cal. I know what I am talking about. I can show you cease and desist after cease and desist of people who did not 1. provide proper disclosure to as few as one investor 2. did not file a form D for one investor. Yes, the federal regulation are THE rules. That is the law of the land. However, once you start taking in money from investors, the state they are in matters for filing the Form D. There is no "friends and family" exemption - this is a massive myth. 

Although your assertion of "selling stock" is not necessary is correct, a deed of trust or mortgage is still a security - it's an asset backed security and proper disclosure must be made to investors regarding the risks etc. An LLC interest is most certainly the sale of a security. Please see the rule in the WJ Howey Case. A security is 1. the investment of money 2. in a common enterprise 3. with the expectation of profits 4. through the efforts of a promoter.

I also sent you a personal message so we could talk about this further. 

Post: Securities Lawyer for raising money to fix n flip

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

Yes. Syndicationbot.com. She's on here but I can't seem to tag her.

Post: Securities Lawyer for raising money to fix n flip

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

HI @Account Closed - it actually doesn't matter how many investors you have. If there are 2 or more investors, that's entering into securities law and the rules of disclosure must be followed. "Smaller scale" has very little to do with it. States like Arkansas have a "one investor" rule and will nail you if you don't follow the rules. 

Post: Seeking experienced syndicator to partner on apartments purchase

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

@Jeff - have you tried talking to other students in Lindahl's group? Usually they are really good at partnering. I don't want to step on Dave's toes, so I hesitate on recommending people with whom you could partner. There are a bunch of people on this board that could most certainly partner with you. I know that @Jeff Greenberg often partners with people - he is active on this board. There a couple of other people I could recommend, but I can't seem to tag them here. 

Post: Syndication Structuring Options - how to finance a deal?

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

Hi @Dan Walker -I have had a bunch of clients who have had great success with utilizing Series LLCs particularly with purchasing single families and purchasing pools of notes. The only state I would not recommend using a Series LLC is Tennessee as it doesn't seem that the series LLC mechanism that the state offers is well honed. Illinois seems to do the trick as do Nevada and Delaware.

As for financing, you can always open another LLC in that state for the purpose of purchasing a particular property. I wouldn't let that discourage you. Also, I had clients that purchased multiple mobile home parks throughout the mid-Atlantic all with separate Delaware series. All of them were financed by traditional banks. Again, it matters on the lender, so don't let that discourage you.

Google search "Delaware series Limited liability company real estate" and you will find a great article. I would post it here, but I am not sure outside links are allowed. It is not an article I wrote.

Post: Private lending from friends

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

You really should have a proper disclosure document. The moment you do this more than once you have entered the world of securities and its laws. Proper disclosure include a properly written note supported by disclaimers, risks, and the details of the deal including who you are. I hope this helps!

Post: Networking with other investors to raise capital

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

@Mike Evans - please be careful on throwing it out to the BP forums like @Michael Le said. Make sure you are not making an offer. You can raise money from up to 35 sophisticated investors and unlimited accredited investors. A sophisticated investor is someone who "not only can bear the risks associated with investing (financially), but also understands those risks." However, you must abstain from general solicitation like saying on a BP forum "I am offering 8% preferred return if you invest in my deal" or something like that. Finally, a "pre-existing relationship" is clearly defined. There is a lot of misinformation out there. For example, the three touch rule is not a real law, it's just a good idea. A "pre-existing relationship" is an "intimate awareness of one's financial ability to invest." You can accomplish this awareness with an "investor qualification form." Ask you attorney for one. They should have this as part of the PPM they are putting together for you. Best of luck!

Post: Reviewing a PPM - from investor point of view

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

@Jennifer McElliott - I would definitely recommend an SEC lawyer and perhaps a CPA. Depends on how much money you are investing. I do not review PPMs as I only represent issuers, however there are a ton of securities attorneys on here, though.

Post: How much should I compensate a my Investors?

Jillian SidotiPosted
  • Professional
  • Murrieta, CA
  • Posts 405
  • Votes 458

@Account Closed. She started a service for people raising small amounts of capital. The attorney you are consulting is incorrect. I am sorry to be that blunt. Any time you meet the following test, you are entering securities law:

1. Investment of money.

2. More than one investor (not per deal, but what you have)

3. The investor expects a return on investment.

4. You are doing all the work.

So, just keep this in mind.