Practicing Safe Syndication

December 19, 2017 By Corey Peterson

Entrepreneurs raise capital so that they can go on and do bigger and better deals. In this type of business, Multi-Family investing, looking for safe syndication and help from private placement lawyers are some of the basic securities an Entrepreneur would need.

Mauricio J. Rauld, a PPM Lawyer. Founder and CEO of Premier Law Group. He is a nationally recognized expert in asset protection and private placements. He represents and educates investors from all around the world. He also assists with raising capital and ensures compliance with SEC, State rules, and regulations.

He’s been a California licensed attorney for 18 years and specializes in security laws. He helps entrepreneurs raise capital and do bigger and better deals and has been doing this for 15 years.

Mr. Rauld will provide his insights on safe syndications, exemptions and how private placements can help entrepreneurs secure better deals for their projects.

Safe Syndication

Syndication is the pooling of resources. Usually monetary to make an investment as a team or as a group. Aside from monetary, other investments such as commitment, time and efforts should also be factored in. Some people have a lot of money but they couldn’t be bothered to go and try to figure out how to learn about the business. One person can step in and provide those other resources that doesn’t necessarily have to be money and win as a team.

Several investors are busy professionals or retirees and are done working. These people would want someone they can trust with regards to their money and the process. Taking money from other people and managing that with an expectation of a return, that’s a security.

Making sure that your investors have all the information available so that they can make an intelligent decision as to whether it’s a good investment for them.

Regardless of structure, if one is selling a security, they should comply with the security laws. Entrepreneurs should get the context, to kind of understand where the legal part fits into the overall syndication process.

A good number of people would also ask for commission or referral fees. This is because of certain tasks they have rendered for the team. This is possible, only if they are licensed and an SSC broker-dealer. Giving commission is not easy, one should get an ICC broker license for this and getting a license for this is very time-consuming and expensive, that’s not a realistic thing.


Make sure you’re practicing safe syndication. Anytime you deal with a security, there are only three things you need to worry about. First, you either need to register that syndication or that security with the SEC – The Securities and Exchange Commission which is a Federal Government agency. Second, you’ve got to find an exemption to registration, or third, it’s illegal.

Registering the syndication gives more leniency on what you can and cannot do. But this is a long and expensive option. Finding the best exemption for your deal is still the best choice. Nobody looks good in stripes. Nobody wants to do the Bernie Madoff thing. The Bernie Madoff thing is intentional fraud, that was a sample of the third option.

One can actually do an illegal offering by doing something one would not think are illegal. For example, failure to disclose something, that could be a violation of Securities Laws. Hiring professionals will allow us to know the different options, one of this is called Reg-D exemption. It’s a private exemption, they don’t have to register it, and there’s an unlimited amount of money that you can raise. There’s also the 506-B exemption. Unlimited amount of money that you can raise, take accredited investors, and also an unlimited amount of non-accredited investors which is 35.

An accredited investor is essentially anyone who has either a net worth that’s over $1 million, excluding their home residence or they’ve earned $200,000 a year for the last two years with a recent justification of earning this year. If you fit those parameters, you’re an accredited investor. But if somebody’s not accredited then you’re limited to 35. The big prohibition on that exemption is you cannot advertise.

You can only accept accredited investors and you must take reasonable steps to verify that they are accredited which is an additional layer of compliance. If you’re dealing with investors that you’ve never met before, it’s a little bit daunting and uncomfortable asking for their financials. A lot of people are turned off by that. There are plenty of third-party verification companies that, through a very reasonable fee, will do the verification for you. They’ll ask for the documentation.

Private Placement Memorandum

PPM or a Private Placement Memorandum essentially is a disclosure document which basically tells you every single possible way you could lose your money. It’s really meant for primarily a protection for the investors. Because the market can turn and sometimes deals don’t go as planned.

Make sure your investors have all the information, all the material facts they can make an intelligent decision as to whether this is a good investment for them. It also protects the syndicator. At the end of the day, everyone would be thankful for having all the structure, all the documents, and having that big disclosure available.

The PPM is mandatory with non-accredited investors. Only accredited investors it is not required but they still need a complete disclosure. Each deal is different even if it’s the same exact market. The same PPM can’t be used on every deal. You need to do underwriting to understand what disclosures are truly necessary. If PPM is not provided, it could be a red-flag or an illegal offering.

Right protection for your business, yourself and your investors are some of the things that one should not take for granted. Pay attention to the whole process of syndication. Understand that this something that can’t be done alone and there are professionals out there like Mr. Rauld to help you get that investment flowing.

Again, if you haven’t, do download my Free Workshop Quickstart Video Series and learn how to raise private money for your investments. And if you like what you have heard, please leave a review on iTunes. Thanks a lot, remember guys, your paradise is possible.

Corey Peterson Administrator
Chief Kahuna , Kahuna Property Partners
As the owner of Kahuna Investments, Corey strives to provide his investors with stable cash flow returns and long-term capital appreciation by buying multi-family apartments. Corey has managed and acquired over $65 million in real estate across the country. He is the bestselling author of ͞Why The Rich Get Richer – The Secrets to Cash-Flowing Apartments͟ and host of the Multi-Family Legacy Podcast. He speaks around the country on this subject including at Harvard and Nasdaq.Corey is frequently featured on FOX, CBS, ABC, and NBC affiliates.
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