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Syndications And Private Placements

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Information about Syndications And Private Placements

Published on March 28, 2008

Author: ideal4investors

Source: slideshare.net

Description

Ideal 4 Investors Online Seminar on creating syndications and private placements for buying real estate. For more info, www.ideal4investors.com
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Syndications and Private Placements By Rich Hake Ph. D., Esq.

We Will NOT Discuss Private Lending Hard Money Partnerships Subject to Foreclosures REITs TICs

Private Lending

Hard Money

Partnerships

Subject to

Foreclosures

REITs

TICs

Different Kinds of OPM Debt “ Private Lending” Equity Syndications Private Placements Hybrids “ Convertibles ”

Debt

“ Private Lending”

Equity

Syndications

Private Placements

Hybrids

“ Convertibles ”

An organized group Pooling resources To work toward a common goal To achieve synergy in Profits, efforts, and results What is a “Syndication”?

An organized group

Pooling resources

To work toward a common goal

To achieve synergy in

Profits, efforts, and results

What Kind of Deals? NON traditional investments “ Basket” deals Redevelopment projects Subdivisions A gold mine in Colorado Value Added BIG Uses Leverage

NON traditional investments

“ Basket” deals

Redevelopment projects

Subdivisions

A gold mine in Colorado

Value Added

BIG

Uses Leverage

Real Estate Syndications Seed the development

Experts = expertise, decisions Investors = money, ROI Opportunity = deal, “convergence” Purpose = exit, business plan Team meets a DEAL

Experts = expertise, decisions

Investors = money, ROI

Opportunity = deal, “convergence”

Purpose = exit, business plan

Systems and Teams “ … after two years and a hundred thousand dollars, I thought I would have to drop this and go back to teaching… we did more in two months than in the past two years using your team and your system. Thanks again…” David and Marc, Tomahawk, WI

Define Ownership Define profit split Define roles Define value of exit Valuation of Contributions

Define Ownership

Define profit split

Define roles

Define value of exit

Development Startups Flipping POOLS Define your Purpose

Development

Startups

Flipping

POOLS

Blue Sky Laws "speculative schemes which have no more basis than so many feet of 'blue sky'"; "to stop the sale of stock in fly-by- night concerns, visionary oil wells, distant gold mines and other like fraudulent exploitations.”

"speculative schemes which have

no more basis than so many feet of

'blue sky'";

"to stop the sale of stock in fly-by-

night concerns, visionary oil wells,

distant gold mines and other like

fraudulent exploitations.”

SEC v. W.J. Howey Co. Investment of money In a “common enterprise” With “expectation of profits” SOLELY through the efforts of another 328 U.S. 293 (1946)

Investment of money

In a “common enterprise”

With “expectation of profits”

SOLELY through the efforts of another

328 U.S. 293 (1946)

SEC v . EDWARDS “… .an investment scheme promising a fixed rate of return can be an “investment contract” and thus a “security” subject to the federal securities laws….” 540 US 389 (2004) Deeds of Trust as “securities” www.corp.ca.gov/enf/enforce.htm

“… .an investment scheme promising a fixed rate of return can be an “investment contract” and thus a “security” subject to the federal securities laws….”

540 US 389 (2004)

Deeds of Trust as “securities”

www.corp.ca.gov/enf/enforce.htm

Do’s and Don’t of Raising Capital Solicitation rules Accredited investors Sophisticated investors

Solicitation rules

Accredited investors

Sophisticated investors

Federal AND State Every state has its own too! Rule 147 Government “protects” YOU from YOU!!

Every state has its own too!

Rule 147

Government “protects” YOU from YOU!!

“ No solicitation” laws Do not apply to People you know Referrals Acquaintances Accredited investors Solicitation

“ No solicitation” laws

Do not apply to

People you know

Referrals

Acquaintances

Accredited investors

Accredited investors— Regulation D- 501 Millionaires High income earners (>200K) Charities, trusts, corps, partnerships (>5M) Banks, insurance companies, investment companies

Regulation D- 501

Millionaires

High income earners (>200K)

Charities, trusts, corps, partnerships (>5M)

Banks, insurance companies, investment companies

Resources http://www.seclaw.com/bluesky.htm

Not just ANY money 1031 exchanges TIC IRS and Developer – Dealer IRAs

1031 exchanges

TIC

IRS and Developer – Dealer

IRAs

LLC, Trust, IRA, Partnership, Corporation, Charity, Person (foreign or US) C Corp S Corp LP GP LLC A word about entities…. Which Entities should you use for raising capital?

