Hello everyone!!
Every Saturday i open the Sydney Morning Herald and look in the classifieds section and see ads like:
“Real estate deal, need investor, minimum 100k”
Im just wondering if i put toegther deals, and need private investors to invest in them is there a whole heap of rubbish that i would need to go through with ASIC to do something like this? Or can i just put ads like that in the Herald.
Firthermore if iam starting some type of business venture and want private investors do i need to write a prospectus or something? Or just ask for investors?
If you want to raise (from memory) over $2 million (or have 20+ investors) you have to provide a prospectus, and abide by ASIC’s laws (so you turn your deal into a private placements, selling shares, etc). Also you cannot ‘advertise’ the deal.
I must say if you want to attract investors you must offer them a very high return (over 50%+). Mainly it is for developers who simply need some funds to tie a project over for a short period of time. The problem is with security – most of the time you come after the 1st mortgage and if a deal goes belly up you can lose everything (so in this case higer reward, does tend to collorate with higher risk).
Unless you have bought lots of properties or know how to develop, I wouldn’t try to raise funds, as mainly investors look at your track record, and if you don’t have one, how can they trust you that you won’t go bankrupt.
Rgds.
Lucifer_au
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