Now, you’re outside of the capsule after re-entering. Your investors have gotten money. All is good with the world. Is it time to party? Sure, it’s time to celebrate… but you’ve got to get to the party first! And to do that, you need to go through a closing, just to make sure that every single thing is wrapped up neatly, so that when you go into your next syndication, you don’t need to worry about anything from the previous one.
The first thing I like to do is build a collection of paperwork that has everything in it. That way, it’s all in one place. Property management and asset management are consolidated. I document any votes that were taken. I’ve got total evidence of what’s been done and all actions taken.
Next, like we talked about on the final distribution, you talk to your accountant, getting everything set up to do the final taxes. That way, there’s no ambiguity; it’s just either done, or it’s going to get done. It’s already in the works, and they have all the numbers they need.
Then, collect any costs for the pre-pay and closing. Also communicate to the property manager, making sure everything is caught up, all the taxes are paid, all the bills are paid, and statements to all the investors are sent as part of that final distribution. This way, they have it for their records, and you show up like a pro, doing what a fiduciary does.
After disbursement of the funds, when there are no checks that are still outstanding, close the bank account. Close everything with the state so there are no more ties. Sometimes dissolving a corporation might be necessary, though this is deeded by the state government. I have found that there’s not any actual penalty to dissolving it or not, but it’s better to do it than to not do it.
The last step is to communicate again to your investors. Send them thank you gifts, like a nice framed photographs of the property. This is a simple way to say thank you for investing with us and trusting us with your money. I hope you are satisfied with what we’ve done with you. I can’t wait for you to join us on our next syndication.
And with that, it’s closed. You’ve done it! That’s your first syndication.
Are you ready to get started with your own syndication and need a private placement memorandum? Moschetti Law Group is a real estate syndication law firm and we’d be happy to meet with you to put together your Reg D PPM from a syndication attorney and guide you through the process of launching your own offering.
You Are Here: Winding Up the Real Estate Syndication
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