MB 115: Enlisting an SEC Attorney to Protect Yourself & Ensure Compliance – With Mauricio Rauld

If you are new to the idea of raising money to invest in apartment buildings, the particulars of complying with SEC regulations may have you spooked. No one wants to inadvertently break the law and face restitution, sanctions, or worse—fines and jail time! The good news is, with an assist from an SEC attorney, it is not as difficult to comply with securities laws as you might think.

Mauricio Rauld is the founder and CEO of Premier Law Group, a boutique securities firm specializing in asset protection and SEC compliance. Mauricio has 18-plus years of experience helping multifamily investors increase and safeguard their wealth through syndications. He is a regular contributor to The Real Estate Guys Radio show and a faculty member of the Summit at Sea, a week-long conference for elite real estate entrepreneurs. In addition, Mauricio serves as legal advisor to The Real Estate Guys and asset protection advisor for The Elevation Group.

Today, Mauricio sits down with me to explain his role as a syndication lawyer. He discusses the two legal routes to SEC compliance, the idea of a ‘preexisting substantive relationship,’ and the consequences of breaking the law. Mauricio shares the difference between 506(b) and 506(c), describing the right way to use social media to connect with investors under each exemption. Listen in as Mauricio walks us through the process of working with an SEC attorney, including the general timeline and approximate cost for ensuring compliance with securities law.

Key Takeaways

Mauricio’s role as a syndication lawyer

• Helps real estate investors scale business
• Raise money legally for bigger deals

What qualifies as a security

• Returns generated from your efforts
• Must comply with federal, state laws

The two legal routes to compliance

1. Register with SEC (two-year process)
2. Find exemption, follow rules

The consequences of not following the law

• Restitution—return money to investors
• Sanctions—prohibited from raising money
• Fines, jail time

Mauricio’s advice around disclosures

• Full disclosure required for non-accredited investors
• Not required for accredited investors ($1M net worth)

The benefit of using an exemption

• Creates safe harbor, certainty
• Preempts state law

The features of the 506(b) exemption

• Raise unlimited amount of money
• Up to 35 non-accredited investors
• Prohibited from advertising

The features of the 506(c) exemption

• Lifts prohibition against advertising
• Accredited investors only, reasonable steps to verify

The idea of a preexisting substantive relationship

• Citizen VC outlines nine points
• Deep conversation, questionnaire, credit report, etc.

How to use social media to connect with investors under 506(b)

• Talk about business in general terms
• Don’t discuss specific offer or prior deals

The process of working with an SEC attorney

• Work together on business plan, structure
• Lawyer drafts offering documentation
• Includes PPM, operating/subscription agreements
• 506(b) = investor questionnaire
• 506(c) = CPA letter or third-party verification
• Accept money only after documents returned

Mauricio’s insight around the timeline and general cost of compliance

• One week to draft docs once business plan complete
• Include $15K ‘legal and compliance’ line item in budget

Connect with Mauricio

Premier Law Group

Email cs@premierlawgroup.net

Resources

Citizen VC Letter

Verify Investor

Michael’s Coaching Program

Michael’s Products

Michael’s Syndicated Deal Analyzer

Michael’s Deal Maker Mastermind

Financial Freedom Summit

Partner with Michael

Invest with Michael

Michael’s Course

Free eBook: The Secret to Raising Money to Buy Your First Apartment Building

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