Nic McGrue is the founder of Polymath Legal PC, a boutique law firm focused on helping real estate investors lawfully raise capital through syndications. With over a decade of experience and licenses in California and Washington, Nic specializes in securities law and real estate partnerships. He’s also a tenured business law professor who brings both legal and practical insight to every client, helping them raise money legally while protecting themselves and their investors.
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Key Takeaways
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If you’re raising capital from passive investors, you’re selling securities—understanding exemptions like Reg D (506b/506c) is critical.
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Regulation D allows unlimited capital raising and is more practical and economical than Reg A or going public.
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The PPM (Private Placement Memorandum) isn’t just for disclosure—it’s also legal protection for both syndicators and investors.
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Disclose every risk that could impact a deal—even if it sounds scary. Transparency builds trust and legal protection.
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When things go wrong, consistent communication with investors can reduce legal risks and preserve relationships.
Topics
How to Legally Raise Capital for Real Estate
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Most syndicators use Regulation D exemptions to avoid the complexity of going public.
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Reg D has two primary options: 506(c) for accredited investors with general solicitation, and 506(b) for known investors including up to 35 sophisticated but unaccredited individuals.
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Knowing which exemption to use depends on your network, capital goals, and communication strategy.
Understanding the PPM and Why It Matters
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The PPM outlines who you are, what the deal is, and what could go wrong.
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Disclosing all risks protects the issuer—lack of disclosure can trigger SEC scrutiny and lawsuits.
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If the document sounds “too safe,” that’s a red flag. A realistic PPM should include worst-case scenarios.
What to Do When a Deal Goes Sideways
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Communicate early and often. Most lawsuits stem from silence—not poor performance.
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Call investors before sending bad news in writing. Set expectations before outcomes shift.
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When necessary, hire litigation counsel, but don’t wait to start investor conversations.
Best Practices for Operator Partnerships
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Vet your potential partners: are they filling a true strategic role or just a task you could outsource?
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Build detailed operating agreements like prenuptial contracts—define roles, expectations, equity, and exit plans.
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Align on contributions, decision-making, and conflict resolution before launching your business together.
Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here.
Round of Insights
Failure that set Nic up for success: After graduating law school in 2009, Nic lost a job offer due to the recession. That setback led him to launch his firm earlier than expected—an unplanned move that shaped his current success.
Digital or mobile resource: Notion – Used to track daily to-dos, long-term goals, team communication, and even household systems.
Book recommendation: Limitless by Jim Kwik – A foundational read on breaking mental barriers and unleashing your full potential.
Daily habit: Meditation or walking as a form of mental reset—critical for slowing down and managing the chaos of entrepreneurship.
#1 insight for protecting yourself legally in real estate: Get a great attorney. Legal guidance is your first and best layer of protection.
Favorite restaurant in Inglewood, CA: Stuff I Eat.
Next Steps
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Learn more at polymathlegal.com
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Check out Nic’s previous episode on Multifamily Insights
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If you’re raising capital, start with clarity: know your exemption, disclose all risks, and build investor trust from day one
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Don’t skip the PPM or your operating agreement—they’re critical tools, not formalities
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