Working Capital The Real Estate Podcast

Real Estate and the Law with SEC Attorney Mauricio Rauld|EP29

Nov 25, 2020

In This Episode

Mauricio is the founder and CEO of Premier Law Group, a premier boutique securities law firm.  As a nationally recognized expert on private placements, Mauricio works with elite entrepreneurs who seek to increase and protect their wealth through syndications. Mauricio specializes in Reg D exempt offerings and educates investors from around the world on how to navigate the complex world of securities laws. Known for taking complex matters and making them simple to understand, Mauricio is sometimes, jokingly, referred to as one of the few lawyers who actually speaks English.

With over 18 years of experience, Mauricio has previously been selected as a “Southern California Rising Star” by the Southern California Super Lawyers Magazine, recognizing him as one of the top 2.5% up-and-coming lawyers in Southern California. A graduate of The University of California at Berkeley, Mauricio obtained his Juris Doctorate degree from Loyola Law School in Los Angeles, where he was a member of the Scott Moot Court Honors Board.

In this episode, we talked about real estate syndication, importance of SEC securities law to real estate investors, Rule 506(b) Versus 506(c) and much MORE!

Resources and Links:

Email: CS@PremierLawGroup.net

www.PremierLawGroup.net

 

 

Transcript

Jesse (1s):

Welcome to the working capital real estate podcast. My name is Jesse Fragale. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time. All right. My work in capitalist, we have a special guest on the show today. He is Merissa Rob Mauricio is the founder and CEO of Premier Law. Group a premier boutique securities law firm. As a nationally recognized expert on private placements. Merissa works with a lead entrepreneurs who seek to increase and protect their wealth through syndications Mauricio specializes in Reg D I exempt offerings, which we will talk about today and educate us investors from all around the world on how to navigate the complex world of security laws.

Jesse (51s):

Mauricio how’s it going today?

Mauricio (52s):

Oh, I was going good. Jesse man. Thanks for having me. Appreciate it. Awesome.

Jesse (55s):

I like, I like that the sun is still poking out where you’re at right now. Where are you? Where are you talking to me?

Mauricio (1m 1s):

I’m in beautiful Southern California and M, it’s a beautiful day, except I’m right next door to a couple of fires. And so the, the, the smoked drifted over yesterday and I was still kind of going on here about a, probably about 20 minutes North of me. So, but it was a beautiful Southern California day.

Jesse (1m 20s):

I like that. It’s a kind of ironic it. I was talking with my partner today when we were just like, you know, with all of this shutdown stuff, we might just go to California in December and bite the bullet on the quarantine on the way. But

Mauricio (1m 31s):

Yeah, for sure. I, I think California is good at it and you know, I used to live in Scottsdale, Arizona, Arizona is a pretty good place to be also in, ah, in December and January. It’s probably a nice mid seventies early and low eighties in that time. So

Jesse (1m 42s):

That sounds great. As we wrap up playing golf, if you could get a few more weeks out in a, in Arizona, for

Mauricio (1m 48s):

Sure you can, for sure. Yep.

Jesse (1m 50s):

Awesome. Well, listen, thank you so much for coming on the show. I thought it’d be really great for listeners to talk with a security expert. You know, I’ve heard the term auntie lawyer thrown around. I dunno if that was a self proclaimed, but why don’t you give me a little bit of a background for our listeners on who you are and what you do?

Mauricio (2m 10s):

Yeah, the I and kind of the anti Lawyers primarily because you’ll find out here I am not your typical lawyer. M I tend to speak English one of my dear friends is a Tom will right above probably a rich dad fame. I’d like to say on one of the few Lawyers that actually speaks English. So my, my thing is just taking, you know, these kinds of complex securities. I mean, you know, just making it sound simple to understand, even though they’re incredibly complex, you know, I recognize and what I would like your listeners’ to recognize, especially if there are sponsoring in their issuing is not your job is to know all of the little intricacies of the statutes and everything. And that’s what the Lawyers for you. You are not the technician, you are the quarterback. So your job is to make sure you have a good understanding of everything.

Mauricio (2m 51s):

So you can have intelligent conversations, but like I’ve been doing this for 20, 21, 22 years. Now, I started my career, you know, I went to Cal up here and in California and then did my, did what every lawyer dreams are doing, which is I went to work for a pretty large, a law firm here in long beach, California. A great firm did a securities work, did a basic litigation. It’s a maritime as well, but I represented all of the brokerage firms. So at the JP Morgan is the Merrill Lynch’s the Charles Schwabs, the American expresses of the world. And so it was in litigation. So in those clients got sued, I’d get brought in and I defend them. I go to the, to do that, position’s in motion is trial work, but you know, you can do trials of pellets, arbitration, so all that kind of stuff.

Mauricio (3m 31s):

And then long story short, I re realized that’s not what I wanted to do was fortunate enough to come across a little, the little purple book of the rich dad, poor dad book, which I’m sure you had to read and as many, but listen to the bread. And just like most of you, it kind of changed my world made me realize things that I haven’t really, I kind of thought about a new about it, but this was kind of confirmation that they, that when I was thinking it was on the right track. And so that led me to meeting the real estate guys who are Robin Ross, who is interestingly enough, was actually driving down to Southern California in a herd. Robert Kiyosaki had a drop in for the real estate guys have to have I not read that book literally a couple of weeks after I read it, I heard the radio ad. This is back when we had radios tell you how long ago that was.

Mauricio (4m 11s):

And that led me to a seminar that the real estate guys are putting on long story short, I went to work for those guys’ wasn’t there in a general council in house council, and they did all of their syndication work securities work back in the day when they were doing a lot of that. And then that kind of led into me creating my own firm and helping a lot of their members. They’ve got a pretty big membership. And so I started helping some of their members, you know, put together a syndications and help them with a massive protection. And I started my own firm in 2006. I think it is. And it’s been about 14 years now and I had my own firm. And right now I specialize a a hundred percent on syndication. Cause I am as a syndication attorney though, that is just a fancy way of saying I’m an sec lawyer. So I just to make sure that I help my clients kind of stay out of jail by making sure they’re complying with all of the securities laws when they are out there raising money from passive investors, like a lot of your listeners,

Jesse (4m 57s):

Right on a good summary in terms of the security is I think, you know, at least for me, when I first heard securities, as it relates to real estate, I was a little confused. That was like, I always thought that it had to do with stocks and, and placements on, you know, for companies that are in may be private equity. What is a security for those that don’t know? And, and how does it apply to the real estate world?

Mauricio (5m 18s):

Yeah, that’s a common question and I, and I totally got it. Like why, why is the SEC involved? I’m just buying a real estate. I’m here. I’m trying to collect the money from people on buying a piece of property. Like why is the securities and exchange commission in my world? Why do I have to hire a securities lawyer? If I’m putting one together, why don’t they have to worry if I’m a passive investor? The reason is the definition of a security under the sec is extremely broad. I mean, you, your rights, you think of security as a stocks and bonds and mutual funds and you know, all that kind of stuff, stock market stuff, but securities are, you know, all of those or actually are, are definitely securities, but you know, a profit sharing your agreements, you know, tenants and common agreements, a side agreement. I always joke handshakes high fives are all securities because the definition of a security essentially is any time your sort of taking money from passive investors, where the returns are generated by your efforts, you’re dealing with the security.

