The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
For wealth managers that want to break into the real estate direct investments space, having an excellent team around you is critical. A securities attorney team, a deep compliance team, and other professionals will ensure you’re able to properly vet sponsors on every platform. A high level of due diligence is required that one simply can’t be expected to take on themselves.
Richard Wilson: What insights do you have for all of those wealth advisors out there that don’t do any real estate direct investments with their clients, you’ve gone down this road now for several years with dozens of clients, what insights could you share for those wealth managers listening who want to go down that same route perhaps?
Dr. Forrest Bryant: Yeah, great, there’s not that many RIAs that really take the risk of putting alternatives and there’s a reason for that. You know having, we’re FINRA registered right now, I know we just talked about SE registration, going through that process now I’d say if there’s other wealth managers out there that want to get into this space you’ve really got to have a really deep compliance team, whether that’s in-house or outsourced, you’ve got to have an incredible securities attorney team. You know, when we first started doing this there weren’t a whole lot of questions about, you know, how do we do due diligence? But now every time we have to do new registration it’s how do you vet these? What’s your due diligence process? What’s your ongoing due diligence process? And so you’ve got to have a whole system in place in order to vet sponsors and investments to put them onto your platform. And, you know, when we first started, we really didn’t have those questions, but it’s every state, every state’s security organization has those questions now and of course FINRA and SEC have those questions now so you’ve got to be ready for – it’s way different than, you know, working with publicly traded companies that are listed. It’s totally different and so you’ve really got to be prepared for a much higher level of due diligence.
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