The answer to your question will address the SEC issues - you need to have a substantial preexisting relationship with the person.

You actually want / should to do this with vague information (i.e. no live deal) so that when the time comes for a live deal you've built the required pre-existing relationship.

Keep in mind, as @Brian Burke stated, your LLC  members would still have to follow the syndication rules which entails for 506c - all accredited or for 506b - you must have pre-existing substantive relationship with all of them!

This as well as my preexisting desire to get into real estate has motivated me to reach out and ask for help.

I invite you to shift your mind set from recourse loans ( the ones you’re referring to) and start considering non-recourse options, which will take you the syndication route.When I started thinking about syndication, it took me a while to let go of my preexisting beliefs of having to control every single step of the process, including fully controlling the property.

The company can deny any claim you make based on the assertion that it was a pre-existing problem.

My mentors taught me to invest in my own backyard because it’s easier to manage projects and know ones own market if they live in it as well as use pre existing relationships.

Wouldn’t I have to have a pre existing relationship with any new investor?

Typically either the seller or buyer will know how much you will make in many situations with regards to wholesaling the home inside of a pre-existing community.

If your note came due after 2007, you were in trouble unless you had a low LTV and strong pre-existing banking relationships.