Expert: Mike Fortunato - 4/19/2009

Question

Hi

I had a question on syndicating real estate
projects/properties.  I would like to buy small investment
properties (4-15 units), but I cannot obviously afford them
all myself, and as a result I would need to get partners or
investors.

I have seen Investor Summary Packets that include Confi
Agreements, Subscription Agreements, and the Investment
Summary.  In these packets they are offering to sell
“units” to own a certain percentage of the deal (For
Example: 20 units for $20K/unit If they are trying to raise
$400K).  Do I need a special license to sell these units or
will an Operating Agreement explaining their position in
the investment be sufficient?

I guess I want to know the proper way of syndicating a
property.  

Thank You
Michael  

Answer
There's no single correct way to form a syndicate. I suppose you can make use of the packets you described for that purpose, or you can simply find investors and for some sort of entity to run the business (partnership, LLC, etc). There's no requirement for licensing that I'm aware of, but you should definitely consult with an attorney to help you with the necessary paperwork to form the syndicate.