Breaking Down the Nuances of the Fund of Funds Model - E745 - CFC

<p dir="ltr">When I have a legal question about fund regulations, there is one person I have on speed dial…</p> <p dir="ltr">Mauricio Rauld is an expert attorney with over 24 years of experience practicing law and studying the details of real estate syndication.</p> <p dir="ltr">That’s why, today, I’ve brought Mauricio on the show to explain the trending strategy of the fund of fund model and the nuances of structuring a deal like this to raise capital for real estate. </p> <p dir="ltr">People have been trying to get around the #1 rule that you cannot raise capital for other people unless you are a broker-dealer…</p> <p dir="ltr">But if you are a co-GP, you don't have to get a broker-dealer license because you have an issuer exemption…</p> <p dir="ltr">Which brings us to the fund of funds model that allows you to create a fund and raise money then invest it in other people’s deals.</p> <p dir="ltr">The catch to raising capital with this model is that, when you invest in someone else’s deal, you are now investing in securities rather than real estate.</p> <p dir="ltr">This opens you up to scrutiny from the SEC and whether you are now considered an investment advisor to your clients.</p> <p dir="ltr">You have to check your specific state regulations and apply for an issuer exemption in hopes that your assets under management and qualified clients fit the standard.</p> <p dir="ltr">There are many stipulations to follow, which is why having a good relationship with your attorney is crucial.</p> <p dir="ltr">And if you are thinking that becoming a broker-dealer seems easier at this point, just remember that almost all of them aren't at the institutional level and familiar with the nuances of securities.</p> <p dir="ltr">So, tune in today to learn how you can implement the fund of funds model in your company and avoid the pitfalls of working with securities to raise capital! </p> <p dir="ltr">Take control, </p> <p dir="ltr">Hunter Thompson</p> <p dir="ltr">Resources mentioned in the episode:</p> <p dir="ltr"><a href= "