You may need to ask a securities attorney. If you’re signing up passive investors in an LLC you could still be exposing yourself to risk. SEC is like the IRS. If you set up entities to skirt around SEC rules, even though on paper its legit you could still get in trouble.
One way of raising OPM without going through SEC is to do one off deals by selling the NPN to the clients LLC. He can authorize you as a manager or officer of the LLC if he wants you to do workouts.
Another way of doing it is by using a promissary note and collateral assignment
I’ve seen investors have good luck with seller finance properties. Even in rough condition. You can’t rent a house for $300-400 even in terrible condition in most parts of the country. Put it on zillow, trulia, FSBO sites, syndication sites.
Be careful buying to acquire property in markets you aren’t familiar with. Often in urban cities, one city block can be the difference between a $75k property and a $15k property. And BPOs are not reliable. I’ve gotten two BPOs within a week and had it range from $57k and $110k.
Now if you have PN that becomes REO thats another story because you’re not buying it with the intention of getting an REO. If you have a portfolio, it will even out. But if you’re buying just to get REO, you’d better know that market just as if you were buying straight up REO and FSBO with the intention of making money renting or flipping.
