When you're designing an
investment fund or a

syndication, one very
fundamental idea is whether or

not your investors are going to
have a vote, whether or not they

get to vote on major decisions.
Now, this video, which is a

blast from the past, and I made
it for the very top real estate

brokers, real estate developers,
people who wanted to go from,

from being in a business to
doing syndications and

investment funds of their very
own, because I had people who

had were working for investment
funds, or REITs, who also were

part of the program. They what I
wanted to get instill in them.

And what this video is about is
how you deal with that question

of major decision making. Now if
your major decision making is

done, as part of you know, all
of your shareholders get to make

a vote this video spot on but
even if they don't get a vote,

even if you have complete
control and complete voting

authority, this is still
fundamental. Why because your

investors should have a voice,
whether or not they actually, as

a legal matter have a vote, you
should always make sure that

your investors have a voice in
it, I think it's a good idea to

on those very major decision
making things, have a vote, see

what it is, now it's possible
that you're not going to follow

it. And if you don't follow it,
that's fine. But just make sure

it's well reasoned and that your
investors understand. So

everything should be structured
in such a way that investors

have a voice. And that's what
this video is about.

We're talking about operations,
we're talking about

communications. And in this
video, we're talking about

voting. Voting is important. It
is spelled out in your operating

agreements. Sometimes there are
things that decisions need to be

made by the investors. And so
the first thing we need to do

when we're talking about voting
is determine

if a vote isn't needed.

Now, most of the time, the
property mate or the asset

manager, the syndicator, is
going to have the authority to

be able to make the decision for
the investment. Most of the

time. Now there are things that
sometimes I will choose to make

it a little more palatable to
investors to give more voting

control over to the investors,
things like choosing when to

sell is a perfect example, I
would almost always have that be

something that is avoidable by
an investor because they feel in

control of that investment. I
wouldn't let them have

necessarily the voting right to
choose one tenant over another

if it was a multi tenant
building. But there may be

things that you decide is in
your best interest to allow your

investors to vote on and may
help you make the decision. So

the things you need to know is
first if you need to do a vote

at all. And the second is, what

percentage of the vote you need.

Is this a majority? So 51%? Or
is it a super majority? 75%

Whatever it is, you need to know
what that vote is, and we're

gonna talk about that, where you
put that in just a minute, then

you need to also know what how

you quantify. votes,

I almost always would put it in
a pro rata voting situation

where the investor gets to vote
based on the percentage of the

app of the equity that they
have. There may be some

situations, however, where
you've decided to make it vote

on a per investor basis. So the
person who has 1 million

invested gets the same amount of
a vote as somebody who's

invested 1000. If that's the
decision you made, that's fine.

You just need we just need to
know that. So I'm going to walk

you through basically how I
would talk to an investor when

it's something that I think we
need to vote on. So it's calling

that vote. Now. First, read your
operating agreement and

Understand how voting takes
place, you're going to need some

of the data from there anyway.
But make sure you understand it

as best you can. So, in my
email, I would say, Dear lack, I

put that there mostly to make
sure that you understand this is

a NEMA. I would first thank them
for investing with you, man,

they're trusting you with a lot
of money, let's thank them.

Second is a summary about what
is going on. And here I'm

talking about a summary of the
whole property from the very

end, the very beginning. So we
purchased this property three

years ago, for such and such.
And, you know, it's been

performing well, just a nice
narrative to so that the

investor can understand the
backstory. Now, they probably do

understand it, but maybe they
own a lot of different things.

And it's very easy to get it
confused. And they would just

like it all in one place, do
them a favor, show up like a

professional and give them a
nice narrative, to show that

you're the trustworthy person
that they believed you were. So

and I talked about the in the
initial talk about progress. And

then I'd go right to the
situation that you were voting

on, is it time to do believe
it's time to sell whatever and

your basic idea about what it
is? Here, you want to support

whatever you want to do, but I
wouldn't necessarily be heavy

handed on it. So you want to be
somewhat convincing. But you

certainly don't want to be so
persuasive that people are being

forced to vote one way or
another. But you certainly have

a right to an opinion. And they
should understand that this is

your basic recommendation based
on your on your professional

knowledge. So the next section I
would talk about is the

financial impact, this is an
investment. So how is this going

to impact their bottom line is
viewer projecting out a IRR of

14%. And this is a, you know,
gonna make it so they have an

IRR of 15.2% Fantastic, let them
know, if you're projecting it

out that it's actually going to
be a 9%. But here's why I think

we need to do it anyway, because
of these risks. Well make sure

they understand what that
financial impact is. So that way

they can at the end of the day
know what it is. So, for

example, also, if I was going to
be describing recommending the

sale of the property, I would
identify what that financial

impact is, I would say, you
know, our list price would be

approximately

or less costs

for lead for brokerage fees, and
for escrows title etc, is going

to be that much. And then oh,
then I would probably say

projected sales costs because
it's probably going to be less

than then your your list price,
I would then put in what the you

know, the total amount of
equity.

