Once you venture beyond people you know well for a real estate business venture you could be deemed to sell securities. Selling securities are supervised by the various security commissions, one per province, following various National Instruments (NI).
You need an OM to offer investments outside the allowed exemptions under NI 45-106, namely: friends & family, close business associates, accredited investors and minimum acquisition cost (over $150,000) i.e. to eligible investors.
To offer investments to accredited investors (or the other 3 groups) you do not need an OM.
An accredited investor is one with financial assets over $1M [ which EXcludes their principal residence] or an income over $200,000/year or $300,000 as a couple [plus various other groups like banks or firms that are controlled by accredited investors]
Rules differ slightly by province. It is strictest in Ontario.
This is NOT legal, financial or investment advice. It is an (informed?) opinion !
An OM costs between $20,000 to $40,000 to produce depending on complexity, lawyer and your own experience.
Related post here:
http://myreinspace.com/forums/p/14541/73357.aspx?#73357
