Amy Wan, founder & CEO, Bootstrap Legal reveals the Do’s and Dont’s for raising money under Regulation D for a real estate syndication.
This show starts off with Amy explaining the difference between private markets and capital markets. What options do real estate investors have while raising money from private markets? You will also learn SEC’s criteria for “accredited investors”. We also share whether the SEC permits you to solicit investors.
We reveal why Regulation D Rule 506 (b) is the most popular capital raising option for real estate investors. What are the drawbacks of using Rule 506 (c) or Rule 504 for raising capital? For all this and much more, tune in to our latest show now!
Our Gracious Sponsor:
See The Real Estate CPA’s Special Virtual Workshop for the listeners of The Real Estate Syndication Show on How to Answer Tax Related Questions from Your Investors! http://bit.ly/TheRealEstateCPA-Syndication
Time Stamped Show Notes:
- 00:29 – Whitney introduces Amy to listeners
- 01:38 – How to choose the correct regulation for your syndication
- 03:39 – Private markets vs. Capital markets – Understanding the difference
- 04:07 – Who is an accredited investor? Amy explains in simple terms
- 05:05 – Income criteria for accredited investors
- 05:48 – Who is a sophisticated investor?
- 06:37 – Do you need a pre-existing relationship for soliciting investors?
- 07:50 – How do you forge a pre-existing relationship with an investor?
- 08:36 – Should you track your communications in order to prove a pre-existing investor relationship to the SEC?
- 09:06 – Get your tax queries answered by the Real Estate CPA
- 10:53 – Does the SEC have clearly defined guidelines for “pre-existing” relationship?
- 12:57 – Can you present your offering to referrals?
- 14:23 – Understanding the nuances of Regulation D 506 (b)
- 16:48 – How to self-certify accredited investors
- 17:49 – Is general solicitation permissible under Rule 506 (b)?
- 18:20 – Is it advisable for syndicators to raise capital under Rule 506 (b)?
- 19:34 – Can you get into trouble if a self-certified accredited is not?
- 20:20 – How does Rule 506 (c) differ from Rule 506 (b)?
- 21:20 – What are the drawbacks of Rule 506 (c)?
- 22:27 – How do you verify that an investor is accredited?
- 24:10 – Should you do a 506 (c) for all your offerings?
- 24:57 – What are the challenges of raising money under Rule 504?
- 27:38 – Schedule a call with Whitney now!
- 27:48 – A Special Thanks to our sponsor, LifeBridge Capital
In this episode, you will learn
- Who is an accredited investor?
- SEC rules pertaining to a “pre-existing” investor relationship
- Pros & Cons of raising capital under Regulation D 506 (b) and Regulation D 506 (c)
- Challenges of raising capital under Rule 504