Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to take the opportunity to discuss how to find and use these team members in a little more detail.
Just to recap, some of the essential team members that you’ll want to have in place include:
- Bird dogs
- A real estate agent or agents
- A commercial mortgage broker
- A banker (one or more)
- A title company or closing attorney
- A real estate attorney
- Private lenders
- An SEC attorney (if part of your business includes securing private funding)
- An asset protection attorney
- An accountant or CPA
- Property management companies
- Contractors
In my previous article, I introduced the idea of working with private lenders to help attract capital to your apartment business. In these cases, are you asking people for money or providing them with investment opportunity? I’d argue the latter and, if you’re hung up about pursuing private lenders because of the idea of ‘asking for money’, you are well served to restructure your thinking on this because it is indeed opportunity that you are offering.
There is a fundamental principle that you need to keep in mind when pursuing private lenders for your business. Since you are offering an investment opportunity for which a return might be reasonable expected, it can be argued that you are offering a security to a prospect. Yes, that’s ‘security’ in the same sense as stocks and bonds.
When companies offer shares of stock, there are procedures that must be followed with the Securities Exchange Commission (SEC), who govern the exchange of commodities that are usually purchased with the intent of making money. Without getting into all of the jargon, it is important for you to recognize that your real estate pursuits may indeed fall under the jurisdiction of the SEC and especially so if you are seeking funding from private sources.
So, what do you do if you know you need money for one or more of your investment projects? You know the money is out there and naturally want to make sure you’re pursuing it the right way. The best way to proceed is to seek the advice of an SEC attorney, someone who specializes in securities laws and who can advise you how best to proceed.
Is it necessary to have an SEC attorney for all of your real estate investments? If you are doing any of the following, then it is a pretty good idea:
- You are seeking large amounts of capital (e.g. $100,000 or more)
- You are offering a return on the money that is being sought
- You are offering an ownership interest of any kin in the asset being purchased
- You are seeking funding from more than one source for the same project
The bottom line is to play it smart and recognize that your investments are important to both you and the money sources. Be responsible, consider what you would do if you were in an Investor’s shoes, and know that SEC attorneys are there to guide you when you most need it.
Can you see how your empire can be created without you not having to be a jack of all trades? Follow with me through this series and you’ll continue to see how your own team can help you acquire the apartments you seek and help build the fortune that is out there for the taking!
February 3rd, 2010 at 10:08 am
great post! keep it up, i will be visiting more often