All right. Thanks for joining us today. It is one o'clock in
Raleigh where I am right now. And thanks for joining us. I've
got a bunch of people in which is terrific. So we're going to
go through some questions that that you have, we're going to
feel free to use the q&a portion that you'll see in zoom, and we
will answer what is coming in as we go. And just let me know,
I've scheduled about 45 minutes for this call. So hopefully,
we'll, we'll hit that we may run slightly over
there. We'll go from there. Sue.
First question that we have, is there any support? Such as legal
review of the acquired property, legal entity maintenance after
finished drafting of the document? That's good question.
The answer is no. So what we do at Moschetti Law Group is we're
primarily concerned with your security itself. So we're
concerned with how you deal with investors, how you present
yourself, making sure you're protected by the SEC. My license
covers national things such as securities licenses, like
securities, but it doesn't necessarily go to different
states. So I'm licensed in California, I'm licensed in
Washington, DC, if you are outside of there, I can't offer
you specific legal advice as it relates to whatever state it is,
if there was a legal issue about that acquired property, for
example, title, I'm not going to be able to give you the legal
advice to it many times for my clients, I can give them kind of
my opinion as a, as a real estate professional or as a
syndicator. But it's not legal advice, and I will probably
still refer you to an attorney. If you have a specific legal
issue. I hope that answers that question there.
Another question, what LLCs? Do I need to start my syndication?
It's probably one of the top three most common questions I
get so happy to answer that for you. Let's go to I have a
whiteboard here that makes that a little bit easier to explain.
So there's two different LLC typically that we form, it's a
service that we also offer, when you sign up for a package, we,
we generally do the formations it's fine if you already have
them set up, but we'll also do them for you if you don't.
So there's two entities here.
This is
building so I'd say it's a property
So, generally, there are is two entities we form
oops, I made that totally ugly.
Those are little like seals on a thing. So this is what I call
the sponsor entity.
And this is what I call the
boss My sheep this is what I call the investment entity
and so, the title is owned by that investment entity, it is
this investment entity is managed
by the by the sponsor entity.
And then your investors.
They all invest into that investment entity. So there's
typically two
two different entities. Now in cases where there is a several
different properties
will normally set up SPVs or special purpose entities
for each of those, which is then managed by the investment
entity. So that answers that question.
Another question is how do I handle timing differences for
different investors in a given fund when calculating returns?
Great question. Also same issue with timing different projects.
Investments in the same fund. Okay, George, good question. So,
this is God talking about two different
I think so there's two different kinds of funds in the world or
two different kinds of syndications. There's open ended
funds, and there's closed ended funds. So about maybe 60 70% of
our clients do closed ended funds. And that's you've got a
single asset, or a single group of assets, you have investors
come over a limited time period. So you're raising money for
three months, six months, whatever it is, they all go in
together, and they all come out together, that's called a closed
ended fund. The difference is an open ended funding George, you
probably know this, but I'm giving background just for the
other people as well.
So in a closed ended fund, that what that does is it is open in
time. So you may have investors coming in in month one, you may
have them coming in, in month nine, you may even have them
coming in like the year later. So what Giorgio is asking about
is this challenge here, where you've got
erase everything.
Where if we look at it on a timeline
and this, let's say q1,
q2,
q3, q4,
et cetera, where you have an investor coming in here, and
you've got for, say, 100k. And you've got an investor coming in
here, for 100k. So the challenge comes up, because this 100k Here
is more valuable to you, at this point, than it is at this point,
right? It's time value of money, they're coming in at different
points. And if you're saying at the end, we're going to be
paying you a return of 40%, or 30%, or whatever it is, this guy
here, this, this guy who came in before the end of a for q1
happen, he's getting disadvantaged, so he is being
he's not getting the full benefit, because he would much
rather wait till q4 In order to put his money in. So there's
really one main way to deal with it. And then there's a couple
kind of variations to deal with it. The main way is by
calculating the net asset value at these different points in
time. So you count the net asset value here, you calculate the
net asset value here.
And you go, and what that essentially does is you'd say,
okay, the whole value of the entire portfolio, let's say is 5
million here. And then in q2, now, maybe it's five whoops, 5.2
million. And now maybe in q3, maybe something slightly
happened, where it's now 5.1. But then it jumps up to 5.5
million.
