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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Disclosure Law(s) Posted by Ward-CA- on September 05, 2001 at 7:00 PM In Reply to: Disclosure Law(s) posted by Troy on September 05, 2001 at 11:55 AM : Ward, great article this month. : In your description of the first terrible "R" of "Raising Cash" you state, "The caution here is to comply with state/federal securities regulations regarding solicitation rules and disclosure requirements." : In essence, what are those rules and requirements? =•=•=•=•=•=•=•=•=•=•=•=•= Troy, in essence the securities regulations deal with several issues. One is making sure you are exercising a suitability test with your investors. That is, that you’re not taking money from unsophistiated investors who don’t realize the true speculative nature and hence risk, of investing in foreclosures. Another issue is that you limit your reach for investors for a particular venture to a circle of no more than 35 prospects who already know the promoter or know of the promoter if you are availing yourself of the private placement exemption wherein you don’t have to file documents with the SEC for approval as a public offering. If done properly, you will also be qualified as exempt from registration with your state regulatory agency too. The only disclosure document required is a private placement memorandum that would set forth all the risks involved in your private syndicate. An excellent book on this topic is Claire Fox’s “Syndicating Single Family Homes” published in 1982, ISBN 0-9601530-6-3. Though it is out of print you should be able to find it in your large central library. A final issue is that of exercising good bookkeeping protocol, such as timely and informative reports and year-end tax info to your investors, and being scrupulously careful not to commingle yours nor anyone else’s money with other accounts belonging to other parties. Hope this makes this topic clearer. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, great article this month. : : In your description of the first terrible "R" of "Raising Cash" you state, "The caution here is to comply with state/federal securities regulations regarding solicitation rules and disclosure requirements." : : In essence, what are those rules and requirements? : =•=•=•=•=•=•=•=•=•=•=•=•= : Troy, in essence the securities regulations deal with several issues. One is making sure you are exercising a suitability test with your investors. That is, that you’re not taking money from unsophistiated investors who don’t realize the true speculative nature and hence risk, of investing in foreclosures. : Another issue is that you limit your reach for investors for a particular venture to a circle of no more than 35 prospects who already know the promoter or know of the promoter if you are availing yourself of the private placement exemption wherein you don’t have to file documents with the SEC for approval as a public offering. If done properly, you will also be qualified as exempt from registration with your state regulatory agency too. : The only disclosure document required is a private placement memorandum that would set forth all the risks involved in your private syndicate. : An excellent book on this topic is Claire Fox’s “Syndicating Single Family Homes” published in 1982, ISBN 0-9601530-6-3. Though it is out of print you should be able to find it in your large central library. : A final issue is that of exercising good bookkeeping protocol, such as timely and informative reports and year-end tax info to your investors, and being scrupulously careful not to commingle yours nor anyone else’s money with other accounts belonging to other parties. : Hope this makes this topic clearer. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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