Q: What compliance/regulations do I need to be aware of when taking investments from potentially non accredited investors?
I have a real estate investment company that focuses primarily on wholesaling. I come across the best off-market deals and want to begin flipping houses using investor money. What compliance/regulations do I need to be aware of when taking investments from potentially non accredited investors for purchasing real estate? Is there any change to my duties as a company owner when offering investors a return based on transactional basis (deal-by-deal) vs longer term, 12+ month basis at a fixed APY return?
A:
What you are asking is a very complicated question. If you are acting as a fiduciary for investors you will need a license to do so in Texas. The way around that is to have investors become partners with you on a deay by deal basis. You would need to carefully set-up a different company for each deal. Usually a small S corporation, LLC, or other partnership. In that type of setting you can have multiple partners or shareholders, with you or your company as a majority or super-majority stakeholder.
Please do not attempt to do it yourself as it is complicated. If you do it yourself, at least visit or have your proposed company or partnership, reviewed by an experienced attorney.
Good luck!
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