REQUIREMENTS FOR SOLICITING INVESTORS FOR A REAL ESTATE FUND.

Taking money from investors is governed by Federal Securities Laws. In this case, you would comply with Regulation D, Rule 506(c). Compliance with Reg ‘D’ Rule 506(c) is the purview of the U.S. Securities & Exchange Commission.

• Under Reg ‘D’ Rule 506(c), your responsibility is to provide investors with all “material information” regarding your investment offering that an investor would reasonably need to make an informed decision. Producing this information as a Private Placement Memorandum, aka PPM, allows you to prove, if necessary, that you provided the investor with “all material information.”
• I am sure you have heard the term (IPO) – Initial Public Offering. Companies raising investor capital usually do so through an IPO. However, it is very expensive, costing hundreds of thousands if not millions of dollars. Raising investor capital using Regulation ‘D’ Rule 506(c) provides an exemption from requiring an IPO registration. In this document, you can learn how to create the Offering Documents – (PPM) Private Placement Memorandum that provides the investor prospects with the information needed for them to be reasonably informed. My fee for creating the Offering Documents is $4,800. I also have arrangements in place where you can finance part or all of my fees. No interest will be charged if you repay the loan within 6 months. You repay the principal only. (Also note: There also is language within the PPM documents authorizing your reimbursement of funds spent to prepare the Offering Documents.)
• Investor Solicitation -Under Rule 506(c), you can advertise for investors. For example, a website, newspaper advertising, television, radio, etc.

The basis of your investor presentation should be:

1. Buy / Fix and Flip. 75% to 100% of the Profits from the Fix & Flip are distributed annually.
2. Buy / Fix / Run it as an Airbnb investment.
   a) Airbnb Rental income is included in the annual distributions.
   b) Sell the Airbnb assets in 2 – 4 years as the real estate assets appreciate over that time period. The profits from sold appreciated assets are part of the annual distributions.
   c) Investor funds are always secured by either the real estate properties or the funds in cash.

**In the Offering Documents I create, I try to anticipate and answer most investor questions.

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