Press Release Summary = In his blog for new investors, noted real estate investor Alan Cowgill warns that its vitally important to follow state and federal regulations when pooling funds from more than one private lender.
Press Release Body = SPRINGFIELD, OH – Sounding a note of caution for other real estate investors, nationally known real estate investor and trainer Alan Cowgill today told investors who combine funds from two or more different private lenders to be very careful to follow their state and provincial laws and SEC rules and regulations.
Cowgill is a leading proponent of using private lenders to fund real estate investments. “Investors do need to be careful to follow all the rules to the letter when they’re pooling private money,” Cowgill said in an article in his blog, which appears at www.privatelendingmadeeasy.com. Pooling money occurs when investors combine funds from two or more private lenders and it requires investors to file paperwork with their state or province and provide a disclosure statement for those lenders.
Cowgill went on to say that because securities laws vary, investors need to be aware of their own local requirements. “For example, in Ohio where I live, we have what is known as the 6(A)1 filing,” Cowgill said. “This allows for pooling an unlimited number of private lenders’ money, and for advertising. Without it, you can’t pool money,” he added.
Cowgill also told investors they need do their homework to find the proper exemption, filing or registration option in their state, and, once again, to comply with its requirements. He said that while the regulatory paperwork requires investors to pay a fee, that’s a small price to pay for being in compliance. On the subject of exemptions, Cowgill pointed out that when investors use one of their state’s exemptions to bring in private lenders, they are making and offering a sale of a security. Two key concepts are that there are exempt securities—usually a security issued by a government agency or authority—and exempt transactions—sale of a security not issued by a state agency. In Ohio, for instance, the law says that the sale of notes, bonds, or other evidence of indebtedness secured by a mortgage lien on real estate is exempt if they are sold to a single purchaser in a single sale.
“But remember,” Cowgill said, “these are still securities, and compliance with the offer and sale is still required.” Cowgill also noted that some states may offer investors more than one regulatory choice, so they will need to evaluate those choices.
Alan Cowgill is a speaker, real estate entrepreneur, and author of Private Lending Made Easy. He is president of Private Lending Made Easy and the founder of Integrity Home Buyers, Inc., a real estate investment company in Springfield, Ohio. His blog appears regularly at www.privatelendingmadeeasy.com.
Web Site = http://www.privatelendingmadeeasy.com
Contact Details = Contact: Alan Cowgill, President Telephone: 1-866-831-3540 Email: mkt@integrityhomebuyers.com
2009