Mauricio (6m 10s):

So if you’re the one who actively doing everything and your investors are passive, the structure doesn’t matter. You could be doing an LLC, a corporation, a tenant’s in common and profit sharing a handshake. You know, people is probably one of the biggest mistakes people make. They try and get creative and like, Oh, I’m going to, I’m going to put this together this way. And that way I’m going to be a boy, the securities laws, cause I’m not issuing LLC units or corporates or corporate share’s or anything like that. And again, it doesn’t matter if the structure itself, as a matter of if you’re, if you’re the one that’s doing all the work and generating the returns for your passive investors, then, then your, your, your issuing securities is, which is why you need to worry about both federal and state securities laws.

Jesse (6m 44s):

So how do we differentiate if you have a JV relationship or at least maybe what you think is a JV relationship with say two or three Partners, you know, where, where do you get to the point where you do cross that line, where you need to start thinking about the securities and potentially needing exemptions under, under SEC rules?

Mauricio (7m 2s):

Yeah. Chapter one of the book that I, that I’d just put out, like we talked about, that’s one of the biggest things. Again, people call how I’m doing a joint venture that I don’t have to worry about things again, what you call it doesn’t matter if it’s like, well, how do you actually, what does that look like when you pull it together? And the key for a joint venture, or if it’s a true joint venture, then you’re right. It’s not a security, but for it to be a joint venture, number one, are you going to have to have a very limited amounts of Partners involved? Like you mentioned two or three, great. If you got three people, four people five is about as close as I would get comfortable with, but certainly two or three people where everyone’s, again, everyone’s bringing something to the table, right? So the, to the returns are not being generated by the efforts of one person, but it’s a collective energy of all three in all four or five that are coming together, putting their capital to put in their sweat.

Mauricio (7m 47s):

Everybody’s kind of doing a part of the thing. And then that’s a joint venture, but what tends to happen is people call it a joint venture, but reality, they, they need one other person just needs to put in the money and they come in and they’re not really doing anything or are they give them some honorary title and something that they pretend to do. But again, if it comes down to it, you’re gonna have to be able to prove that these people did it. And probably one of the biggest misconceptions or the things that people forget about is the, the, the joint venture partner is better to have some real estate experience, right? Because again, if it, if you’re looking at it a newbie or you never, well, maybe a new hire, you’ve got to do to get away with ’cause, you know, maybe you are arguing that your trying to learn it. But if you’ve got the little old lady are something that just write you a, a, a a hundred thousand dollar check, and they don’t know the first thing about real estate, it gets harder and harder to argue that they’re bringing something, some expertise and some, some, some something to the table.

Mauricio (8m 32s):

And that, I’m not saying you can do it, but you really wanna make sure that they, they are actively involved. That’s the key. Everybody needs to be actively involved. They are not equally I’m in a proportionate, right? I mean, I may, I’m the only putting 10% of the money, and maybe I’m only doing 10% of the work. That’s fine. But if I’m putting in 10% of the money and I’m getting paid disproportionately from everybody else, because I’m doing 90% of the work, that’s going to start to look a lot more of like a security. So once you

Jesse (8m 56s):

Determine that you do have a security, or you think that you have a security, you know, I think I’ve heard you talk before you have the option of registering it, which nobody does, or a very, very few people do, or they start looking for an exemption. So maybe you can talk about, you know, those two You D, I the differentiation between the two. And then if they do go that exemption route, what that looks like,

Mauricio (9m 17s):

I will say, there’s three actions. So you can register this security when the SEC, you can find it an exemption, or it’s a legal, it’s one of those, you got three. So registration is basically going public. When we say registration, we’re talking about a full-blown IPO. And that’s something that just takes years. And it costs seven figures, eight figures. I mean, that’s just not something we’re going to be doing, especially for our real estate investors. Right? We, we, we, we are typically going under contract, or we’ve got 60, 90 days to close. You don’t have time to go file. Your, your offering would be SEC and spent a million dollars. And it just makes no sense. Right. So, and we obviously don’t want to do anything illegal. So we’re always looking for exemptions, right. Which is where I live. I live in the world of exemptions, cause everybody is going to find that exemption.

Mauricio (10m 0s):

And there’s, there’s really two exemptions that 95 that would really want exemption. They’re probably 90% of the people use. And then there’s another one where we were kind of covers now 95% of the people, and these are the infamous Reg D I exemption regulation Dee. So anytime you hear about Reg D I, or maybe five or 65 or six C, and I promise this is probably as technical as we’re going to get, but those are exemptions. And so then the idea is we don’t want to register our offering would be sec. So we need to find that exemption. And most people we’ll pick either a Rule five Oh six B or a Rule five or six. Each of those two rules are a part of this Reg D I exempt framework. That’s really where I spent most of my time. I think in my practice, I would say, you know, probably two thirds too, two to 70%.

Mauricio (10m 44s):

Now I’m kind of making this up. It’s just really liked it. I got to talk and I’m looking at the statistics here, but about two thirds of my clients will do five or six BES, which, which you can get two in a sec. But essentially that means is that you cannot advertise a, but you can take some non-accredited investors. I know we’ll talk about in a second. And then the other third we’ll do a five Oh six C, which is a Relic, not a relative. I know it’s been seven years now, but it’s a, I’m going to call it a relatively new exemption that actually allows you to advertise. This is kind of like the, the appeal of it. It’s like I can go and do Podcast and talking to, and my offering it on a podcast or at an event or on Facebook or whatever, but I’m limited to accredited investors only. And there’s some verification requirements on, on the users to be happy, but, but that’s where I lived. I just made sure that we’re complying at, and the reason these were popular, by the way, a Jesse, I think it’s important as the, these are preempts state law.

Mauricio (11m 32s):

So just to imagine, you know, as long as you know, we’ve got 50 States, and if, if, if you could imagine that you are putting together a deal and you have investors from seven or eight different States, if we didn’t have this preemption thing, which basically means the federal rules Trump, and we don’t no pun intended the federal rules, Trump, the state rules. And we don’t usually worry about the state’s securities laws other than the entire fraud provision. So if we didn’t have that preemption, we would have to go, literally not only hire an attorney in every single of those seven or eight state, but even so that’s the time and expense, but then we’ve got to make sure that our offering fits in within seven or eight different statutes. And every statute in every state is slightly different. So maybe one offering works in the state, but it doesn’t work in the Southern ones. So we got to tweak it. And then now that it doesn’t work in the third, it’s a nightmare.

Mauricio (12m 12s):

So five or six B in five or six, he tells us we don’t have to worry about all of that nonsense. Then we just worry about the federal rules. And if we can apply with five or six B these terms, then not only are we assured of being in compliance with the rules, because they know what we call safe harbors, but then I don’t have to go hire a lawyer in every single state and make sure that we’re compliant with California Law Florida law, or, you know, Texas law. And we just worry about the feds.