And then you divide out this amount by the total amount of
membership units that there are. And so basically, what you're
coming up is the cost per membership unit. So you're
selling those membership units to this investor, for 100k, for
100k. And then each quarter, you're doing a reassessment of
what that net asset value is. Now in the example of
what what you don't want to have happen is basically to be saying
that this person is getting diluted at the same time. And
that's how, why we do it this way. Because we also don't want
to be just adding shares, or membership units here in here in
order to make up the difference, because that just dilutes that,
that person. So that's kind of the main way we deal with it.
The second way to deal with it, is by doing an accounting.
So what we can do, where we get basically can get rid of the
idea of net asset value.
And come up with accounts for each one of your investors and
build a ledger for each one of them. So let's say I have
investor one who comes in here. And let's say this is investor
17. Just for sake of argument, I'm doing deals and this is
really for a portfolio not for a single, single asset.
So I know that here I've got these properties here. And I
allocate as evenly as I can at the time of the person
Investing, or at the time of acquisition, I'm allocating
percentage of ownership of each one of those.
Each one of those assets, almost like its own little mini fund,
it's a little account that you're keeping track of. And
then as those get disposed of, it gets the roll off. This is
probably the harder way to keep track of it in a lot of senses,
especially if there's a lot of transactions coming in, or if
there's, but it's probably the only way to do it if you've got
large gaps of time of when between acquisitions and
dispositions and when your investors are trickling in. So
kind of a complicated question. That's how it's dealt with, most
almost always is one of those two ways. But you know, like I
said, we can go through and come up with some other ideas about
whatever meets your particular need as well.
Sure, Tom, we can talk about, we can talk about fees, my fees and
finance, we charge flat fees, we're very competitive about
what we charge. So we charge for a closed ended fund, we charged
$15,000 as a flat fee.
And for a open ended fund, we charge $25,000 as a flat feet.
Now, that's only for the first deal. Once you become one of my
clients, we give a guarantee that for the next three years,
it's going to be discounted by 50%. So that if you're doing
closed ended funds, which most people are, those get discounted
to $7,500. That's just the fees. So everybody's paying those
fees. The I do not finance or do monthly payment plans. It's it's
a one time upfront charge. Because our time to produce
these is really, you know, is really quick, I devote a lot of
time to it. And then we get we get you the paperwork out. So
you're generally getting getting the paperwork in two weeks. So
financing, it just generally doesn't work.
Is there software that I use to keep track of individual
accounts or Ledger's? Yes.
I personally use that folio. App folio is a good is a good
solution. I recommend it, I get a I have a discount code with
them. When they pay that affiliate fee. I pass that
directly on to my whoever, whoever got it. So I don't keep
any of that affiliate money myself. And they winds up being
about 10% of the cost. I think the costs and I know I do not
keep track of what their costs are. I think it winds up being
about $600 a month though, because it is a very kind of
industrial grade solution. There are other projects out there. I
know that some people are using a product called groundbreaker.
I haven't used them myself, and but you could check them out.
And so maybe they're they're very good. I have no idea.
Right?
All right, can I get my friends to invest in my reg D if I am
advertising? Let's start kind of at the from a bigger picture, it
might make a little more sense.
Just you to do
oops,
what to delete? There we go.
And go back to the whiteboard. All right.
So can I read the question? Okay. So two types of syndicate
syndication generally under 506 under reg D 506, B and 506 seed,
there is also 504 But it is it is hardly ever used now it's
overly complicated, and so nearly no one is using it. So
506 B is
C
and we'll go through we'll answer the question minute but I
just want to outline what those those differences are.
There so 506 B is yes, you can have non accredited investors
there's up to 35 per 90 days
506 C, you can have you can advertise
you can make a general solicitation.
And so with 506 B though no advertising
and with 506 C no non accredited investors. So to answer your
question, what were the problem is, is if you're doing a 506 B,
you're not allowed to advertise it really at all. And you said
that you needed to advertise? So the short answer is probably not
as long as those friends and family are non accredited
investors, if they, so how do you do a 506 B, and,
and basically be able to get people into your fund and find
investors, there's a few ways what the SEC is main concern is
between 506 B and 506. C, and why they have this rule setup is
they don't want people just going out and making general
solicitations to the entire world of hey, come into this
fund, and basically taking is of people taking advantage of it.
So people coming up with some very large mechanisms to, you
know, make, you're gonna make a billion dollars, if you invest
$5 into this fun, and we're gonna make all this money and
basically, the syndicator walking away with it, none of
you are obviously going to be doing that. But that's what the
SEC is concern is. And so they use this toggle point between
accredited investors versus advertising as their mechanism
to regulate that. So non accredited investors are not
necessarily less sophisticated, but they have less means to be
able to adapt a very bad thing happening where somebody walks
away with all the invested money.