And then I probably would have
been put, you know, the the

return per share.

So that's just an example if I
was talking about selling the

property, what I would put
something like that just so that

they understand as much of the
impact as possible, they can

make a good decision for
themselves how they want to

vote. Put numbers that are
favorable to you and numbers

that are not favorable to but
just put give them the full

picture your fiduciary give them
everything they deserve. And

then is your I would put down
here, your recommendation. So I

would allude to my
recommendation in the situation.

But I would put my
recommendation in its own

section so that they can clearly
see it is and here's your

opportunity to be more
persuasive. Do not be heavy

handed. But be reasonable. And
you know, you want these people

to stay investors with you.

And then call the vote.

And then here we're talking
about

what the question is right?

So the question is whether we
should put property of Blackacre

on the market for $4 million.
Now, within or within the next

three months hiring this
brokerage company, whatever it

is, whatever that question is,
we put it there and make it

clear. So they know exactly what
their work what they're voting

for, we don't want them any
ambiguity when it comes to this.

And then I think it is useful to
say, give the basis of why

they're voting. So I put subject
to

the operating agreement in
paragraph five, or whatever it

is,

then why you are voting in that
this isn't one of the decisions

that a manager gets to make.
This is one of the the ones that

investors get to make. So you're
calling them out.

And then what vote so. So in
something like in order to

approve

this vote requires.

Now if it's 51%, or more high,
whatever we're putting, we're

giving what that percentage is
that we talked about up here,

what that percentage of the vote
is, in order to in order so that

they know how close is it going
to be is it a super majority,

whatever it is, I would then put
in a line that's very clearly

marked that says a vote

in favor, and actually, we
probably put this in bold.

So that way, they can see what
they're exactly what they're

voting for very, very quickly.
Again, not hiding the ball, and

then

how to vote.

Else probably send you an email
or reply to this email with how

you wish to vote or something
like that. And then now you've

got a very nice email that's
calling for your vote. And then

lastly, as those votes come in,
you're starting to do a tally.

So I would do something like
here, you've got a list of all

of your investors

they on.

If they aren't a what that's
100% of the vote. And this is

assuming that they're voting pro
rata.

Then I would do vote in favor.

were opposed. I like to do this
and have this as a real

document, because then it's very
clear that I've done what I need

to do. I could also, I do think
that we want to keep this

private, but I could also put
investor, a investor B,

investor, C investor D. Just to
so that it's it's more private.

And then I would just mark you
know, this is in favor. They

were opposed, in favor in favor.
And then now you've got a new

tally. And so here you've got
75% of the vote in favor, 25%

opposed, and I've gotten nice
spreadsheet that just shows, you

know the vote. And it's very
clear on what it was. And

everything is documented. So
this is how we go through the

process and document to do our
votes. So whenever a decision

needs to be made that's subject
to voting, now you've done it in

a way that's very fair. It's
very clear. It's not heavy

handed, and it's reviewable. So
if there's ever a question of

whether you did your right, did
your job properly, you've got it

done. And now you're showing up
like a true professional, which

also is going to build the trust
with your investors. Even if

they don't get the way they
voted. Giving investors a voice

absolutely critical. If you're
going to be successful, happy

investors mean that you are
going to be a happy syndicator

investment fund manager
business. That's that's what

this video is really about, not
just the formalities of taking a

vote and how you do it, but just
making sure that they have a

voice and how what that process
looks like. Now this video was

put together specifically for
real estate professionals. But

if you're not a real estate
professional, if you were doing

an investment fund or you're
doing a syndication of some

other sort, or you're a business
raising capital, it still

matters. You still have
investors. So if I can help you,

my name is Tilden Moschetti. I
am a syndication attorney for

the Moschetti syndication Law
Group. If I can help you put

together your own syndication
Investment Fund, do the things

that are necessary to raise
capital for your business.

Whatever it is, I can help you
stay in compliance also help you

keep happy investors