✍️ By Debbie Balfour | WBN News | November 11, 2025 | Click HERE for your FREE Subscription to WBN News and/or to be a Contributor.

When it comes to raising money for real estate projects, passion and great deals aren’t enough; compliance is what protects your business.

Too many new investors jump into raising capital without understanding the legal side. They post “looking for investors” on social media, make promises of returns, or share opportunities without proper documentation. While the intentions may be good, these actions can cross legal lines that carry serious consequences.

If you’re raising funds, whether it’s $50,000 or $5 million, you are likely dealing with securities laws. And knowing how to navigate them isn’t optional; it’s essential.

What Counts as a Security?

A “security” isn’t just a stock or bond. In real estate, it often refers to any investment where people contribute money with an expectation of profit, based on their efforts.

That means if someone gives you capital for a project and expects you to handle the management and returns, you’re likely issuing a security. And that means you must comply with securities regulations, or qualify for an exemption.

  1. Joint Ventures (JVs) — When two or more active partners collaborate, sharing both work and profit. Each person has an active role. JVs can be exempt from securities laws if all parties truly participate in decision-making.
  2. Limited Partnerships (LPs) — A popular structure for syndications, where general partners (GPs) manage the deal and limited partners (LPs) invest passively. LPs are protected from liability but have no control.
  3. Corporations or Share Structures — Investors receive shares in a company that owns property. This formal structure must follow corporate and securities laws.
  4. Mutual Fund Trusts or Investment Funds — Complex, regulated structures that allow investors to use registered funds (RRSPs, TFSAs, LIRAs). Ideal for large-scale capital raises but costly to set up and maintain.
  • Publicly advertising for investors without proper registration or exemption.
  • Promising guaranteed returns is a major red flag in securities law.
  • Skipping formal agreements because the investor is a “friend or family member.”
  • Ignoring compliance reporting requirements after the deal closes.

Work With Professionals Who Know the Rules

Always work with a securities lawyer, real estate attorney, and accountant who specialize in capital raising. They’ll help you determine the right structure, ensure proper filings, and protect you from future legal issues.

Compliance might seem intimidating, but it’s what separates professionals from amateurs. When investors see you’ve done things legally and ethically, it boosts confidence and helps you raise more capital long-term.

Protect the Dream You’re Building

Your reputation is your greatest asset. One misstep can damage years of hard work and credibility. Raising capital the right way isn’t just about following the law; it’s about earning trust.

So slow down, structure correctly, and let compliance become your competitive advantage. Because smart investors don’t just raise capital, they raise it the right way.

Debbie Balfour | Real Estate Investing Success Coach + Podcast Host
📍 Website: www.DebbieBalfour.com
📧 Email: Debbie@DebbieBalfour.com
🔗 LinkedIn: Debbie Balfour
▶️ YouTube Channel: youtube.com/@DebbieBalfour
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TAGS: #Real Estate Investing #Raising Capital #Securities Law #Compliance #Joint Ventures #Limited Partnerships #WBN News Langley #WBN News Okanagan #WBN News Abbotsford #Debbie Balfour

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