Syndicating Deals with Friends / Family
Hey All, 

Looking for any insight or advice some of you have on taking down deals with a small group of friends/family.  My dad and I have done a few over the years just the two of us, and I'm curious how some of you might structure it to include a wider pool of potential investors.  It's been very easy thus far as we just put the loan and title in my name with a side-agreement to distribute proceeds, etc. 

In this new scenario I'll be acting as GP but don't necessarily need to take the associated fees; I simply want to control the transaction. 

If it changes your view, I'm in a top-tier market and will be hunting for value-add multifamily opportunities (welcome to the club).  In the past, my dad and I have renovated buildings, bolstered the income and refi'd out and now just hold in perpetuity. 

I'd like to have a subscription-based model where I simply send out a capital call to investors with details on the project as opposed to having a more fund-based model.  

Where should I start?  I have a lawyer for the operating agreements and LLC's, but am unsure the best way to structure given our strategy. 

Any and all insight appreciated!
[{"id": "fahreya", "text": "Google sec 506 reg d", "replies": [{"id": "fahw1li", "text": "Would this exclude a small retail guy from passively investing, say, $15-25k (since he/she wouldn't be accredited)", "replies": [{"id": "fahx1sy", "text": "I\u2019m not an expert in these so I don\u2019t know. I understand there are different ways to structure them to accommodate accredited vs un accredited investors. They have pros and cons. You NEED a lawyer who specializes in this stuff as it is REALLY nuanced stuff.", "replies": [{"id": "fahy6ss", "text": "Appreciate the response!", "replies": [], "depth": 4}], "depth": 3}, {"id": "fahxjkk", "text": "IANAL but I\u2019m pretty sure it matters whether you are marketing to the public or not.", "replies": [{"id": "fahy5vt", "text": "Right - and they won\u2019t be marketable securities either so I\u2019m not sure how much it applies.\n\nGo Buffs btw!  Graduated in \u201812.", "replies": [{"id": "fahyeld", "text": "It doesn\u2019t mean marketable in the sense that it\u2019s easily traded, it means available to the public. SKO BUFFS!!!", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fai11hm", "text": "tl;dr - depends on how well you know the people you're asking to invest with you. \n\nAs mentioned in this thread, these would most likely be run as a Reg D offering which your attorney (hopefully) will also advise and set up the proper filings for you. \n\nDepending on who you're asking to invest with you will determine whether or not they have to be accredited. If you don't know them and have a \"pre-existing substantive relationship\" with them, then you would likely be making a general solicitation and would need to follow the guidelines for Reg D, Rule 506(c) - which requires that EVERY investor in the deal be accredited and you take reasonable steps to actually verify that they are, in fact, accredited.\n\nIf you know the people and have a pre-existing, substantive relationship with them, then you could possibly run it as a Reg D, Rule 506(b) offering which is the old-school way of not advertising these investments. In that case, investors could \"self-certify\" they are accredited and you can have up to 35 non-accredited, *but sophisticated*, investors in each offering.\n\nBasically get an attorney that understands syndication and private placement law because you can get into a whole heaping helping of trouble if you don't do it correctly.\n\nOh, and don't trust people on a random reddit thread, get a good attorney.", "replies": [{"id": "fai324i", "text": "Very much appreciate the reply.  Thanks hoop!", "replies": [], "depth": 2}, {"id": "fai395c", "text": "What advice do you have for finding the right attorney?", "replies": [{"id": "faiu5jr", "text": "If you have any great local mentors they'll hopefully recommend some.\n\nYou can Google for crowdfunding attorneys, they'll know about the general solicitation space.\n\nMake sure who you're working with has experience in real estate syndication and see if they'll run everything through to the state/federal filing level.", "replies": [], "depth": 3}], "depth": 2}, {"id": "fai3odq", "text": "To answer your question, I know all extremely well and the total investor pool likely wouldn\u2019t exceed 5-6 people.  \n\nI\u2019ll be speaking with a lawyer regardless, was just curious if anyone had done or seen this themselves and had some practical advice.", "replies": [{"id": "faj67nh", "text": "If its a small amount of people, can you just do a Joint Venture? Then you wouldn't be \"raising money\" and it would just be a partnership between everyone.", "replies": [{"id": "fakew5k", "text": "Yes and maybe that\u2019s the play- seems easiest but going to speak with an attorney", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "faj1y36", "text": "One way would be to give your equity investors a preferred return, then share any back end profit after expenses are paid off the net income.", "replies": [], "depth": 1}]