J&M Investment Pool Standards 101

Concepts of investing real property, what you need to know…

A Pooled Fund is the combined funds of multiple investors which, when added together, create greater purchasing power (and thus more diverse and rewarding investment opportunities), through simple economy of scale.

The concept of pooling private money is widely accepted and has been around for decades. It doesn’t requires precised legal planning and tax advice before taking action.

  • Real Estate Investments are NOT federally protected

There are two types of investors:

  1. Accredited: One with significant net worth or annual income
  2. Sophisticated: One with sufficient investing experience and knowledge
  • These type of investors do not have the same level of protection as for example a new investor. It is up to the individual to weigh the risks & merits of each real estate investment opportunity because they do not have any federal protections.
  • LLC & REIT’s:

REIT’s (Real Estate Investment Trust’s) is known to be an easy option for adding real estate into and investment portfolio. REIT’s may invest in one area of real estate, location or mortgage investments.

LLC (Limited Liability Corporation); when it comes to LLC’s it’s important to structure it such that the investors have a vote over which properties to invest in if they want that level of control.

  • Three Types of Offers in Real Estate Investing

RE Investments are a security and must be registered.

  1. Specified: the proposed investment is for a specific property
  2. Semi-Specific: Is a proposed entity; will invest in a particular property and conceivably in other similar types of properties.
  3. Blind Pool: proposed investment based solely on the decisions of a sponsor.

Note that it is important to be fully aware of what you’re getting into before handing over your cash. Making these types of investments are risky, but are legal and totally worth it once the correct knowledge has been obtained to support your real estate investment.

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