The cost of hiring a securities specialist attorney and filing the Reg D with the SEC as well as various state securities agencies starts at $10,000 and goes up from there.

And, not going into the arguments of the past with some on BP, I'm totally in the position of the IRS and SEC as to investing compared to operating.And, there is nothing wrong with being a real estate operator, it carries pretty much the same influence as investor in my opinion. in fact, operators implies a keener sense of operations to me, they are generally well versed in various aspects of dealings where the investor-landlord may not have a clue as to obtaining a zoning change to increase the value of a property.

I have also read in forum postings how "pooling" private investors into a real estate investment is regulated by the SEC as well.Hopefully someone on BP know who might be able to shed some light on my concern.

I also agree that the analysis is all about cash flow and cap rate (and also IRR, but not cash-on-cash -- I'll explain in a sec)A complete analysis of a potential income-property investment should include not only its current performance, but also a reasonable projection of its future performance througout the expected holding period.

I'm trying to get a grasp on the world of self-employment taxes/FICA/SECA and specifically if I would be affected in this real estate situation.Can I completely avoid these taxes with no employees/managers, and just run the real estate business (passive income) with the members themselves?

If that were the case, every time my brother wanted to borrow $20 and promised to pay me back $25, I'd have to register with the SEC... :)As

This means those payments not subject to SECA tax and—provided the shareholder material participates in the business—they are not considered passive income.Thus, an S corporation can do some tax planning that can not be accomplished in a typical LLC.

The SEC had created a "safe harbor" which under rules 504, 505, and 506 spelled out parameters of a private offering, which, if followed, would not be challenged by the SEC as a private offering exempt from registration.

Kris Krohn the founder had been investigated by The SEC as they should any company that makes promises who can mislead the public.

It ended up being taken down in 2008 by the SEC as a Ponzi.