Pooling funds
From: Mike Mariano (mikeschemataworkshop.com)
Date: Mon, 8 Feb 2010 16:14:53 -0800 (PST)
Regarding pooling of funds for investors:

When Grace & I formed our LLC here in Seattle for property acquisition
and then needed to raise some of the needed equity, I thought our
attorney was just making a lot of work and extra fee for himself.
However, since then (mid-2007) there have been a lot of
investor/scammer-types here in our area that have also been busted for
losing a lot of friend and family money...and not revealing everything
properly and per SEC regulation.  It turned out that a lot of these
friends and family thought their money was safe and secure and would
provide a fair rate of return without any risk - not to mention the risk
of losing everything - which many caught in these pyramid schemes
obviously have.

I believe the cut-off is less than $2M of net worth - if your investor
is worth less than that, they are an "unaccredited investor" and need to
have full disclosure of the risks associated with investing in real
estate (defined as a "security").  The SEC is very prescriptive about
what needs to be provided to the investor...it's a lot of legaleeze, but
the rationale for it is also law.

Someone on the listserve mentioned forming an LLC/LLP for $500, which is
fine, but should not be confused with the additional complexity of
actually taking investor money and being sure that the LLC/LLP addresses
the investors and SEC law appropriately.  Find an attorney you trust to
help you through this process for your own peace of mind...as well as
that of your investors.

Mike

michael mariano aia   architect & co-founder
schemata workshop | empowering communities through architecture

1720 12th ave #3  seattle wa 98122   v 206 285 1589
www.schemataworkshop.com

Recipient of 2009 Mayor's Small Business Award

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Message: 9
Date: Mon, 8 Feb 2010 17:54:24 -0500
Content-Type: text/plain; charset=US-ASCII; format=flowed; delsp=yes

In re: pooling funds.

You can always create an LLC or LLP and fund the entity w/ no SEC  
interference.  They are very easy to set up.  You can do it in  
basically 15 minutes through Harvard Business Services, Inc. -- google  
their website.

The company will register your name, incorporate you in the state of  
your choice (choose DE -- no state taxes!) and send you written By- 
laws and Articles of Incorporation.   They'll even find you a  
Registered Agent -- you need someone in the state in which you  
incorporate to act as the official legal contact for the entity.

Costs about $500.00.

Boom.  You're done!

And just ONE person can do this.

When you move in -- transition the LLC or LLP to the Homeowner's Assn'.

Best --

Ann Zabaldo
Takoma Village Cohousing
Washington, DC
Principal, Cohousing Collaborative, LLC
Falls Church VA
703 663 3911

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