Presentation to the Steering Committee Fordham Legal Team May 19 th - PowerPoint PPT Presentation

Presentation to the Steering Committee Fordham Legal Team May 19 th 2016

• Introduction • Questions Presented 1.Securities Regulation 2. Entity Choice 3. Self-Directed Retirement Accounts 4. Property Securitization • Key Ideas in Approaching our Research

I. Implication of state and federal securities regulations • –

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II. Choice of organizational structure The analysis was divided in two separate parts regarding REIC’s main goals: To allow members of REIC (members of NYC communities) to have a say in the development of their communities. To create a legal entity through which REIC can pool the money and distribute profits generated by the investments.

Objectives of the “Principal Corporation” • Run on a cooperative basis (one member one vote following cooperatives principles). • Maintain the decision-making process in the communities, regardless if the members invest money or invest other things. • Allow flexibility in the member admission process and the options to invest in REIC’s activities.

The Principal Corporation as a: or Cooperative Not-For-Profit

The Principal Corporation as a: or Cooperative Not-For-Profit but Because neither a Cooperative nor a Not-For-Profit can distribute dividends, REIC would need another investment entity .

Objectives of the Investment entity • Pool money from investors. • Acquire and hold interests on commercial real estates. • Received the decisions made by REIC members. • Distribute profits to the members investors.

The Legal Entity to hold the investment as a: NYC REIC Investors = = General Limited Partner Partners Limited Partnership • General Partner manages the entity • Limited Partners - investor members • Limited Partners are only liable up to their contributions • Pass-through advantage (?) – pays taxes only once

A viable option:

III. Use of self-directed retirement accounts

IV. Property financing • Acquired Property as Collateral for Loans • Supplementary source of financing

Issue: Property Without Clear Title • • •

Viable Model: The COMMUNITY LAND TRUST

Findings: CLT Residential Owners

Thank you. LSLS Fordham Team