In the request for information, the agencies said deals would ideally involve packages of properties ranging in value from $50 million to $1 billion.
Get capital to get qualified to participate in the federal government housing bulk sale give-away that may take place in 2011.
How to raise enough capital to qualify to bid?
To dispose of the houses:
rent what can be rented
sell those that have land value
rehab a few
scrape off the remainder
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To avoid getting investments that would require investor to be a "qualified investor", make each investor an part owner. According to this chart, a C corp allows for: unlimited owners, foreign owners, corporate owners, may issue stock (S corp may also do this). LLC may do all of these except issue shares of stock, and LLC does not need an annual meeting.
C corps may have multiple classes of stock.
S corp limited to 75 shareholders.
LLC owners can distribute profits as they see fit.
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Actual proposal document.
Excerpts from article by National Multi Housing Council:
As of July 1, the federal government owned approximately 250,000 houses foreclosed on by Fannie Mae, Freddie Mac and the FHA. This represents approximately half of all unsold, repossessed properties. (Barclays Capital estimates another 830,000 houses are in some stage of foreclosure).
The most likely scenarios involve allowing investors and non-profits to purchase bulk properties if they agree to rent them out for some period of time.
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Make sure investors/partners agreement does not violate securities laws.
SEC says this will be sale of security:
rental pool agreement;
requires purchaser of single property to rent for certain amount of year;
requiring exclusive rental agent for a single property;
restricting occupancy or rental of a single property.
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