The Gun Counter

Without getting into too much detail, it involves buying a piece of land and using conservation easement, interest deduction on the mortgage and current year business losses as tax pass throughs for wealthy investors needing tax credits and passive business losses to offset gains elsewhere. Then after 10 years, (limit on conservation easement credits) use part of the timber value to buy them out. They get a pile of tax advantages and a lump sum payment at the end. I get a large piece of land at the end and annual management fees for running it.

I have run the concept past my accountant who loves the idea.
I need to get it all worked up, get an official prospectus set up by an accounting firm, get a law firm to assemble the appropriate paperwork as well as set up the corp structure and fine print etc.

My accountant suggest that this phase will likely cost $75-125K. Then I need down payment and initial operating costs covered.

My question, how would you go about attracting the angel investor to put up the "set up" money, then once that is all together, how to go about attracting the qualified investors.

I can only have 5 investors or it becomes a REIT which is bad on MANY levels. But an "investor" can be a partnership, it just needs to be one tax ID number for the group. Meaning I can have 5 partnerships with 5 people in each. I just deal with 5 tax ID's, they deal with their own partnership agreements.

Suggestions?

A) This is a bit more than something your normal accountant is OK on -- contact a Tax Atty. And, if you're going to start soliciting investors, be prepared for SEC stuff.

B) This will eventually be shut down by the Feds, but, given DC's behavior, nothing wrong, IMO with exploiting a loophole while it exists.

I agree, I have to take this way beyond my normal accountant. But I don't have the $75K+ to put into an idea like this JUST to get it running much less to make it work.

Like most everything I do, I plan on doing it right.

The way I look at it, the more Obama raises taxes the better off this kind of idea is for those who need tax relief. LEGAL tax relief.

Do it wrong. Turn it into a money sink. The government will bail you out if you screw up.

your idea is neither unusual or novel. Which, by the way, is a good thing. That means it is well understood and (relatively) simple to define. My father used to do this with heavy equipment and ocean going tug boats, it is referred to as selling depreciation. Basically with equipment, what you are doing is buying a piece of equipment (usually something large like cranes and such) and sell it to the investors, you use the equipment and pay upkeep they get the depreciation. Once the item has fully depreciated, depending on depreciation schedule and equipment type, usually somewhere between 3 and 15 years (you have to go to tugs, container ships or similarly large and long term items to get to 15 years) you purchase it from them at the depreciated price or everyone sells it and y'all buy a new one and start the cycle over again.
That said, maybe it is novel, I can't recall hearing about this being done with land, but based on what you have outlined can't seen why it wouldn't work. Though you will not be selling depreciation per se. That said I am not an accountant or attorney so consult the pro's before you proceed.

The doing it on spec part is almost impossible for me now. Will spare you the sorted details.

And yes, if I can get round one up and running, I don't think round 2-10 would be too difficult. Do one a year and be "THE MAN" and end up owning SERIOUS ACREAGE.

I need to get my nose off the Chef grindstone and start doing some networking with the big money boys.

Chris, you are so right and thus the idea.

Just getting it to fruition...

Like I said, I have to get my nose out of working for someone else for a bit each week and work on my own idea and MAKE it work.