How To Stay SEC Compliant When Getting Private Money

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In the end, the SEC wants a few things and has one single mission.

The SEC Mission (in my words… not theirs): To protect the end consumer/investor from fraud, deceit, and dishonest investment practices .

In a moment, I’m going to share a few tips to help you stay SEC compliant when getting private money… BUT, this is not to be taken as legal advice and is no substitute for legal advice.

Treat your real estate investing business like a true *business* and get your legal bases covered… have an attorney on your team advise you based on your specific business model and the area you’re doing business.

Also, keep in mind that the SEC is nothing to be scared of… some real estate investors use the SEC as an “excuse” for not getting private money… and there’s no need for that.

Simply get educated and get good legal advice.

3 SEC Compliance Tips | Private Money

1) Only present investment opportunities to people who you have a relationship with (i.e. – get to know your prospects before you start offering your private lending opportunities).

This makes complete sense and truthfully… is in your best interest to do so anyway.

A private lender is essentially “going into business” with you on a particular deal. You want to make sure you get to know them, and vice versa before they put up their hard earned money with you and your company.

2) Be honest and upfront with the way you represent yourself, your company, and your investments… and fully disclose all risks and details of what your private lenders will be investing in.

This boils down to basic…

“Do unto others as you’d like others to do unto you”.

Some people feel like they need to hide certain bits of information from their private lenders about the risks of a deal.


Your lenders will appreciate you for being upfront and the SEC requires that you fully disclose any risks of the investment, what you’re going to do with the funds, and the details of the investment.

3) Protect the investor (your private lender) at all costs… including that the investor has the financial means to invest their funds in these types of “non-traditional” investments.

So for example…

… don’t bring in a private lender who makes $30,000 and is investing their last $20,000 with you.

Make sense?

Alrighty, that does it for today…

If you’re interested in additional educational training & tools to help you stay 100% SEC compliant, click below…

>>SEC Attorney Interview & Private Money Disclosure Docs <<

If you have any comments or questions, toss ’em in the comment area.

Happy Investing!

– Patrick

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