So as we wrap up in this video,
the seventh of our seven part

series on how to stay out of
trouble in in compliance with

the SEC, and state regulators,
when you're doing a private

placement offering through
Regulation D, Rule 506(b) or

Rule 506(c). How do we do it?
What's the best practices, we've

gone through the things that I
think are going to get you in

the biggest amount of trouble if
you do them? But most of my

clients want to just stay out of
trouble altogether. And so I

think you're probably in the
same way, how do I stay out of

trouble and just make sure that
I am always in compliance, so I

don't have to worry about it.
Well, this video is going to go

through those. And since it's
been a seven part series, we're

going to do the seven most
important best practices to just

stay in compliance from the very
beginning on when you're putting

your Regulation D offering together.

When you're putting your
Regulation D offering together,

the last thing that you want to
think about is getting in

trouble. But that's the whole
point of the set of videos is

was going through all those
things that are the most likely

to get someone in trouble if
they do that. So this video,

we're going to go through the
seven most important things that

you can do, right now, to make
sure that you're on the good

side with the SEC in the state
regulators. Remember, they're

just trying to do their job.
They're trying to protect the

investing public, they have a
mandate, they have a mission to

fulfill, to protect that
investing public, to make sure

that unscrupulous people are not
defrauding people out of their

good hard earned money. That's
why they're there. Our job is to

make sure our investors succeed,
the more our investors make

through us, the more investors
keep investing with us. So it's

in our best interest to be so in
compliance and do the right

thing by our investors. So how
do we do that? What are the best

best practices in order to stay
in compliance? Well, number one,

is start with a well crafted
private placement memorandum.

The private placement
memorandums job is to put all

the pieces together so that the
investor knows what's coming

their way they know what they're
putting their money to the terms

of the offer, you know, what
they're getting for what those

distributions are going to look
like, what conflicts of interest

arise, because there always are
conflicts of interest when

you've got somebody making a
profit, which is what you're

doing off of an investment
vehicle. So what are those

conflicts of interests? Let's
disclose them and put them out

there? What are the risks that
are inherent is an investment

and investments are inherently
risky, but let's go into a

little bit more detail. So it's
doesn't just seem like we're

saying, all investments are
risky, but what are the risks

that are specific to the asset
class that you're doing? If

you're doing a real estate
development deal? Well, there's

certain things about doing real
estate development that are just

inherently risky, you may not
get the permits, you may not get

the zonings, cost overruns,
things like that. If you're

doing a business, there may be
specific things as it relates to

your business, intellectual
property disputes, why are you

going to handle that? What is
your mechanism in order to do

that, you have key personnel
that may that are critical to

the success of this enterprise.
Those are the kinds of things

that need to be disclosed. Those
are the risks that are inherent.

Also, inherent is how exactly
you're going to use this money.

So if you're raising 5, 10, 15,
20, 100 million dollars, well,

what is the in the investors are
giving you this? How exactly are

you using it that should be
disclosed and described, so that

the investors know and of
course, a way to contact you. So

if an investor is may have more
questions, they need a way to

get in touch. Now, of course,
that leads us to number two,

following the rules of
syndication, or putting a fund

together. One of those rules is
describing the things that I

just talked about. Giving this
information to investors is

critical. It is very, very
important. And that's why number

one is so important. It's having
that private placement in place.

But following the rules of the
rules and regulation, about

syndications and funds are part
of that as well. And that is

perhaps even more important,
because there are other rules

that are part of a private
placement necessarily, but just

have to be there. Talking about
your investor base. Do they need

to be accredited investors only
if you're advertising, obviously

it needs to be accredited
investors only. If you're not

advertising well, maybe it
doesn't need to be accredited

investors only. But how many
investors does there need to be?