So
the turning point, really, and it's just read it, this is my
interpretation, reading between the lines of what the code says
is that it comes down to trust.
They want the investor to be able to have some relationship,
some sort of, like trust that's based in something real with the
syndicator. And so what what needs to happen is dialogue and
communication that is outside of what the investment is needs to
take place first. So what used to happen in the very early
days, as syndicators would put together a seminar, they'd get
everybody packed into a room, they talk about the investment,
and they get a list of things and they'd start talking about
what their investment was immediately and saying, Okay,
come invest, come invest, come invest in this. It's great, it's
great, it's great. And there was a lot of the the there was
concerned that there was a lot of pressure that was being put
on to investors by syndicators in order to invest.
And so what they have done by doing this is they've actually
specifically said in the code, you can't do that. What you can
do, and what this code does, does not prohibit is putting
together the same seminar, he put together a seminar of how to
invest in real estate, you never talk about your investment at
all. And then you basically invite people to say, hey, if
you'd like to talk some more about real estate and talk with
me one on one, love to do it, let's set up a coffee or, or
whatever to do that. So that's really kind of the main
mechanism that people are doing in order to build their investor
base is by still setting up seminars or webinars or things
like that, inviting people into those communications in those
dialogues, and then going from there to build that trust and
then doing a 506 B.
I hope that answers that question.
Next question. What services do I provide in setting up a closed
end fund? Good question. So we are basically your back office,
your your support team to get that fund set up. So what we do
is we put together the PPM the operating agreement,
subscription agreement, investor questionnaires, and then put a
package those all together so that it meets what investors
would be expecting to see from them. We can do reviews of your
marketing material. We don't do the marketing material
ourselves, but we do do reviews. And then you can put it out
there into the marketplace. Once you've put that all together. We
look at what the offering is. And then we put together the
form d which is what gets filed with the SEC
And then we get put together with the blue sky filings. Now,
a lot of my competitors do exactly that same thing in terms
of the actual, like, we put this documents together, what I think
sets us apart and my firm is I'm an active syndicator. Myself,
I'm putting together my own deals. And so what, what we try
and do to the the difference that we make is, I take that
expertise, and I'm available to you in order to make sure that
ultimately you're successful. I mean, the reason that we cut our
rate once you're a client of ours is because our whole goal
here is to have you be successful. So you keep hiring
me over and over and over. That's my goal. So generally,
once you're one of my clients, I'm available to you, we set up
meetings, I see some of my clients are on this call. And so
they can probably attest to it as well, that I really do try to
make myself as available as possible. Probably the easiest
way is to set up a meeting with me, I try and make it so that I
can meet with people as quickly as possible. And then we can we
can discuss whatever it is, if it's about your syndication
specifically, we can talk about that. Or if it's a question
about, you know, an issue that you're having, I'm happy to have
those conversations as well.
So that that's what we provide, in order to set up a closed end.
Another question, is that okay to have both a 506 b and a 506.
C for the LLC. Great question. I do get that a lot, too. The
answer is no. So you choose one and then the and then sometimes
you can go to the other. So generally, you could if you need
to do raise, do a raise from friends and family. And to
advertise, what you can do is you can put together a 506 b
offering, offer that to friends and family. And then once that's
closed, then you can put together a 506 C, and then
advertise that specifically, they need to be two separate
different offerings, though.
So we have we have a fair number of people that do that, probably
not nowhere near a majority, but some people definitely do that.
And, and it works, it works fine, what you cannot do is do a
506 C offering, where you're advertising it to the world and
then do a 506 b offering just to pull in those people because at
that point, they've pretty much seen the offer that's there. And
that may be out there in the marketplace that you've
advertised. So what we don't want to ever have happen would
be a complaint gets filed. The SEC is called in to investigate,
the investor says, Well, I had no idea who these people were, I
saw an ad on TV, I gave them money, and I'm definitely not an
accredited investor. That's what we're trying to prevent. By
making sure that it doesn't go C then B. But if it goes B then C,
you know, that's fine. You've brought in all the friends and
family that you know, and then close that off and then do the
do a 506 C offer.
Right?
So how do I let friends and family know if I'm doing a 506?
