Hi everyone,
We are in the early stages of forming a hard money lending business with one primary investor. We want to protect ourselves and our investor(s) going forward and want to implement an Investor Agreement term sheet/contract that will layout the expectations and obligations for both sides while we weigh prospective deals as well as while money is actively loaned.
Does anyone have any templates or guidance on where to start on this?
Any help is appreciated.
Thanks,
Brian
First, understand that the “investor” funding your deals, if he is not involved in the biz, is a passive participant. This means you are offering him a “security” which requires an exemption under Reg D and a Private Placement Memorandum, a state and/or federal registration, and a complete disclosure of risks.
I would first build your business plan for lending, a set of guidelines, and put that together with a disclosure of risks a lawyer prepares for your investor(s). Then, speak with a lawyer who knows this area of law about whether this crosses over state or federal securities regs. If you broker loans for the investor, that MAY take it out of securities regs, but you may have to be licensed with your state as a mortgage broker.
Home Agent
You are concern with home lawyer or agent he better guide you in this plan.