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:
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
=
General
Partner
Investors
=
Limited
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
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Viable Model: The COMMUNITY LAND
TRUST
Findings: CLT Residential Owners
Thank you.
LSLS Fordham Team