B and can't advertise? Great question. The the you can't
advertise in terms of a general solicitation under 506 B. But
you can't let certainly let friends and family know I think
you probably could even post on Facebook or on whatever your
social media is,
hey, here's what I'm working on. And you could bring people in
that way. But you'd have if you decide to do that, you just
wouldn't be very diligent that the only people that you're
letting into that investment are people you actually know. So I
wouldn't go like trying to test the gray area when you're
putting together seminars and getting to know them for a week
and then talking to them about the investment and do that
mechanism. But otherwise, you could certainly say put it out
there to the world, hey, I'm doing this. You know, if you're
one of my buddies, give me a call. And that should be okay
because it's not then a general solicitation where anybody can
come in.
Who is an accredited investor, an accredited investor as
defined in rule 501. What it basically says is there's two
tests, there's an income test or there is a a net
net wealth test. You do not need to pass both of them in order to
be considered an accredited investor you only need to be
I passed one of them. For the net income test it needs to be
if it's a person applying on their own. So without their
spouse that they need to have $200,000 a year in income for
the past two years and expectation of get that for the
third year. And for the net wealth test, it needs to be net
wealth of, Oh, I'm sorry. And for the income test, if it's
with a spouse, it's $300,000.
Or,
plus $300,000. A year for the last two years with the
expectation of the current year being $300,000 a year, the
wealth test is for a net wealth of $1 million. And that's not
counting any positive equity for fant primary residence. So if a
house is underwater, that does bring down that personal net
worth. But if your house is worth worth a million, and you
owe, you know, $5 on it, you don't get to count that
additional income as that primary that that big spread
that $995,000. So you don't need to get to count that as your as
your wealth that needs to be separate from that primary.
Key.
Can we do a 1031? Exchange? Common question the answers?
The simple answer is no.
The we'll have a backup this simple. If you mean to, can we
do a can people 1031 Exchange into a property into your
property and give you the the money from there? The answer is
probably no, that money itself would be counted as boot and
they're going to be paying their taxes on it. Outside of that
1031 Exchange. If they want to pay taxes on it, then absolutely
they can. But it is counted as boot. And he can't come in.
The only exception to that. And I'm hesitant to say it is in the
case of a Delaware statutory Trust, which is a very
competent, complicated mechanism.
And it's so technically they you can set up a fund in order to
raise money with 1031 money. But it can only be in the in the
specific shell of a Delaware statutory Trust, which are very,
very complicated, expensive and very challenging to put
together.
In You 1031 out probably now here it gets kind of state
specific, because a lot of times what happens is the IRS under
the IRS rules. It's 98% Not a problem.
Under local state rules, it depends. So in California, for
example, if you were to try and do a 1031 exchange out of a
property that's being syndicated, and one of your
investors doesn't want to go along, but everybody else does.
The Franchise Tax Board and California will come after you
and disallow it and they don't have any problems filing a
lawsuit against you, no matter what, despite whatever the IRS
rulings are, they want their money immediately. So they will
disallow it. I've heard New York is also equally challenging. I'm
not keeping track of which states like it and which don't.
Now, if everybody wants to 1031 Exchange, that's not going to be
a problem. So you certainly can turn 31 out, as long as every
investor doesn't have a problem with it. Or if your fund is just
set up automatically to do that, then it will be okay. But
everybody has to come along, you can't spread out split out
fractional shares in some states. So I'd be very careful
about that.
We have some clients who are doing it very successfully. But
they're also not letting in people from New York or
California in order to be able to do it without a problem.
Which is easier an open ended fund or a closed ended fund.
So and
well, it depends what you mean by easier, so easier in terms of
raising capital. I think most of the time, it is much easier to
raise money for a closed ended fund. In my experience, most
investors like to have concrete start dates. An expectation of
this money is going to be held and doing whatever it's doing
for five years, seven years, three years, whatever that time
period is and they kind of know what that is going in.
So raising money
My experience is closed ended as much easier open ended is more
vague. And the more vague it is, the more challenging it is.
The what's easier about open ended funds is open ended funds
are easier in terms of strategic decisions. If you've got a pool
of money and you're able to place it an open ended fund,
you're able to do that. You just need to make sure you're
complying with whatever rules are in your operating agreement
that are set up. So the specific plan of an open ended fund can
be easier. But a closed ended fund is much easier to get
investors for and much easier to maintain. Because we're not
dealing with like what we answered before about funds
where we're have to having to keep track of either separate
Ledger's or keep track of
of net asset value along the way that gets gets overly
complicated.
How, what's up above?
does? Does documentation for five accepting investments from
self directed IRAs?
