Question 1

Why do Texas syndicators prefer Series LLCs?

Accepted Answer

Texas Series LLCs allow operators to create multiple liability-protected "series" within a single entity. Each series can hold a separate property, keeping investors in one deal protected from liabilities in another. Texas adopted this structure in 2009 under Business Organizations Code § 101.601.

Question 2

What SEC compliance is required for Texas syndications?

Accepted Answer

Most Texas syndications operate under SEC Regulation D, typically Rule 506(b) or 506(c). You must file Form D with the SEC within 15 days of your first sale, plus a notice filing with the Texas State Securities Board ($300 fee). The Fort Worth SEC Regional Office oversees Texas.

Question 3

How do I verify accredited investors in Texas?

Accepted Answer

For 506(b) offerings, investors self-certify accreditation. For 506(c) offerings (which allow general solicitation), you must take "reasonable steps" to verify—typically third-party verification letters from CPAs, attorneys, or specialized services. FundFlow automates both workflows.

Question 4

What distributions do Texas multifamily syndicators typically pay?

Accepted Answer

Texas multifamily syndications commonly offer 6-8% preferred returns with profit splits (typically 70/30 or 80/20 in favor of LPs) after return of capital. FundFlow calculates waterfall distributions automatically based on your deal terms.

Question 5

What are the compliance requirements for raising capital in Texas?

Accepted Answer

Texas requires Form D notice filing within 15 days after first sale. The filing fee is $300, and processing typically takes 2-3 weeks. Texas also allows domestic Series LLC formation ($300 filing fee).

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