b'undertherealestateoperatingcompany(REOC)exemption.This exemption is only available when at least fifty percent (50%) of the assets owned and operated by the issuer are directly owned real estate assets. What does this mean for fund of funds issuers? There is a 25% limit on the percentage of interests in your fund of funds that may be raised from self-directedretirementplaninvestors(suchasself-directedindividual retirement accounts or 401k plans, or pension plans). Make sure you keep trackofthepercentageinterestsinyourfundoffundsownedbyyour pension fund investors and dont exceed this limit. As in any regulatory framework,therewillbepenaltiesfornon-compliance,whichcouldbe severe.Dont Lose Sight of Your True Objective When considering whether to create a fund of funds so you can be a capital raiser for others, consider your original objectives.1.Did you learn about real estate syndication because you wanted to buy and syndicate real estate with your own asset management team; or 2.Did you learn to syndicate real estate so that you could manage other peoples money?If the latter, go take a test, become an investment adviser, and give up your dreams of syndicating real estate. If the former, you should view a fund of funds as a stepping stone that can tide you over until you find your own properties to buy, with your own asset management teamnot as your ultimate business model.146'