Jesse (12m 34s):

So I was always curious because you know, real estate is where we live, but real estate is not the only industry that raises capital. And these exemptions are these exemptions particular to, to real estate, or, you know, in the movie industry that’s raising capital, will they use these five or six, C, five or six B exemptions as well?

Mauricio (12m 53s):

Yeah, they are. These, this is not a, it’s not specific to real estate. And it’s interesting, actually. So I go as an attorney, you know, we’re, we’re just like a lot of other professions that were required to keep up. It’s an amount of hours of re two or three years to go from education. So I obviously go to these conferences with Ruth securities rules and the attorneys up there. And the panel is that they have very little idea about real estate. Like their world is not real estate. Like, you know, I’m actually, when I check you out with them, I’m kind of like an expert in their eye can certainly be up from that panel, talking about the real estate pieces because their clients are usually start ups right there at the, you know, it’s a company that needs, you know, think of Facebook. I would like to give the Facebook example, obviously now there are a public, but I think of Facebook when it just started, you know, after the first round of funding or whatever, they got a little bit of money and they started to grow and then suddenly I need to another million dollars or 5 million.

Mauricio (13m 35s):

I don’t even know how much they were raising. They went out there and just did a private offering. And I don’t know what exemption they were relying on it, but back then it was, it would’ve been a Reg D, I most likely, and they’re just raising the capital for their, for their operations. And so you can have a brewery that you want to expand and you want to add another or whatever. I mean, you can do it for anything and movies and other great example of these are all the same. Actually I did way back when I did something really into a movie and it was a five or six beat, so it’s not real estate specific.

Jesse (14m 2s):

So when you’re raising that money, you know, just kind of maybe think about start ups. And a lot of times, you know, friends and family, or the first investors that really give the seed capital and not dissimilar from real estate, a lot of times the first the investment’s you do or what that close circle. So maybe we could talk a little bit about the exemptions and what type of carve-outs, if any of them are for family and friend’s as opposed to a credited investors.

Mauricio (14m 27s):

Yeah. I mean, one of the reasons five or six B is so popular. And I think the last statistic I saw was that between B and C, I think 90% of the people use B over C is, is because you can accept non-accredited investors. And usually when you start out with friends and family, you know, it’s like an Jenni and uncle Bob in whatever, and they’re, they are not accredited. They don’t, they are not high net worth individuals, not always a rich uncle. Bob is not how we are usually a rich uncle Bob. And so that’s why this is kind of such an appealing, an appealing exemption. So you were allowed a limited number of non-accredited. So, which is 35, which usually most of the time, especially if you’re raising a million, 2 million, you know, you’re usually not going to have an issue of running up to that number, that 35 number, but an accredited investor is anyone who has a million dollars in net worth excluding their primary residence for has around $200,000 or the last couple of years, meaning now 2018, 2019, with a reasonable expectations of bringing that much.

Mauricio (15m 21s):

And more of this year there actually expanding that definition in a little bit. And I can go in to that if you want. And it just, just literally came out just over two months ago, which what is it now, the 28th? So it probably is in effect right now, but they’re actually trying to expand that definition. And a lot of it, there’s been a lot of just a debate as to whether, you know, net worth or income really should be the, the, the, the, the test as to whether somebody should be able to invest in some of these and Becca investments. I mean, there’s plenty of really, you know, rich folks who are complete morons and shouldn’t be investing in this stuff. And there’s a lot of people with modest means who are the smartest people in the room. So, so they’re starting to, to expand that a little bit in a, and they’re going to start allowing some certifications, meaning if you want to go take the time to go take a course and pass an exam, I get a certification than that, that you’ve studied this thing and you know what you’re doing, and then you will become an accredited investor, even though you don’t qualify with via the, the income and net worth.

Mauricio (16m 11s):

So that’s going to be interesting. We don’t know exactly what that’s going to look like at literally, like I said, it came out two months ago and they’re just starting to roll out some of these programs. So we don’t know it was going to be a certain way. He was going to be given a certification licenses as this is going to be a weekend seminar. Is it going to be a semester course? Is it a five-year program? And I doubt, hopefully its a weekend course or something that you just take for a couple of days and then you take an exam in and you’re done. But, but yeah, so a five or six B allows you to take up to 35 non-accredited investors, which is why it’s appealing that the big drawback is, and it’s appealing because you can raise a unlimited amount of money to, by the way. So, so the last I always used to say a JP Morgan had a, a, a $2 billion real estate fund, but I just saw that I think earlier this year of Blackstone, one of the largest M hedge funds out there, they have a $26 billion real estate fund.

Mauricio (16m 55s):

That was a reg D offering a five and six B right now they, they, they stick to their credit. It’s only in and they use a broker dealer’s. I mean, they played at a whole different level. It’s a five Oh one six B exempt offering. So on a limited amount of money, a up to 35 non-accredited, which is nice, you get to a safe Harbor. So you don’t have to worry about the state’s. And I’m sorry that the preemption is, we don’t have to worry about it States the, the big knock-on on five or six B the big limitation as you are not allowed to advertise, right? You can go on Facebook. We can go on this path. I can come on your product. It was like, all right, Jessie, you’ve got a deal. I’m looking to raise a million bucks. If anybody is interested in giving you a call that it wouldn’t work, I can go on Facebook. I can’t be Facebook ads or a post on Facebook. I can go to a conference or not that anybody is going to competently. I can go to a conference or passing it on my business plan.

Mauricio (17m 37s):

He was that that’s a general solicitation. So that’s really the restrictive part of it because it’s really supposed to be a private offering. You’re supposed to be going to people. You already know you have what we call it, a preexisting substantive relationships with them. And so advertising is a public, right? That that’s never been a part of it in that in 2000 and a, what was the name of 2000? And M 13 on September 21st, they’ve past this five will succeed. And this has happened right after the source of the financial crisis. Don’t know if the two of the 2008, 2009, 2010 was a disaster. And so they wanted to sort of encourage people to go raise more capital cause all the time, if you remember the financial crisis, everything has a really tightened up. So in 2012 of the jobs act pass, and then in 2013, five or six or eight came along, which actually allowed you, it’s a base that they are basically the same exemption, except it allows you to advertise.

Mauricio (18m 27s):

This is the big, the big pivot, right? For the first time. It, even though technically a private offering, you are allowed to advertise, which is kind of a weird thing. And your only real restriction is that you, you have to limit yourself to accepting accredited investors only. And you must take, what’s called reasonable steps to verify that there are accredited. I can just take their word for it. I can’t, you know, Jesse can just give me up, you know, a, a, a questionnaire and check a box and say, Hey, M, I’m loaded. I’m good. I’m going to have to take some, I’m gonna have to look at your tax return. I’m gonna have to get a CPA a letter or just something that shows that I’ve taken some steps to verify accreditation status. And so that’s, you know, we thought that was going to really take off and, and really be an exemption. And a lot of people will use, but, but honestly, you know, it hasn’t, you know, the statistics show, I mean, you know, 90 10 right now in terms of beavers to see, but I always encourage clients.