Yeah, basically, almost every syndicator does allow accepting
funds from self directed IRAs, to backup just so everybody
knows a self directed IRA is basically it's an IRA, where the
administrator of that IRA allows the LAOs the person with that
account the account holder to basically dictate where their
funds are going to go. And that can be into a syndication. So
there's quite a few companies that are self directed IRA
companies, probably the biggest is and trust en TR ust, but
they're by far not the only ones, I've dealt with probably
about six different ones.
And they're generally pretty easy. So it I haven't had a
situation where I've had a, an administrator of a self directed
IRA, ask for any changes to a, to a ppm or to an operating
agreement, their main concern in order because they want to stay
compliant for the benefit of the IRA holder, is that the IRA
holder doesn't have access to touch the money themselves. So
it's, it's nearly impossible to set up a self directed IRA,
where the syndicator themselves gets to go into the investment.
But it's almost always the case that, that you can generally
have investors who have self directed IRAs. And you should
and that's a great talking point to, to finding investors to
having those conversations, because now they can put their
IRA money as to use in your syndications as well, it's a
good thing to talk about. And the only administrative thing
that that burden that it adds to you is two things is first, you
have to submit it to the administrator for their review
before you can get the money. And the second thing is every
year, the administrator is going to ask what really they're going
to ask the IRA holder, who then will ask you is they want to get
a general assessment of what the current value of that IRA is, or
what that acid is in their IRA, for reporting purposes, they
need it. So they will ask for it. But it's really it's not
that big of a deal. You know, I basically have a template for
it.
If ever you're working on one and you're a client of mine, you
just tell me that, you know, how does this work? And I'll send
you over what my template is, and you can fill it out and it's
it's pretty simple.
Let's get a quick drink.
All right.
Another question. We have some situations where after signing
the ppm or wanting to provide a discount on our fee and
commissions,
what tax formality or documentation do we need to
have? Okay, yeah, you you absolutely can do that.
This is where most of the time we'll talk about side letters.
So, and we'll talk we talked about side letters and our PPM
and I think we talked about a little bit in the operating
agreement, just that these things exist. What a side letter
basically is, is it's an agreement outside of what your
normal investors get. So it's, let's do a diagram. Easier.
Oops.
Same thing.
So you've got your agreement
with your investors, right? So investor, investor. And then
you've got this guy here,
who's also an investor. And you want to give him a little bit
better deal, say, you've got it on that, that this investment is
paying, and I'm making stuff up here, it's paying an 8%
preferred return, and then a 7030 split.
So 70%, to the investor and a 30%, to the manager, this guy is
coming in with a lot of money, this guy here.
And you really want him as an investor, and you want to incent
him in order to finish off your investment and bring him in.
So what you want to offer him is an 8%. Breath
and an 8020 split.
So that is no problem at all. What you'd basically do is have
him sign the fee agreement, and then do this separate side
letter
just for him, that says, okay, and for you, we're going to do
an ad 20.
So that's one way to do it.
What the caution is that, that we're looking at whenever we're
doing side letters, is I don't want there to be a situation
where,
where instead of this 8% pref,
you are suddenly doing a 12% prep, and you've told your
investors that word that this is an 8% Prep. Now why is that the
case, because all these are getting the 8%,
the 8%.
And then after that are getting that 7030 split. So after all
that money's paid out, then they're getting a 7030 split
well, that 8%
is driving down the amount of available
cash for distribution.
Right, because they're getting that right off the top. So now
if I'm giving somebody this 12% right off the top, that striping
them more than the investors are expecting, and so you're
diluting them without telling them and so that's that's a big
nono.
So I don't want whenever we're talking about,
about those, that's what I'm on the lookout for is dilutions
that are unintended. In terms of fees, what you can do is,
because I think that was your question
is Can you can you give them some fees? The answer is, yeah,
you can give them some fees. And sometimes we'll do those,
especially in the case of like a kicker for a guarantor on a
loan. Like if somebody is investing a large amount on
there, you'll give them maybe 1% of the of the amount financed
just for the act of signing on the loan. That's okay to do.
In terms of, of what there is now, in terms of tax formality,
but so though, the documentation is simple, it's a side letter,
it's the agreement between the fund and the investor. That's
the documentation you need. For a as it relates to taxes, what
will happen is you'll need to just basically explain what it
is what the situation is to your tax preparer, your CPA, when
they're preparing the K ones to make sure that they get
notified. Now, if they're getting paid a portion of fees.
That's basically BS coming from the manager is how you would
want to structure it, not from the fund itself. So it's the
manager paying the fees. So a fee gets paid to the investor to
the manager, and the manager then kicks that back to the fee.