LLC, Trust, IRA, Partnership, Corporation, Charity, Person (foreign or US)

C Corp

S Corp

LP

GP

LLC

Which Entities should you use for raising capital?

Any number of different interests Any management structure Any membership interest Can represent the different talents and contributions of the team LLC Flexibility

Any number of different interests

Any management structure

Any membership interest

Can represent the different talents and contributions of the team

A/B Manager Run Pass through taxation No LP – GP problems Short, bright life Why we use an LLC

A/B

Manager Run

Pass through taxation

No LP – GP problems

Short, bright life

Announcement Rock stars make it an event… SELL TO SCARCITY Public payouts Conference call announcements

Rock stars make it an event…

SELL TO SCARCITY

Public payouts

Conference call announcements

Business plan NOT a solicitation or AD Generates Interest “ If accepted….” Announcement is…

Business plan

NOT a solicitation or AD

Generates Interest

“ If accepted….”

Offering MEMORANDUM Requires an RSVP Subscription Agreement Tellable, SELLABLE story “ We are having a PRIVATE party” “ We have not invited anyone yet” Private Offering-PP

Offering MEMORANDUM

Requires an RSVP

Subscription Agreement

Tellable, SELLABLE story

“ We are having a PRIVATE party”

“ We have not invited anyone yet”

Rules of engagement Formulaic The commitment test Numbered, tracked, you want no “flunk outs” “ If you come to this event, this is what MIGHT happen…” Offering memorandum

Rules of engagement

Formulaic

The commitment test

Numbered, tracked, you want no “flunk outs”

“ If you come to this event, this is what MIGHT happen…”

I understand the RULES AND RISKS of the ball, and hereby apply for a ticket… If you accept this invitation please send me…. “ Engraved invitation…” Subscription Agreement

I understand the RULES AND RISKS of the ball,

and hereby apply for a ticket…

If you accept this invitation please send me….

“ Engraved invitation…”

Tracking Certifications Cannot pay, cannot play Subscription Agreements allow you to accept their offer…. “ Please invite me….” Subscription = CYA

Tracking

Certifications

Cannot pay, cannot play

Subscription Agreements allow you to accept their offer….

“ Please invite me….”

Rules of engagement The dirty details Who is in charge Who gets paid and when “ What if’s”… When the deal ends “ Ticket to the event” Operating Agreement

Rules of engagement

The dirty details

Who is in charge

Who gets paid and when

“ What if’s”…

When the deal ends

“ Ticket to the event”

Announcement Offering Subscription PPM Agreement Private Placement (Recap)

Announcement

Offering

Subscription

PPM

Agreement

Make sure you define the deal Make sure you define the roles Make sure you have a Plan B Before the Entity

Make sure you define the deal

Make sure you define the roles

Make sure you have a Plan B

Think the “unthinkable” Death Divorce Bankruptcy Corruption Lawsuits Members or the entity Preplan…

Think the “unthinkable”

Death

Divorce

Bankruptcy

Corruption

Lawsuits

Members or the entity

Define rules today Fix the $$ amount now save $$ later Buy - Sell

Define rules today

Fix the $$ amount now

save $$ later

“ Bankable” package “ Smells like success” Equity in deal - “loanable” Huge Deals work No “creative” way Why use Syndications?

“ Bankable” package

“ Smells like success”

Equity in deal - “loanable”

Huge Deals work

No “creative” way

Tools Save Toil Know which rules apply to your deals (and what does not) Get a simplified “rule book” Get examples of the paperwork Learn what the experts know (and don’t know) See one, do one, teach one Attract money and deals

Know which rules apply to your deals

(and what does not)

Get a simplified “rule book”

Get examples of the paperwork

Learn what the experts know

(and don’t know)

See one, do one, teach one

Attract money and deals

Evaluate a Syndication Prepare a deal for Syndication Doing your own Syndication

Evaluate a Syndication

Prepare a deal for Syndication

Doing your own Syndication

Syndication Home Study Course BYOB $697 Syndication Quickstart Course $1,995 Forms CD $2,495 20 HR Audio Set 20@ $250 ea.= $5,000 1-1 deal consultation $2,000 Total $12,187

Syndication Quickstart $797 BYOB Free Forms CD Free 20 HR Audio Set Free 1-1 deal consultation Free Syndication Home Study Course

Syndication Quickstart $797

BYOB Free

Forms CD Free

20 HR Audio Set Free

1-1 deal consultation Free

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