When Chris started as a passive investor over a decade ago, he wished he had someone to walk him through the legal side of a deal. In this episode he brings on that person. Kim Lisa Taylor is a corporate securities attorney who has spent her career writing the documents behind private offerings. She breaks down what a syndication is in the eyes of the SEC, what the rules require of the sponsor, and how a passive investor can tell whether a deal is being done right.
Kim has written two Amazon bestselling books on how to raise capital legally, and hosts the Raise Capital Legally podcast and YouTube channel. She speaks often at live and virtual real estate, business, and capital raising events.
What you’ll learn
- What makes a real estate deal a security, including the four-prong “investment contract” test and why promissory notes count
- Why a “joint venture” with 100 investors is a red flag
- The difference between Rule 506(b) and Rule 506(c) offerings, who can invest in each, and why only 506(c) can be advertised
- Why, according to the SEC filing counts Kim cites, most private offerings are still filed as 506(b)
- Why you should worry if a sponsor never asks about your finances or investing background
- The loan terms Kim says to look at hard: loan-to-value, the maturity date, and whether the rate is adjustable
- How to work through a 150-page offering document, including Chris’s tip for using AI to build your list of questions for the sponsor
- Why Kim cautions passive investors about fund of funds deals, and the investment adviser licensing rule many of them overlook
Resources mentioned:
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- Kim’s free books (a beginner’s guide and a more in-depth guide) at https://syndicationattorneys.com/free-ebook. Both are
also on Amazon under Kim Lisa Taylor - The Raise Capital Legally podcast and YouTube channel
- Kim’s firm also offers a paid review of an offering’s documents for passive investors
- Kim’s free books (a beginner’s guide and a more in-depth guide) at https://syndicationattorneys.com/free-ebook. Both are
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Christopher Larsen is the founder and Managing Partner of Next-Level Income. Since “retiring” after 18 years in the medical device industry he dedicates his time to helping others become financially independent through education and investment opportunities. Chris has been investing in and managing real estate for over 20 years.
While completing his degree in Biomechanical Engineering and M.B.A. in Finance at Virginia Tech, he bought his first single-family rental at age 21. Chris expanded into development, private-lending, buying distressed debt as well as commercial office, and ultimately syndicating multifamily properties. He began syndicating deals in 2016 and has been actively involved in over $500M of real estate acquisitions.
In addition to real estate, Chris has invested in equities, oil & gas, and small business lending, as well as being active in Venture South, one of the nation’s Top 10 Angel Investing groups. Chris lives with his wife and two boys (and Viszla, Lucy!) in Asheville, NC where he loves spending time with them in the outdoors and enjoying the food and culture that the region has to offer.
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