So let's just
just make sure it's real clear because could be a problem
otherwise.
So
here's your inbox.
stir. So it's paying regular distributions. And this is the
investment.
Hopefully you all can see my handwriting, I think it makes it
helpful to see it this way though.
So you have the sponsor LLC, getting paid fees,
and then the sponsor LLC paying some subset of fees.
So it's going to reduce the amount of taxes that the sponsor
LLC pays. And then the what this investor is going to basically
get a k one.
They'll get a k one on that distribution, and they'll get a
1099 on the subset of B's.
So from a tax perspective, that's the that's what would
happen.
In a real estate fund, could an investor invest funds into a
property's equity through a no between the fund LLC and the
sponsor?
Sorry, let me switch. Could an investor invest funds into this
property's equity?
Through a no? Yes, you could.
Yeah, you could do that. You just would want to, again, make
sure that the investors are still getting what, what they're
expecting, who are not a party to that specific investor? And
then document that that investment through the note. So
you would document the No,
don't? Yes, is the short answer.
There is no difference in the document preparation, if the
syndication invest in residential or commercial
property.
Not a substantial difference in me know, in your private
placement memorandum, there's there's documentation about
different risk levels, there's documentation about what your
overall strategy is. So those things are going to be
different. In what those docket what all of those syndication
documents look like, but the state of those documents or you
know, there's, there's not anything that's
substantially different, like, oh, well, if it's residential
property, you need to put all of this stuff, except for risks or
whatever is going on with that particular investment.
Is there any minimum or maximum amount of money that can be
raised? No. So under Regulation D, you could raise $1, you could
raise $20 trillion?
You'll, you know, if you can, if you can raise $20 trillion, I've
got a job for you.
If you
but there is there are no maximums, under Regulation D and
no minimums, either. It's probably not economically viable
to to do a minimum raise to do a raise, typically. I mean, when I
was coaching people, when people would ask what the minimum would
be, that I would look at, I probably would say a minimum of
a million dollars of equity raised, it's
the amount of money that you're making at less than a million
dollars is probably lower than would make it make sense for the
amount of work that you do as a syndicator.
Alright, so we got just one question left, how does form D
work?
Form D is basically the notification to the SEC. So
Regulation D has, is basically an exception to the general
security rule that all securities must be registered.
That's the key word is registered with the SEC. As an
exception to it, it doesn't need to be registered, but it does
need to be some documentation needs to be filed. And that's
through the form d.
What the rule is, is generally the the SEC once the once that
form D filed within 15 days of the first sale of of the
security, but it further defines that the sale the first day of
the sale of the security is the date, basically at which point
the investor isn't going to get their money back.
So if you get it up
You know, you've raised all this money, you get it to the finish
line, it's just not going to happen, that property is not
going to transact, you give them their money back, no form deeds
owed. It's just not a relevant piece of paper anymore to being
filed. You still could file it if you want. But you know, they
you've already given the money back. So you don't have a filing
date, really until, until there's no time to get it back.
Now, if you miss that time period, it's very far from the
end of the world. The SEC does not have a penalty. There's no
fee and filing the form d, there's no penalty associated
with the SEC on late files. Occasionally, some of the blue
sky states have a late fee filing. But they also don't have
I don't know of any state that has a a, you know, a prohibition
of, you know, you won't get this protection under form D because
are under reg D because that would be outside of their
jurisdiction anyway.
Because as a matter, the federal rule wins. Regulation D says,
Well, yeah, you need to file it within 15 days. Probably you
need to have it filed to be protected by Regulation D in
case of a lawsuit. But there's never been an opinion. There's
been one opinion letter that opined that it was possible.
But in that one particular opinion letter, it said in this
case, it doesn't. It doesn't change the standing that
Regulation D still applies, even though the form d wasn't filed.
So that is the answer to that question. Okay. So we hit the
amount of time that we've got allocated for this. So I hope
that was helpful. Again, if you're ready to move forward on
putting a syndication together, if you've identified properties,
or you're ready to get started right away, give us a call and
we will get you going we'll get set up a time to talk. But
otherwise, feel free to you know, we'll be putting these
webinars together fairly regularly or I'm sure you're
getting our email blasts, and I hope you find those useful. Feel
free to check in as if you're not a client. I will try to make
time to answer answer the questions. If you are a client.
I will definitely find time to answer any questions. So I hope
you found that helpful. Thanks and have a great day.