Mauricio (19m 14s):

I mean, it’s a lot cleaner, I think to do with five and six, see you, when you deal with a credit investors all the way right or wrong, you typically have less issues because the law and it assumes up the accredited investors know what they’re doing. They don’t need protection. And so there’s less requirements in terms of disclosure is, and, you know, they’re just the big boys and the girls. And so it’s, it’s harder. I think the getting into trouble, if you’re only dealing with the credit investors, when you bring a non-accredited investors under five or six B, now everything changes. You’ve got to literally treat them like their, the, the little old lady, the widow, 95 years old, that, you know, all that kind of thing. You really want a treat them with white glove. So you put together a huge documents, disclosure documents are laying it all out. It was planning this as we can to make sure that they understand all of the risks involved with the investment.

Jesse (19m 58s):

So I’m assuming the last offering I looked at, which was a, about a month ago, I’m assuming it was a five Oh six C in that we were given, like you said, that questionnaire have, do you have to a hundred thousand dollars or are you expecting to make it, I think, like you said, a million and marketable securities or cash, and then I think it’s at 5 million in real estate assets, something, something to that effect. But that would be, I would assume that that is not enough to verify from, from the, the sponsor’s point of view.

Mauricio (20m 28s):

Yeah. Not under a C if it was a five Oh six, be that would be enough. But if I wasn’t gonna be able to just stand out the questionnaire, you will check the box. We would make a representation in as a, as long as I know that, that, that, that otherwise, I mean, obviously if it’s a homeless guy and you know, they’re not accredited and that’s not going to apply, but if you, if you have a reasonable belief on the questionnaire, it works, but if you’re gonna do a five Oh six C, then look most outsourced out, it’s just, this is just kind of a pain, but, but essentially there going to look at the primary, they’re gonna look to tack if it’s income, they are gonna look at W2’s, it’s going to look at a tax return and a 10 99, if its net worth, they’re gonna look at assets. I’m going to look at your liabilities in a, pull, a credit report. It, they’re going to ask you to, to, to make a, a statement saying you don’t have any other liabilities outside of the ones that are listed in the once on my credit report.

Mauricio (21m 7s):

M and the easiest way is actually a C a w well, the easiest one that you, you try and get it as a CPA verification letter. So if you are a CPA, obviously, but you know that the CPA, it does your taxes that are familiar with your financials. If they write the proper letter with the proper language that letter alone could can suffice the issue is I know there’s a lot of pushback and CPAs because they kind of the reason that we can get CPA lettuce and it kind of pushes the liability on to them and they didn’t want the liability. So they don’t want to be making these statements that, you know, it’s like, they always want to, they always wanna, you know, kind of back a little bit and just be like, Hey, I’m, I’m not guaranteeing anything. It looks like they were accredited. It was like, ah, I don’t know. It was like, no, we need you to, the reason that it works is because you’re a licensed person. And so if you are wrong, I can come after you. And so there was a lot of liability pushback.

Mauricio (21m 48s):

So at the end of the day, a lot of people just use a tax returns because then that tends to show, you know, the information that you need right now,

Jesse (21m 55s):

Rather than, you know, a reliance, a letter, I guess, in terms of that, in terms of the So you see a lot in, in the news. And I think it was, it was a card on Capital recently. I believe it was a class action lawsuit, or is it a class action lawsuit? And I was always a little perplexed because, I mean, I think most people listening are aware of who grant Cardone is. I mean, you can’t really go anywhere online in real estate without bumping into him. So when he was doing these offerings, some of the things he would say were just, just sounded very, very, I guess a w you know, it didn’t take, you know, a little bit of a creative license in how much your returns are going to be. So maybe if, you know, kind of what that type of a, an exemption, or as far as I understand right now, he’s even going to actually not going to the exempt road and registering some of his, so what are your thoughts on?

Mauricio (22m 46s):

Yeah, so, so grant uses another exemption. So the one that does not too many people use, which is a reggae, you may have pulled a reggae. So there’s, Reg, D, I which we just talked about in there. This is a reggae, which is kind of what you do register. It’s kind of, we call it the mini IPO, because even though it’s not a full-blown registration there, isn’t, there is a, a registration process. And as an approval that you have to get from the SCC. So you, you submit your documents to the SEC and then you spend the next six months or so, going back and forth with the Attorney and the attorney want you to fix the doc’s and putting more disclosures, or asked me questions, and they’re kind of doing due diligence on you. And then after a six-month process, they came back and say, they kind of give their stamp of approvals Okay these documents, or good to go, and now you can go offer it to the public. And the nice thing about reggae is that not only can you advertise like Brenda’s, but you can take non-accredited investors.

Mauricio (23m 32s):

So you get the best of both worlds. Most of the time you’re taking smaller amounts, but if you watch a grant and you’ll see, then he was taking a $5,000, a thousand dollars. I don’t think, I don’t know if you are at a minimum, he was just taking money and he was advertising, but he could basically hit as many non-accredited as he wanted to up until I think 2000, but I don’t think he has 2000. And, you know, the only limitation really for nonaccredited is that they, they couldn’t pull in more than 10% of their net worth and or income or whatever it is highest. So it’s a lot of flexibility. It doesn’t work for most of us because you know, most of us, we have 60, 90, 120 days to close, and this is going to take six months plus. So, but if you are putting together a fund, which is what Brian was doing, you can do that. So the issue with brands is not that he was, he, he he’s entitled to advertise because that’s a big issue for us in five Oh six.

Mauricio (24m 16s):

B is people are out there and doing this wrong all the time. They were advertising without even knowing that they’re on Facebook. And they’re like, dude, that’s advertising, or you’re violating the rules. Bran can totally do that. Where grant allegedly as running into trouble. Cause again, this was just a complaint. That’s just a bunch of people that are not happy with the returns they are getting and the file they hire a lawyer, a complaint’s. So these are just allegations. That is that the, the, the, the issue there is the anti-fraud provision. And actually, so even though you are allowed to advertise, you can misrepresent what to say in an ad. If you know, you can’t make an, an omission that makes a statement on a true, because you, you kind of didn’t throw it in the blanks. So I think one of the biggest ones that I remember reading in the complaint, as he was promised, it was kind of doing this blue sky. He was really promising the world, but Hey, I’m going to give you a 15% annualized returns.

Mauricio (24m 59s):

I’m going to triple your money in two years. Like all of these statements that the allegation is that he had no real basis for making those. I mean, these were, this was a fun to actually wear, and he didn’t have any property’s when he, when you saw this thing. So it’s like, how do, where do you come up with a 15% return when you have, you don’t even know what you’re buying yet. How are you? Can you say you are going to triple our money? And I think one of the issues was that when he filed it with the SEC, he tries to put that on the dogs. So when you actually say, no, you got to take this 50% out. Well, that’s the alligation. And so when you took it out grey, but then he’s advertising in and doing the 15%. So that the lesson for me, again, whether this is true or not, it turns out to be true or not. Is that even though you have the ability to advertise on Facebook, on a podcast on whatever that doesn’t mean, you can do whatever you want.