They can there can be all 35 non
accredited investors 35 people

that you actually count whether
they formed an LLC or not, in

any 90 day period, it's just one
of the rules that is inherent if

you're going to be doing a Rule
506(b) offering. So following

all the rules are important. If
there's a bad actor situation,

that may disqualify you
completely from even doing the

offering. But it's better to
know before you put it together,

then when after you've already
put it together and raised

investor money that now you're
there's some real big trouble

brewing. Probably that's not
applicable to you. But it's

worth looking at. It's worth
looking at your partners to say,

are any of these people would
they be considered bad actors,

because if they are, you need to
know it ahead of time. So

following all those rules
together is critically important

for that success. Number three,
is don't try to bid fancy. So

this kind of goes along with
choosing your investors. Don't

try and get too fancy. Don't try
and pull go too far into the

gray area about finding
investors, or what you can offer

or being too ambiguous on
certain things. It's not going

to fly. You just can't get too
fancy, too fancy, too clever,

doesn't work. Being smart,
transparent. That's what works

in this world. If it starts
looking opaque, if it starts

looking like it's being too
clever, or things are getting

hidden, that's when regulators
start picking up their ears.

Remember, these are very, very
smart people. These are people

who have trained for this who
are ready to regulate to protect

that investing public. And so
trying any tricks just isn't

going to work. They've seen it
all before, and they will see it

and see right through it if it's
necessary. So if it starts

seeming like well, you're being
a little too clever. You

probably are. And it's time to
back it off, and not have that

specific business plan and start
thinking how can you put your

business plan together where you
still can be successful, but you

can still do what you're trying
to do. Because there are answers

out there. There are solutions
to every problem that don't need

to rely on clever tricks or
fancy gimmicks. Number four,

don't pay finder's just flat
out. Don't pay finder's. If

you're paying for performance,
doubt is just not going to fly.

You will get caught it's going
to happen. And if and when it

does, it will be very bad. Don't
try and get too fancy on finding

people who aren't really finders
talking about rule number three,

but don't try and skirt that
line. Don't try and do the well

why don't you come into my my
syndication and be a general

partner, but really, you're just
looking for funds, it's not

going to fly and the SEC, and
the state regulators are no,

this is a problem, and they are
going to start regulating it

more and more, I'm certain of
it, it's going to happen. And if

you're doing it if that's what
your business plan is Don't you

can redo though your business
plan in a much smarter way.

Number five is filed the form d
notify the states. So once you

file a Form D, what happens is
you're automatically in that

safe harbor of Regulation D. So
you're automatically covered in

the as long as you've complied
with the rules of Regulation D,

now you're protected, you have
the protection of this is what

the set of rules are. And that
starts with filing the form d.

And then it follows up with
notifying the states because the

states still need to get
noticed, or most of them do

under their own blue sky
statutes. All the states are

required to do under Rules
506(b) and 506(c) is asked for

notification. So as long as
you've done that you've met the

rules. So now the states can't
regulate you except if you've

deviated outside of the rules.
So safe thing to do file the

Form D notify the state's number
six the golden rule. Now this is

the golden rule of well, let me
back up a little bit when I was

in second grade.

In my classroom right up there,
right above the teacher's head

was the golden rule. Of course
that's Do unto others as you

would have them do unto you.
Right. So I like to consider

this the golden rule of
investors. So how you deal with

investors is do unto your
investors, as you would wish

your syndicators to do unto you.
Put your hat of an investor on

and think about what your action
would be like if you're invest

if you're syndicator if you
invested 10 $100,000 into To

this investment, how would you
feel about that? So things that

kind of crossed the line that
I've heard is, well, what if we

just borrow this money to do
this new project? And then pay

it back? Well, let's think about
it really under the with the

golden rule of dealing with
investors, if you were an

investor of this, and you put in
$100,000, and then you found out

that your syndicator was taking
some of that money in order to

start a new project, and you're
gonna get any benefit from that?

