All Forum Posts by: Jillian Sidoti

It really depends. How many deals do you plan on doing per year? I would consider an LLC at first because they are easier to manage.

Stephen - how many investors are you talking? Are you crossing any state lines? Are you securing the interest with a Deed of Trust or Mortgage? These are all really important. You want to make sure you aren't violating securities laws.

I also live in Temecula and have a rental house. I have never had a problem renting it. However, there is a TON of new construction in Temecula, Murrieta, and French Valley. There is more housing than industry.

Hey Ken, I know this is kind of an old topic, but I noticed that Curt had mentioned me. Please let me know if you still need assistance. I am happy to help you out.

Hi Jon -

MODERATOR - I understand if you delete this post. I am just trying to answer the question.

I can only speak to what I charge. I charge $25k for legal services including the set up of the company, development of the plan, submission to the SEC, answering the SEC, submission to the states, and review of all marketing materials.

I would also budget about $2,500 for an audit (although not required, highly recommended)

I would budget another $10,000 for state filing fees (that's a little on the high side). No filing fees for the SEC.

So, all in all, $37,500.

When I first started doing Reg A's back in 2007, they were being reviewed by only one department and they were SOOOOOOO SLOOOOOWWWW and didn't know what they were doing because so few attorneys submitted Reg As. Now they have spread them out among all depts and so your real estate filing will be reviewed by the real estate department. It is taking about 6-9 months to get the through as opposed to 9-12 months previously.

Hope this helps!

Jillian

Travis Denny - I totally read your post wrong. Ignore everything I said :) Seriously.

Tom has some great advice. I have a guy in Brazil who does exactly what he said - found a partner in the US to buy apartment buildings. If you are interested, I am sure I have some clients of mine (some former military) that would love to chat with you and help you out. Let me know!

Denny - in my experience, to be honest, those in SE Asia LOVE publicly traded stock in the US. LOVE IT.

Other than that, you can do a Regulation S offering over there (so long as they are NOT residents of the US. If they are residents, different story.)

Thank you for your service! Let me know if you have further questions.

Bill Gulley - I think there is a misunderstanding. The American Jobs Act never passed. We are talking about the JOBS Act which is the "Jumpstart Our Business Startups" Act and really has nothing to do with employment. But, also, I disagree with the job makers - after all rehabbers employ construction crews, buy and hold employ management, landscapers, maintenance, MF investors employ all kinds, and note buyers often employ servicers!

Jillian

Often times, a company trying to raise money from investors will have a hard time raising money from their current network. It’s at this point they call me and say

“Can we advertise?”

Generally speaking, no.

Under Regulation D of the Securities Act of 1933, which governs private offerings, does not allow any type of general solicitations. It also is restrictive of the type of investors that may invest in your company, and the amount of money you may raise.
So, if you have a private placement memorandum, and no one is biting, what is a company to do to get investors without going public? I have been suggesting the Small Conditional Offering under Regulation A.

A Regulation A filing will allow you to do advertising without going through the usual rigors of a public filing. Some of the features:
1.) A company can raise up to $5,000,000 in a 12 month period.
2.) In “test the waters” states, company’s may even advertise their securities (with the appropriate disclaimer) before they have even filed with the SEC.
3.) No audit is needed.
4.) There is no restriction on the type of investor you may solicit (i.e. accredited vs. unaccredited)
5.) There are no ongoing reporting requirements.

However, as with everything in life, there are some drawbacks:
1.) They are complicated. The review process of a Regulation A filing can be just as arduous as a regular public filing.
2.) You need an attorney to file. These aren’t easy filings and it’s best to not go it alone Further, a Regulation A filing requires the opinion of an attorney even though it does not require audited financial statements.
3.) There is no telling how long it will take to get through the SEC channels. Also, you have to get it through each state in which you want to advertise. This may be easier if you are able to do “regional review” and hit many states at once.
4.) Regulation A filings are paper filings. So, anytime you receive a round of comments from the SEC, corrections must be made and sent through the mail. This is unlike any other type of filing which uses the “EDGAR” system.

Monty Corbett -First, make sure you have all the proper legal documents. If you are "pooling" you need to have PPM, proper disclosures, subscription agreement, and proper legal formation. You also need to file all of your FORM D's.

Second, I also write in my PPM's for my clients that "NO RETURNS ACCRUE" while money is in escrow and NOT in a property. This is never a problem. It IS a problem, however, if you promise returns from day 1 and then can't deliver.

Jillian