All Forum Posts by: Matt Peebles

These same "experts" have been calling for an inevitable crash since 2010. When is it going to happen? It's always "next year" 

I am always buying long term buy/holds. There will never be a perfect time. Every time is the right time IF you buy smart.

Right now i'm in a very hot market and I buy ONLY good deals. I have passed on so many deals where I have been outbid. The investors that outbid me should be the ones concerned about what the market does.

When I buy I plan on holding for 20,30,40,50 years. IE: LONG term. In this timeframe the market will change many times over. As long as you buy right and manage well, all market conditions are manageable. 

 Matt,

How many people and or how much money are you talking about soliciting? Do you plan on soliciting in multiple states? Are you planning on running this company continuously, or just forming it for the purposes of acquiring a specific asset? You could potentially form a company and offer shares under a regulation D 505 offering, but it would need to be under $5M in any 12 months, and you need to have 35 or fewer non-accredited investors who need to receive disclosures generally similar to those of a registered offering. Luckily you don't even need to provide disclosures to accredited investors, although if you do give them information, non-accredited investors need to receive that same information. You would also need to have your books audited by an independent public accountant, and file a form D with the SEC electronically. 504 Reg D would be semi easier, but also a lower fundraising ceiling.

Basically, in the SECs view, if you are a business entity (LLC, LP, C Corp, S Corp, etc) and you want to raise money by selling securities, even if it is only to 1 person, then you need to either register or operate under one of the registration exemptions.

Good news is that would be worst case in terms of set up, and you would only need to do that if you were talking about more than a few investors, or if you wanted to grow the company by soliciting additional investments after the company was formed. If you only have a handful of people that you want to partner with on a single investment, just set up an LLC with yourself as the managing member and break down ownership based on capital contributions. If you intend to start a company that will grow, and eventually want to offer shares to additional investors, then you will eventually need to follow the scenario above.

Hope that helps

Adam

 Hey Matt,

Yes a REIT would be regulated by the SEC, and you would have to be FINRA compliant if you wanted to have the REIT be held by investors at a FINRA member firm. That being said, I think there are some pretty major roadblocks to you establishing a REIT. I could be way off base here, and if I am I apologize, but even starting an unlisted (or non-traded/non-public) REIT requires quite a bit of capital, management, and marketing.

Some things that might be roadblocks above registering with FINRA and the SEC

First - You will need to find someone who is FINRA series 7 and 66 (potentially 6, 63, and 65) licensed to be able to sell the REIT. You will also need someone who is FINRA series 24 licensed as a principal to oversee said salesperson.

Second - You will need to have a minimum of 100 shareholders, additionally no more than 50% of shares can be held by 5 or fewer people. Essentially that means that you will need to find 95 people to collectively own 50% of your REIT.

Third - You must be a taxable Corporation entity, and you must be managed by a board of directors or trustees. And you must distribute 90% of your taxable income to shareholders on an annual basis. Meaning you have a 10% of taxable income cushion to pay for the administration of the REIT.

Syndication would be similar, albeit a bit easier, and potentially less regulator registration, but not much. You could potentially be exempt under blue sky laws, and it would solve the problems of needing a lot of investors but it's been too long since I took the FINRA exams to remember that much.

Best thing to do is speak with a securities attorney - as always consult the experts.

Adam