How do you think it feel about
it, you'd probably be pretty

darn angry. So obviously, that
fails, the golden rule of

dealing with ambassadors, or
communications, how would you

feel if you invested $100,000,
and you never heard anything

from the syndicator, you'd
probably be pretty darn angry

and wondering what's happening
to your money. Now the

syndication could be going
fantastic. But if you haven't

heard anything, you're gonna be
angry. So do unto your investors

as you would have another
syndicator do unto you. So put

yourself in their place. And
just think about it. Think about

how it's going to be. Because if
you do that analysis on on those

decisions that you're making,
you're going to stay on the good

side. Really, at the end of the
day, all of the rules and

regulations come down to doing
the right thing for your

investors and the investing
public. That's really what the

whole point of almost all of it
is to make sure that the

investing public that your
investors are well cared for. So

do unto them as you would have
another syndicator do unto you.

Pretty simple. And number seven,
engage a syndication attorney.

As experienced syndication
attorneys who have done deal

after deal after deal we've seen
many, many problems arise as a

syndicator. Myself, I've seen
hundreds of deals, not only

through the eyes of where of, of
as an attorney, but also as

somebody who's been in the
trenches there with you engage a

real syndication attorney who's
got the actual experience of

doing regulation, deep work,
engage somebody who you know, is

a specialist in this field, not
just somebody who's a fly by

night, who just does it on, off
and on. Real Estate Attorneys

are not syndication attorneys,
and syndication attorneys are

not real estate attorneys. We
live where two completely

different hats, our mind
process, our thought process

about how to do everything is
entirely different. When I'm

focusing on a syndication
client, who's hired me to be

their lawyer, my job is to focus
on that syndication, making sure

it all works. I'm not thinking
about the real estate at all,

the way the real estate works is
kind of irrelevant to me, except

to the extent of what I need to
tell the investors about it to

protect my syndicator. My entire
job is to protect the syndicator

not anything else. If the real
estate attorney, on the other

hand, is not thinking about the
investors, they're thinking

about the property, they're
thinking about the owner, and

there may be thinking about the
tenants. But those are very

different things. Well, we I
when I think about tenants, I

just think about them as little
engines in the cash flow, and

the risks associated with that.
That's it. It's much more

important thought for for a real
estate attorney than it is for

me as a syndication attorney. So
hire somebody specifically, and

do not listen to non attorney
advice about how syndications

work. Now it's all well and good
to talk to somebody who's done a

lot of syndications and talk to
them about how they do it.

That's all very helpful. But
talk to a syndication attorney

who knows what they're doing,
who has experience, who's a

specialist in this field, when
you have questions or when it's

time to put that offering
together. Because the nuances in

this field are great. They're
really vast. And there are many

situations that will have come
up for the syndication attorney

that the somebody who just does
deals isn't going to know.

There's also going to be plenty
event nuances that happen to the

syndicator or obviously, who
don't know who will have more

nuances going on in the
syndication attorneys has

knowledge of which is why my
firm has both in me is as a

syndication attorney, I've seen
all that set up problems as an

active syndicator myself, I've
seen all this set of problems.

So I've seen all these things
and I've seen how they come

together and they come and how
they play out. But don't rely on

it. I've heard so many things
about well, you don't need to

put a PPM together because of
XYZ. You don't need to do this.

You don't need to spend any
money. The edge should cost this

much amount of money. Oh wait,
you can't ask for fees. You

can't do these different things.
I've heard the weirdest things.

Talk to a syndication attorney,
really, you're putting in a lot

of time and effort in this. And
ultimately, your investors are

paying the fees, ultimately,
anyway. So isn't it worth your

time to do? Well, I hope you
found this seven part series

useful for you. At the end of
the day, all I want to do is

make sure that you stay out of
trouble, make sure that you're

in compliance, because
ultimately, as a syndicator,

myself, the more that the higher
the bar is set for all of us

indicators, the more more
ethical we act, the more in

compliance we act, the better it
is for the whole investing

public, and they're more apt to
invest in our investments

anyway, which is good for
everyone. So I hope you found

this helpful. If you'd like to
talk to me about being your

syndication attorney, I'd be
happy to speak with you. Please

give us a call. We can talk
about your Regulation D rule 506

B rule 506 C offering