Real Estate Funds and Private Placements
 | Property Investor News: I'm here with Nick Jevic, the founder and who owns RealEstateCapitalPro.com, a website dedicated to helping property deal sponsors save money when raising private capital.
Nick Jevic First question - Exactly what do the truth is as one of the main challenges the real deal estate investment sponsor today? Nick Jevic: What I have found is the fact that many property sponsors can find real estate opportunities, the way to benefit from it, as well as the knowhow to bring everything to fruition. But what they don’t have, or at least don’t have enough of, is capital. real estate fund In some sectors and deal sizes, the periods are still dark and gloomy legitimate estate, but smart property sponsors still find exceptional possibilities to make money in this market. Whether it's buying underperforming debt secured by real-estate, buying into a busted development, acquiring foreclosures or tax lien auctions - they have the deals and the know-how to make money together. And that’s what investors are searching for - someone who could make money on their behalf. Nick Jevic REIN: So how does that leave real-estate professionals today? NJ: If the above description describes you, then raising capital is probably fairly on top of your "gotta do" list. Whenever a sponsor is out raising money to get a real estate deal and a fund, one of the first things they’ll should get is a personal placement memorandum, or even a PPM. It may seem a PPM is something for that corporate guys wanting to raise equity to get a business. But whenever you're raising money from investors - issuing securities (think issuing a burglar alarm in substitution for money), your activities belong to state and federal securities laws. And specifically, since you're doing a private transaction you're issuing what is known “unregistered securities,” which falls under Reg-D of the Securities Act of 1933. REIN: If I'm putting together a genuine estate deal, fund, or syndicate, how come I want a PPM? NJ: So, not only it is possible to legal requirement to adhere to both state and federal securities laws, but using a PPM you may provide yourself with cover from securities fraud claims. Having a defining document for your transaction, there shouldn't be questions about exactly what the deal is. Furthermore, your prospective investors, if they are active in private investments, will expect to find out a PPM. REIN: What's inside it for the investors? NJ: The PPM is a document that gives your prospective investors with all of the information they need to create a sensible decision about if they should invest in your transaction or otherwise not. With a view from 30,000 feet, the PPM will include legal legends for your advantage of the investor, a phrase sheet that spells out the economics and legal provisions of the transaction, as well as the perils associated with the transaction. REIN: May be the PPM expensive? NJ: The task for almost any deal sponsor is always that a PPM can be quite expensive. To have a consultant or attorney draft an exclusive Placement Memorandum, you can expect to pay up to $30,000. And understand that it is really an upfront expense that will get paid whether you successfully get the money raised or not. Busted deal expenses may be painful. Fortunately, there's a more effective and cost effective way to get your PPM drafted. Having a Private Placement Memorandum Template from RealEstatecapitalPro.com, it is possible to draft your individual placement memorandum, then have your attorney evaluate it, that is clearly a far more efficient utilization of your legal resources. So keep finding those real estate opportunities and remain compliant when raising capital simply by using a Private Placement Memorandum. Remember, it’s not merely for corporate transactions. REIN: Thanks Nick Nick Jevic has over Thirty years of experience in banking, corporate finance, and capital markets. Through RealEstateCapitalPro.com he helps real estate sponsors navigate Reg D and also the technique of finding a private placement completed without having to spend thousands of dollars. |
