Launching Real Estate Syndications - Ep 20 - Final Distributions of Returns to Your Investors

You’ve basically re-entered the atmosphere and you’re on the surface of the earth. Now you just need to emerge from the capsule. And that means making those final distributions to your investors. There are several processes to do this... Visit the web version here: https://www.moschettilaw.com/launching-real-estate-syndications-final-distributions-to-your-investors/

Tilden Moschetti: You've
basically re entered the

atmosphere and you are on the
surface of the Earth, you just

need to emerge from the capsule.
And, and you are done. And by

that, I mean make those final
distributions to your investors.

Now, how do we do that? What is
the process for doing it?

Well, there's several processes
that we use. So first off, we've

gotten out of this big pot of
money that the deal is closed,

the first thing we do is we call
up our accountant and we say, is

there going to be a taxable
event? What is it going to cost

for me to close out anything
that happens? So that way

everything is, is normal and
takes place in a normal way. Now

most of the time, your taxes are
going to flow through directly

to your investors, and you don't
need to worry. But check with

your accountant. First, I've had
it bite me where my accountant

said, no, no problem. And then
the accountant later said, Oh,

actually I made a mistake, there
is going to be taxes that the

company itself owes. So check
with your accountant and double

check with your accountant,
because it creates quite a mess

otherwise. So check with the
accountant First, figure out

what the cost is going to be.
And see if you can pre pay that

amount with the accountant to do
all of your closing K ones. So

do all of the paperwork and get
all that stuff done. See if you

can arrange and get a price on
it that's fixed. And that they

so that they can do that work
right now, rather than waiting

until the normal tax cycle. Now,
they may not be able to actually

issue the K ones yet, depending
on where it is. But they can

certainly charge you for it, and
then do the work when it's done.

That way. It's just one thing
that's off your plate that

you've already paid for. And
it's done, the cash is spent,

you've already allocated,
there's not going to be more

owing, talk to you and a lawyer
if you've also got some other

closing stuff to do to see if
there's any costs that are

associated with that, what we're
trying to do is take this pot of

money and get rid of all of the
expenses out of it so that the

only thing left is distributing
that cash to the investors. So

now that you've done that, you
want to take all that cash, and

you're going to add into that
cash, all the amount that's left

in reserve. So all that reserve
money is also cash that goes

back to the investors, it's
their money, right? That's what

the reserve account was for. So
that all goes back to them. And

then it's a simple matter of
figuring out what the what that

home price is going to be per
share, queuing it up and making

it accordingly. Now here's one
other step that I do. And I

strongly encourage you to do it
as well send the each investor a

final accounting that shows
every single distribution that

you've done, and then show them
where that relates into the pot.

Because every now and then
there's been a little bit of a

different calculation that's
moved things by $1 or two. And

this is your chance to square it
up, you make a nice statement

showed shows everything and then
make sure everything tallies at

the end before you send that to
all your investors. And then you

can then make those payments,
whether by direct deposit, which

is a lot better, because you can
close that bank account sooner

wire or you have to do it by
cheque, you can do it by cheque.

But then you have to wait for
the checks to clear. And I've

had the situation where I've
sent checks to an investor and

it hasn't closed for like six
months. And then there were more

fees because the bank was on top
of it. Now, it wasn't such a

huge dollar amount that I was
stressing about it. I just paid

those out of my money because I
needed it closed. I knew that

they would get it done and I
didn't want to be nickel and

diming them and you probably
would make the same decision. So

that is how we do final
distributions. And in our next

module, our last last module for
reentry. We're going to go

through the closing itself.
We're going to just reiterate a

few of the things we talked
about here because this is

really we're putting the bow on
the package and all is done.

You've now emerged out of the
capsule and now it'll be the

closing party at at NASA
Headquarters There's so with

that we'll go to the next module

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