Mauricio (25m 42s):

There’s still parameters. You don’t want to go crazy. You don’t want to be promising the moon. Ah, you always have that. You want to be putting all of these disclosures and disclaimers in there, but if you don’t really have, if you’re doing a Twitter post, don’t have room for a while, you know, these long disclaimer of things, right? And even on a Facebook posts that you can go a little bit more room on what you want to do on phase. If you’re at, if you are not allowed to advertise, when it’s a 5.6, see where it’s a reggae, or whether it’s some other ones, you want to get them off of there, right? You want to put an add in there or a post, or there’s a link are something that then that takes you to a landing page or somewhere else that you now have much more control over. And you can throw in all your disclaimer as, Hey, this is an unregistered offering. This is only for accredited investors. You know, past performance is no guarantee. You’d like all of those disclaimers or know you’ve seen it before, but that was a brand’s issue is a, he was riding on reggae, which if you’re doing a fund works while it’s just, and it’s super, it’s super expensive, it’s much more expensive to put one of those together that are on a regular Reg D I and there’s all the compliance that goes along with it.

Mauricio (26m 37s):

It, it just like a public companies have, you know, quarterly reports in the annual reports. They’re not as onerous, but there’s definitely a lot of reports in audited financials. So you gotta put together. So you’ve really got to be raising 50 billion or something. So that’s the thing. They really start making some sense.

Jesse (26m 50s):

Okay. That makes sense. I bet he’s a lawyer, his dream having that much online content for discovery. So, you know, I have a, a kind of meetup I do once a month for cross-border investors, some of the, a, the guys and gals, or a Canadian, some are a us. And I’m sure that our listeners that have a very similar thing going on, you’ve talked about something, you know, you said substan, substantive, prior relationship, you know, what point, or at what point does the SEC legitimately, do you see a substantive relationship or not? And you know, how do you, how do you kind of navigate that?

Mauricio (27m 22s):

Yeah. Great, great idea. I did detect it a little bit of a Canadian accent there with, in some of your vows. So yeah, I talk about this in, and I think this is a chapter three, have the books. So when you are the easiest way, it’s not the only way, but the easiest way we’ve talked about five or six B, you’re not allowed to advertise the easiest way to show, to prove that you are a burden than you did not advertise. It is by having what we call that a substantive relationship or a pre-existing substantive relationship with your investors. And luckily for us is one of the few areas of the law or in the securities world that we actually have some pretty good guidance. They’ve actually come out with a list of things that you should be doing in order to establish that relationship where you take a complete stranger that you’ve never met.

Mauricio (28m 3s):

You went to a meetup, for example, I go to your, and your band and I meet Jo and we exchange business cards are great. I don’t know Jo from Adam, but now I there’s a, a, a, a roadmap that I can follow, or if I could take these eight is actually the eight steps that they recommend that everybody does all of them, but a good practice would be to try and do as many, if not all of them where I can take a complete stranger and walk them through to a point where I have a substantive relationship and basically a substantive relationship has just, you’ve gotten to know them well enough that you believe that they have the sufficient knowledge and the expertise in a sort of business and financial matters where they can properly evaluate the risks on the merits of the investment. So it’s, it’s really a, a back and forth your, your, your SEC really want you to foster that relationship.

Mauricio (28m 43s):

So it’s getting on a phone call and maybe multiple phone calls. We typically recommend this cause it was one of the, the, one of the two, which is the send out. It really detailed questionnaire, a that I’ve put together, or if you guys were interested in and seeing that, but you know, it usually starts with a questionnaire, right? Here’s your question, but it’s not just like any, what’s your name? And what’s your favorite color? It’s, you know, what’s your net worth? What’s your income? What are your goals? You’re like, what’s your experience? Have you invested before in private offerings? What are you a growth mind? Did you know it kind of that same thing that if you’re filling out a, a, a, an options, a agreement or something, if you want to invest in, in, in, in stocks, is that usually probably a step one, and then you get on the phone call with him. And you’re probably talking through that questionnaire. And, and you’re, you know, you are encouraging them to look at your website.

Mauricio (29m 23s):

You are encouraging them to ask you questions. And again, there’s no magic. Time-line the sec has been very clear that it’s not three 30 days or what we used to be called a three touch rules and all of these things like that they use to maybe be now, but now it’s like, it’s the quality of the interactions that really matters, right? But at some point you’re documenting this information. And at some point you say, you, what? I didn’t know Jesse now, and I’m going to imagine it could be a week or two months, but I know Jesse now a few times we’ve spoken on the phone. We’ve been emailing back and forth. I’ve shown him some of our priority deals. And I understand what he knows. He’s a smart guy, get it a documented, all that, all right. Today is the day that I, I hear my declare, but today’s a day that I have a substantive relationship with Jessie.

Mauricio (30m 5s):

Now I can offer Jessie future deal. I still can offer him any current deal, because I have to be a preexisting, something to relate to. And that means preexisting the offering. So anything that I’ve gotten now, you’re, you’re not eligible, but if the next quarter or next year, or next month, I have an another offering and I want to do it five or six B, I could come to you. And ’cause now I have a substitute relationship with you, and I’ll tell you that deal.

Jesse (30m 26s):

So let me give you a case study. We had somebody on the Podcast that prior to being a syndicator, he was a, it wasn’t law enforcement when he left law enforcement. One of the things that he did was, you know, he had talked with his colleagues over, I guess, if you know, months, if not years, about the real estate investing he was doing. And then when he eventually left the force, he said, you know, listen, guys, I’m going to a, have a chat about something that I’m looking at right now in real estate investment things that I’ll look at it in the future. And you know, whether it was 20, 25 guys that he had known for a number of years, and he had talked about, you know, raising capital for a particular, a property at that point, do you think the SEC would see that as a subsidy substantive pre-existing relationship that they had were colleagues, they had talked about real estate or what he needed to do more in that scenario?

Mauricio (31m 13s):

You know, this is all the, the key words for us is always, they’re all the facts and circumstances. You will always hear those things, right? So they’re all unique things. But I think again, the, the rule says that you cannot advertise and you can not generally solicited. Doesn’t say anything about it. You have to have a pre-existing relationship. In fact, if you get a referral, right? If I, if, if you, if Jessie you’ve got a deal, then I’ve got my brothers and I’m like, Hey, Jesse me and my brother. He is looking to put money. I know you got a deal. You guys connect and he invest in your deal. You don’t have a preexisting relationship with my brother, but you didn’t advertise either. Right? You didn’t generally solicit. So I think in those scenarios, and this is, and in your case study, if you’ve got somebody who’s, who’s, who’s having a sort of a closed group, you know, I don’t know if there were a one-on-one calls or if they were all getting together at a, at a dinner or, or I don’t know who he was communicating, but, but if you had this Law many, many years met them up, clearly it was not an average.

