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Boy the conference call with Denis was packed full of great information!
Let’s have a contest to see who can put together the first co-venture deal!
What’s the prize? Help me come up with some good ideas?
Avoiding security issues is easier then you think. Just complete a state SEC filing. In most states it’s only a couple of hundred dollars to do so and fill out a form. There are simple compliance requirements and any decent CPA can help you with paper filings.
Most states allow you to do advertising as long as you do NOT offer any guarantees and do not co-mix monies…in fact for real estate purposes you NEVER touch the investors money…it goes to the closing attorney directly to be applied as required. But NEVER do more then 2 investors per house, one who is in the first position and another who would be in a second, and clearly let them know their positions.
In Tennnessee, where I am, I can actually have up to 15 investors and as long as no one single investor contributes more than $200,000 I do not need to do an SEC filing, but I did it anyhow.
Find an SEC attorney in your state, tell him what you are planning to do, ask what the requirements are and what the exceptions are…you’ll find for our type of business it’s simpler than you think.
-patrick
Greg,
You do NOT ever want to do advertising for money. I know way too many people who got in trouble doing that. Listen to Denis’ call, he says he never advertised. I guy I know in Ohio got a $10,000 fine for advertising for money – 1st offense. I know another investor who lost all their rental portfilio in a lawsuit about advertising for money on their web site! Another guy got a threatening letter from the Securities and Exchange commission for his state and some in PA got a letter from the Insurance commissioner threatneing a $50,000 fine after he mailed to a list of people with pension plans. ( after he paid $1500 for a semianr where they taught that BAD Advice)
Just don’t do it.
So, where do you get money?
People you meet locally – you never know how much your neighbor has just sitting in the bank
People you meet at real estate investment seminars – especially Jack’s
Jack’s cruises are full of people with deep pockets — a good reason to come. I know one person how got another investor to buy the $500,000 house he is living in and he just pays rent – so the money guy can get a big depreciation. It works out good for everyone.
It is always better to get someone to say they would be interested if you find the deal. Then go find the deal.
Jackie,
I totally agree with the philosophy of approaching people privately…and that is what I have done to get the few investors that I have now.
I was only pointing out that in order to be sure that you are in total compliance you can do an SEC filing and that doing so is easier and cheaper then most folks think.
I would, however, be willing to bet that those folks who got “busted” did not do an SEC filing and were trying to skirt the law.
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