The importance of using an SEC Attourney when doing a real estate syndication

Why use an SEC Attorney when doing a real estate syndication?

Some will try to bypass this step due to the costs involved…..But don’t be cheap here, this can be money well spent!

On all our projects, we like to use a licensed SEC attorney who specialized in doing real estate syndications. The attorney is responsible for drawing up all the contracts, LLC, subscription agreement, Private placement memorandum and all other various disclosures.

It’s important to have all the paperwork to be do=ne correctly and that the law has been followed to letter. When everyone in the deal is one the same page, it makes things for clear for everyone involved. You can do it all yourself or not do it at all to save a few dollars but I do not recommend this approach.

Securities Act matters

Note that in most cases the offering of an investment in real estate syndication requires compliance with the terms of the Securities Act. Real estate syndications rarely require the filing of a Prospectus, and are typically offered under one of the many exemption provided for in the Act, using an Offering Memorandum.

All developers / owners intending to undertake syndication should seek legal advice regarding the Securities Act prior to offering investment units to potential investors.


For a developer or owner wishing to raise funds through syndication, the process is typically as follows:

1. Identifying the property / project
Responsibility: The developer / owner
2. Creating an ownership / management structure
Responsibility: Developer / owner with legal, accounting and tax advisor

3. Preparing the legal framework (Partnership Agreement, Management Agreements, etc.)
Responsibility The developer / owner’s lawyers

4. Preparing any disclosure required pursuant to the Securities Act and related documentation (Offering Memorandum or Prospectus, Subscription Agreement, etc.)
Responsibility: The developer / owner’s lawyers

5. Preparing financial projections
Responsibility: The developer / owner or its accountants

If the developer / owner will be quoting financial returns in marketing the investment units, then disclosure in accordance with the Securities Act is required, including an audited Future Oriented Financial Information based on lots of assumptions.

6. Identifying potential sources of funds
Responsibility: Developer / owner

7. Raising capital from investors
Responsibility: Developer / owner and brokers / agents

8. Closing the syndication offering and the property purchase
Responsibility: Developer / owner and lawyers

But summarize…We strongly suggest always involving an SEC attorney to keep it all legal and every one happy and on the same page…

If you have more questions about this point. Give us a call at 510-863-1447

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