Mauricio (31m 59s):

Clearly he did not get those potential investors via advertising generally. So he has a relationship with them on a pretty good one, a, a, a friendship actually, and, and a business relationship with them. So I think that’s, that’s how you get around that one in terms of like, you know, I did not advertise all generally solicit to these 25 people. Now, if those twenty-five people are people that just, you know, I think the dangerous part is when you can just get on a, a, a, a mass mailing list, and now there are a part of, you know, 10,000 people you’re just gonna blast. So if you don’t really know who those people, that’s where you going to get more of an issue. So to me, that preexisting always really the tool that we use is when you meet, you just met somebody, like you don’t know that at all, you met them at an event, or, or maybe you, you used Facebook in the right way, or maybe you put a really great series or something on Facebook that was not advertising.

Mauricio (32m 44s):

It was not supposed to be, but somehow you got their email as a lead magnet or something. And now you got their contact information. That’s the kind of person you want to start putting them through that, through that process, if it’s somebody you’ve known for 20 years, clearly you did not advertise when you had those conversations with that person about a particular deal. Yeah.

Jesse (33m 0s):

Yeah. So you mentioned radio before and said a day to day. Like I consider myself a senior citizen in the, in the millennial world, but my point is that technologies is shifting and its moving fast. And I think I’m fairly savvy, technologically M, you know, online and trying to put up content for a real estate. You have a podcast where are you talked a little bit about what you should be doing, you know, when you’re online. And I think it was to the effect of, you know, when you’re raising for a deal post your family post to your friends, do fun stuff, but maybe, maybe not real estate, especially specific as to the deal. And then when you’re not raising capital for something, you know, talk about education and real estate, maybe you can talk a little bit of that best practice and you know, what the implications are for the future.

Jesse (33m 43s):

Because at the end of the day, I think that we’re not going to get younger real estate guys or gals to be off social media. They’re gonna use social media, but you know, what are, you know, from a lawyer’s point of view, what’s, what’s the best practice.

Mauricio (33m 55s):

You know, one of the frustrating things for us and it’s, and it’s a legitimate frustration is, you know, social media is relatively new. I mean, it’s been around now for a little bit, but you just think about it, you know, back in 2008, which is the last big financial recession crisis, we had a Facebook was around, obviously Twitter was around, but wasn’t at the level that we have it now. So the issue we have is that everything has been going so great for the last 12 years that we haven’t really had any challenges. We haven’t really had any in any issues come up or, or, or, or really the SEC nailing anybody for the stuff they’re doing it. So we don’t have that much guidance, but Facebook and all of that’s out of it. If you’re putting something about your deal that’s advertising and the key term, or the thing to understand is that there is a concept called conditioning on the market.

Mauricio (34m 36s):

So obviously if you have a deal and you’re not allowed to advertise, you can post that on the Facebook. Everybody is kind of gets that. But even if you don’t talk about your deal, but you’re kind of, you know, anything that gets people excited about what your doing, or maybe if you’re talking about your priorities is, and it’s just, it’s just some way to arouse peoples enthusiasm about you. What you’re doing that could be conditioned, could conditioning the market. And so I have always recommended that if you have an active deal, if your a sponsor and you’re doing a five or six B deal, meaning if you’re not allowed to advertise, then just stay off social media while you have that active Vue. I just think you are playing with fire. Is, is it possible for you to post something? Yeah, but it’s such a great, it’s an open for interpretation. Like why run the risk? Right.

Mauricio (35m 16s):

Plus it’s, that’s not the time to do it. I mean, the time to find the investor, that’s a long period. It’s not something you’re just kind of put it on a switch and suddenly 20 people who sign up for your deal, it’s going to take a while. And so I recommend that there are two things that we know that we can put it on Facebook or in social media in general is one is factually information about yourself in the company. So you put your resume up there in brag about what you do and what’s your company and what your level of expertise is. And then the other thing is value added. So there’s nothing wrong with putting together content that people really find valuable that they were willing to exchange their phone number or their e-mail address in exchange for that content. So putting together a report as to why real estate is the greatest asset class for building wealth. And then it’s just a report on that.

Mauricio (35m 56s):

And, and, and you get some of these email in exchange for that report. Great. Why Southern California is the greatest real estate market. It of all times to invest in right now, you know, or why mobile home park is a great asset cloud, all those kind of things are what you were doing. I mean, you are a great on, I don’t know if you’re doing five and six fees or seeds or whatever, but you know, a podcast is, is a great thing because if you notice you’re adding a tremendous amount of value to your audience, your interviewing a guess, or you’re talking about your, not talking about your deal, if you’re not talking about or anything. And if you in your Podcast, you said, Oh, and by the way, you know, I’ve put together a bit of a book. If you want a copy of my book or email me, or you have gotten a, a webinar series, or if somehow you get their contact information, that’s totally legit. And that’s how you, you, you should be leveraging social media when you don’t have a deal getting to go to the, as many webinars that you can Or, especially now they’re all of the virtual meet-ups or go to meetups that you are putting together, getting a context and then put them through those eight steps so that you can take them from a complete stranger and have get to a subject to the relationship so that you can offer them a future deal.

Jesse (36m 56s):

That seems to be the, the funnel that just investors have, have just gravitated towards over the past few years. One thing I was curious about if it is, if you have any stats on the private placement market, I’ve always been curious in, it’s been very hard to find it online as to the number one weather. We know the size of the private placement market say in the U S and then secondly, what the, the average deal size is. I think most people think that these deals on average are tens of millions of dollars. And I don’t think that’s close to the close to accurate.

Mauricio (37m 27s):

I do have a, I haven’t looked at them in a while, so you can find them if you Google around. I was actually looking for that information last year. And I came across a 2017 numbers. And maybe now their, I dunno, I don’t remember where that came from. I mean, they are SEC, but I’ll give you the, some of the answer is number one is the average raise or according to the SEC is 1.2 million. Hmm. So take that for what it’s worth. I got clients or prospects as they are. It’s a small rate and I’m only raising a million and a half for 2 million. And I’m like, the average is at one point too. So that’s, that’s just a number that I’ve seen out there. And then what I saw, which I thought was interesting is in 2017, there were 30, I think something like 30 to 35,000 private offerings, 30 to 45,000, which is a big number, only 8% of those had a non-accredited investors.

Mauricio (38m 16s):

Because even though when you do five and six, B is when most people equate these five or six speeds with non-accredited, as the reality is outside of real estate, a lot of people are nervous about raising capital from non, at Fred and bezel, or certainly if you’re a big company and you’re going through a broker like Merrill Lynch or, or a Goldman sachs’, and they have these high net worth for them, and you’re not going to be a non-accredited, but, but the, the level of disclosure for not a credit to is really tricky and most attorneys, I think in most issues and probably recommend not to take non-accredited because if you’re just raising capital for your deal for you, for your business, I think, you know, there was a group of us that do the real estate piece. So we know where the real estate asset class as well enough. And that kind of it’s a very similar Multifamily is a Multifamily. Yes.

