|Pooling funds||<– Date –> <– Thread –>|
|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 ------------------------------ 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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