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

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

Cooperative Not-For-Profit

• r

The Principal Corporation as a:

Cooperative Not-For-Profit

• r

Because neither a Cooperative nor a Not-For-Profit can distribute dividends, REIC would need another investment entity.

but

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:

Limited Partnership

NYC REIC = General Partner Investors = Limited Partners

• 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