Mauricio (38m 56s):

There’s specifics about your particular deal. You’re a particular market, but you know, 90% of those risks are, are probably shared among all the Multifamily investors. And there are a shade them at all of the mobile home park investors, but yeah, 8% of that 30,000, I was trying to figure out just from my business, like how many, I’m trying to figure out how many, five or six B, you know, nonaccredited kind of deals are, are out there, or actually not so much that I’m sorry, I will take it back, but I’m trying to figure it out. How many, how many issue, how many people are doing this? I would, that was what I was really trying to figure out, like how many people are out there raising capital, is that a thousand people to 5,000 people? I mean, a cause that was actually talking to somebody and we were talking about marketing and I’m like, well, why don’t we just do this and this and this? And they’re like, I don’t know if there’s that many people raising capital.

Mauricio (39m 37s):

I mean, there’s not a 10,000 people. I don’t think we’re raising capital. So anyways, so I thought that was interesting to stick, but if you Google around your age, if you dig it a little bit, you can find it. And I’ll, I’ll, I’ll look at it. I don’t know if it saved any of it, but I’m happy to forward it to you if I look it up. Right.

Jesse (39m 52s):

Yeah. That’s fascinating. I’ve never really thought of it from the business development side for the lawyer’s. So where are, you know, that’s your pool of, of clientele that you’re, you know, you, right.

Mauricio (40m 0s):

Yeah. Because I got into the hole sort of a, you know, Facebook marketing and, you know, like the geo fencing, which I know you are familiar with it. So every time I went to an event, I would just kind of capture that whole event. And then I’m like, well, why did I just extend that to something? Well, maybe I’ll do that. And then I, I, you know, I know I’m just kind of running the numbers and then I’m like, wait a minute. There might, I may already know everyone. I may already know. You know, there may only be 2000 or 3000 people who were doing what we’re doing. Real think about it. But those 30,000 was everything. That’s not real estate. That’s all of it. So what percentage is that is real estate. I dunno. So how many real estate syndicators were out there? That was really what I was trying to get to that you just have an idea what the market, what that, what that market looks like.

Mauricio (40m 40s):

And, and I, and I still don’t have an answer to that, but that’s how I found those stats.

Jesse (40m 45s):

Hmm. So, you know, we have a little bit of time left, but before we wrap up, I wanted to talk about something about crowdfunding. And, you know, we’ve heard so much about this over the last few years. What are your thoughts on crowd-funding and how do they get around? You know, you mentioned grant Cardone raising 5,000 or 2000, when you see crowd funding, you know, which was, where did they play it is, or is it the exempt Poul? And what would a lawyer like yourself do for a company that is raising via a crowdfunding for real estate?

Mauricio (41m 16s):

So when you say crowdfunding, there’s two things that pop into my mind. One of them is five or six, or the deal. If I were a succeed deal is crowdfunding. Really. I used to call it a big scene in the little seats. And the big seat was crowdfunding five and 60 is that’s what, where people started doing, doing their stuff, and they will put their ads on their or whatever. Then there’s another exemption that came out not too long ago, actually maybe three or four years ago, which called regulated crowdfunding, which is really the real crowd-funding. But that limits you a million bucks. You’ve got to use a particular portal. You can’t use your own website. You’re very limited on how you basically want to, you’re trying to drive traffic to that website. And those guys are really investing $50 or a, a a hundred dollars, $500. Right?

Mauricio (41m 56s):

So like, do you really want to be, you know, do you want to be dealing with investors who were giving you a $500 check, you know, and ended up with a thousand investors or something. So I’m not saying that’s not something you could do, but that’s what you’re dealing with in that world. I don’t have any issues with, with the crown. Now, again, Brant Rand started doing Five-O succeeds. So if you, if, if you remember or think about it raises, right, he did, it was like two 50 minimum. They were afraid and investors only high net worth two 50 minimum. And then he did such a great job building his audience. He was like, well, wait a minute. I got all of these people are watching me and the us, and they don’t have to 150 grand. They have 5,000 or a thousand or 2000 or whatever, 10,000. And so that’s when he did the reggae. Cause he, he had at the time to wait six months, eight, I think with him, it took him at a longer and he was such a, is a, he’s a well known guy.

Mauricio (42m 40s):

So So, I think it took it a little bit longer, but once it got approved, now you can use that platform. Any has that he’s developed, it worked so hard for us for the last two to three years and capitalized on. And I think that it was, that was genius that I think that the issue with Brad is just he’s he was a marketer. And then, you know, if he gets excited and, and, and can’t contain themselves

Jesse (43m 1s):

Triple the returns, So, Maricio, we do a, a, some similar questions for all the guests, and then we’re going to do those quickly here, or try to go through them fairly, fairly expediently. And then I wanted to talk a little bit about where people can reach you and especially your book, which I love the title so much. We might have to name this podcast episode of the title of your book. So M number one, you talked a bit about, you know, how you got into real estate and, and Rob Kiyosaki, but are there any other mentors that you had early on in, in your career, whether that was people that you knew, or just authors people in the industry that, that put you on the path that you’re, that you’re in on and, and have been doing over the last few years?

Mauricio (43m 39s):

Yeah, I think the one that comes out right away is, is a gentlemen by the name of Jim Roan. I don’t know if you guys have heard of him, but he and I actually found him through Tony Robins. So Tony Robbins is a, is a disciple of Jim. He actually worked for Jim when he was like 18 years old. So I started with kind of Tony Robbins. That’s how I got into the whole personal development thing. And then I then discovered thanks to the real estate guys, because they were really into it with, with, with Jim. So if you haven’t heard of Jim Rohn, R O H N E I highly recommend look it up. So I’ve learned a ton of from him. He, and I definitely can say, I never met the guy who unfortunately passed away about 10 years ago now. And, but, but he has so many such amazing success principles and Darren Hardy’s and other great guy that he’s also now basically took Jim’s Raines.

Mauricio (44m 21s):

And now, so if you’ve heard of Darren, he basically, it’s all, it’s all general and stuff. So if you actually listen to a Tony Robbins or Darren, then they’ll just say these things and principals and it’s all jumbled and stuff. So that’s by far the, probably the number one mentor. And then I, I do want to say the real estate guy is also because that’s what a rep, right at the beginning of my investing career and all that stuff, they, you know, working for them and obviously knowing them now for 16 years or something and good friends of mine, but they they’ve taught me quite a bit as well. So those are kind of the mentors on the, on the business side.

Jesse (44m 49s):

Yeah. Those are great answers. The, you know, it’s, it’s funny how this industry, in general, even investing, you know, Jim Rohn’s Zig Ziglar or Tony Robins, it seems like a very, a very common interests. And a, and Jim was definitely one of the, one of the top guys in terms of some of the books that you have read, whether it’s specific to the, you know, the Law industry or relay or a real estate or business in general.

Mauricio (45m 13s):

Yeah. So I think the one thing is one of my favorites talks a lot about focus and how everything, you know, and, and Darren Hardy and Jim Rohn talked about this all the time as well. It’s like, you know, everything is on an equal. If you have a, a a hundred things on your list, there’s only a few things that make the most difference. And that’s kind of what the one thing it really focuses on. There’s another great book called traction by Gino Wickman, who is more of a business that kind of had to start or, or really built an organization. So if your, a business owner and you are looking to sort of scale and put systems in place, that’s a great one. And then the E-Myth a, is another great book that talks about, you know, working on your business as opposed to investing, working in your business, which is what most people, most people have a job, they create a business, but they’re really just working in it.

