I work at a Boutique Real Estate Investment Group, but I'm curious as to the requirements for a real estate fund being open to outside investors. Do private REITS or Real estate crowd funds have to be registered with the SEC? At what point do they have to carry securities licenses? Which licenses would be required ?(portfolio manager of the fund). Has anyone here ever managed a fund or syndicate or even worked at one (Private REIT) that solicited outside investments? Thanks !
Trending Content - Real Estate Forum
Career Resources
Any thoughts?
yes. PM me, I have syndicated 24 offerings
Bump
Non-listed REITs have to register with the SEC, source https://www.sec.gov/oiea/investor-alerts-bulletins/ib_nontradedreits.ht…</a">here.
The only one I know of is this one https://www.colecapital.com/index</a">here. It seems like this is partly managed by Vereit though?
Thanks for the reply! +1 banana VEREIT basically owns COLE Capital, don't know the whole background of it though. I think what I really meant to ask was more about Private REITs and how they operated...which was found in your link as well- Thx
https://www.forbes.com/sites/erincarlyle/2014/06/18/meet-nick-schorsch-…</a">Here is another good article about non-listed REITs, apparently this guy is a billionaire. It appears he or one of his partners may be in legal trouble though.
I have a question. What if you own a property and want to sell the equity in it to private investors? Do you need a securities offering? Let's say its all people that I know and its not marketed.
Example: We buy MF property in 2012 and our equity piece is $5 million. Instead of selling it, we sell the equity at a higher valuation and collect $5 million, while maintaining and equity portion and management fees. Thoughts?
I believe you can just form a TIC...
As mentioned above, a TIC structure can be formed. But if the owner is a 4+ TIC structure, you start crossing lenders off your lists due to the complexity and boilerplate loan docs no longer being applicable at that level.
I have often seen single asset LLC structures where the Sponsor is managing member say 25% ownership and the outside investors are non-managing members (75% ownership). The terms between the two parties will be described in the operating agreement. A limited partnership structure can also own the asset.
I’d recommend speaking with an experienced real estate entrepreneur or attorney who has personally set up these various ownership structures.
TIC is a specific structure, typically used for tax deferrals. Not the best vehicle for your situation.
If you do what you describe, it is a securities offering. Better questions are: 1. Should I use a PPM? 2. Do I need to register with a BD?
I know this is old so PM me if you have more questions.
why don't you do a cash out REFI? debt is cheaper than equity so that will JUICE returns.
i think this is a better option than selling equity interest that require a higher return from investors at the peak of the market. only reason why you will sell equity is if you want to sell to dumb money and not pay them quarterly cash flow dividends, etc. also, you can REFI at a 1.4x DSCR to have enough cushion for a downturn while still taking out some cash. if you bought in 2012, that thing must be BLOWING crazy ass cash flow by now.
Don't quote me on this, but it's my understanding that a private REIT can accept outside investors as long as they are accredited investors. I was an investor in one once and they didn't need to register with the SEC. They didn't even really check the accreditation of investors, but we had to sign something saying we were accredited investors.
Cupiditate quos voluptatem dolores qui est. Vel iste animi pariatur saepe. Ut est voluptatem earum sed. Molestias nesciunt sunt possimus. Beatae aliquam eum enim occaecati non quis.
Sit asperiores aspernatur omnis velit. Officia recusandae distinctio voluptas quae est. Laborum est ipsam cum nostrum quibusdam ipsa suscipit repellat. Quaerat molestiae mollitia quasi impedit. Veniam provident deleniti eum. Necessitatibus sequi omnis ipsam dolorem et quod inventore.
Repellendus non eos et in laboriosam reprehenderit sint corrupti. Beatae quidem perspiciatis et quia voluptatum deserunt sint. Laborum aut culpa maiores placeat iure molestiae. Modi nobis sunt enim omnis ea.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...