Mauricio (45m 54s):

So the E-Myth is going on. I’m fortunate enough to have we’re going to where it is, but there’s an email for attorneys specifically. So I’ve read that, that problem that obviously doesn’t, but I think those three, the E-Myth a traction and I’m the one thing are probably the, the three books that I would recommend the most to drive. Mr. Mo, I know there’s others that I could probably rattle off at five more than I’d be like, Oh crap. I let that one out with the rich dad, poor dad would be probably I should, you know,

Jesse (46m 18s):

Can you just be made it mandatory reading for the kids? So in terms of something that you wish you knew at the beginning of your career that, you know, now,

Mauricio (46m 30s):

I wish I know if I sign to you, I wish I knew about real estate earlier and just start, like the best time to start real estate is 20 years ago. As Robert likes to say it, the best time to start jumping, investing in real estate was 20 years ago. And then the next best time is today. You know? So I wish that, that, that I’d been sort of brought up that I got into the game a little bit later than most. I didn’t really buy my first property until I was 30 in my thirties. So would have been nice to, to I, and I, and now, you know, I I’m in the personal development world, I see a lot of my friends are people will bring their like 17, 18 year old kids to the seminars and this stuff. And I’m like, wow, that will be, I got 17, 16, 17 year old kids that are buying a property thanks to their parents. So that that’s something I would have liked to have done earlier.

Mauricio (47m 12s):

And had I known that back then I would have started a lot.

Jesse (47m 15s):

That’s great. Now my personal favorite first car make and model, right?

Mauricio (47m 19s):

The first car I ever had was if you loved, this was a Hyundai XL, and this has been a Hyundai just came out. So this wasn’t like not good if you, if I don’t even know if you think of Hyundai now, it’s, it’s, it’s, it’s whatever, it’s a normal, when it came as a normal car, it was like a Pinto, like the thing was like made at a tin, like a tinfoil or something. And that’s when my dad, I shouldn’t complain. It was my dad’s car. It was a hand me down when I went to college, but that was my first car was a stick shift too. A Hyundai XL.

Jesse (47m 45s):

Yeah. Well, I, it was it a, I don’t know if he was Bloomberg or econ talked at one of the podcasts I’ve listened to it. That said it’s a, it’s a millennial security device having a stick car these days. I know. All right.

Mauricio (47m 56s):

No, I think, I think it, did he have a hydraulics, but it, it was a very, but I think that the car brand new was like six grand or something like that.

Jesse (48m 3s):

I really need a catalog that has, we’ve had some pretty, a pretty unbelievable cars over the last few months. So Mauricio where people will actually first lets talk a little bit about the book. First of all, the title of the book is fantastic. Maybe he could talk a little bit about where people can get it and what your goal was in, in writing it.

Mauricio (48m 22s):

Yeah. So the issue and it’s an ebook and I think I’m going to keep expanding in and maybe eventually to turn into like a hard copy or a hard cover, but it’s called the five things. Every syndicator must know to stay out of jail. And it started with like the, you know, I was doing a lot of content about the three biggest mistakes. And I think originally I wanted to do some of the three biggest mistakes and then I was kind of find more and more things to talk about it. And then I figured it the five things as a good number, because it also gives me a pretty much anything. We talked about it. I can sort of point towards one of those chapters because I think it kind of encompasses everything. So a So yeah. I started writing at the end of last year. It took me forever to finish it and then finally finished it, I think literally like in, in, in July or August of this year. And finally got it. And again, it’s just an e-book, but I think it gives everybody a good primer of not only all of the things that a syndicator should realize not to do, but also some, some, some, some guidance as to what to do or, you know, I, I, I believe strongly in you want better answers.

Mauricio (49m 14s):

You’ve just got to ask better questions, write a world-class answers, require a world-class question. So the question is how do I do something? And I can do this. I can’t do that. How do I do this? How can I pull this off? How can I accomplish this? And so I get some tips in there as the joint venture, is that a great example of like, well, how do we put together a deal? So it is a joint venture legitimately as opposed to security or how do I market it on Facebook so I can do with the legal so-and-so that’s kind of the thing. But so yeah, so five things, every single kid who was known to stay out of jail. And I’m going to share that with anyone.

Jesse (49m 43s):

I’m curious if it’s a, just a personal question on the writing of the book. How long did you think about writing a book before you actually put pen to paper?

Mauricio (49m 52s):

I’ve been thinking about it for a long time and I am not, I’m not even sure that to me, I always wanted to write a syndication book and that’s where I started it, but I CA I envisioned this book sort of evolving, I mean, right. I mean, look, there’s a lot of regs that just came out and the last month that if they pass will make one of the chapters up, so Lisa had to go back to their and rebuild it. Yeah. And the nice thing about eBooks is, you know, I don’t have to wait for a second addition or 30 years or so. I can literally come up with an idea and be like, Oh, wait a minute, let me add that to my ebook. I can put it in there. I can automatically put it back in there and if it’s done. So that’s kind of, my goal is to keep an eye out, but I’d been thinking about it a very long time. I think books in general are, are just great.

Mauricio (50m 32s):

You know, not only to, to, to show your level of expertise, obviously, although it is these days, you could do, you know, you know, social media and YouTube and we we’ve all got YouTube channels, but it just, from a marketing standpoint, I think it also is great. It’s like a business card. I use it as a business card. So instead of having somebody in a business card, your hand over a book, that’s, that’s, that’s really what I, that was one of the main things I, I looked into it.

2 (50m 52s):

All right, Maria. So where can people find you online, aside from your regular Google search?

Mauricio (50m 57s):

Yeah. So if like my YouTube channel, Maurice, your role on YouTube that I’ve got to, I tried to put as much content and as I can, there are a lot of videos. There are a website’s premierlawgroup.net. And if you want a copy of the book, just email at jail jail at Premier law group Danette, and that will automatically send you a copy of the, the, the five things. Every syndicator must have noticed they had a Jill and I did just get the URL, stay out of jail.com So but that’s not set up yet, but that’ll, that’ll be up and running pretty soon, but jail at Premier logged on that. And then that will come to me to an email. So that’s a good way to get a hold of me in the box.

2 (51m 29s):

My guest today has been Mariso Rauld where are you? So thank you for coming on working capital. Thanks, Jesse. I appreciate it. Thank you for listening to the working capital podcasts. My goal was to help individuals Break into real estate investing as well as educate experience investors. If you enjoy the show, please share with a friend subscribe and give us a rating on iTunes. It really helps us. If you have any questions, want to learn more or like me to cover a specific topic on the show, please reach out to me via instagram@jforgalsorheadtowwwdotjessefragale.com. My name is Jesse Fragale and I’ll see you back here for the next episode of the Working Capital The Real Estate Podcast.