Subject: File No. S7-26-07
From: James M Walsh
Affiliation: CEO and Principal, BD

December 17, 2007

File No. S7-26-07

General:

The exemption proposed is unnecessary and will create more problems than it solves.

A system for compensating real estate professionals already exists, its call a Series 22 license with a registered BD.

Regulation D offerings:

BDs RRs warrant compliance with Finra/SEC rules regulations. If BDs RRs are wrong, or guilty of misrepresentation, they are penalized/lose their licenses. Real Estate Professionals bear no such requirement/liability, there are no penalties for wrong doing under whats proposed and there is no jurisdiction by the SEC or Finra and there is no one to police them. It will become the wild west and investors will suffer.

Furthermore, if sponsors pay the RE Professional and the RE professionals violate Regulation D, investors can rescind, the offering gets unwound and investors get stuck with a monster tax bill (for not completing their exchanging). RE Professional warrant no such compliance and bear no liability under the proposed system. And, even if they did, there would be no one to verify or police such a warranty.

Solution:

Reverse portions of NASD member notice 05-18 and allow RRs to reduce their commissions and let the client pay the RE Professional directly for advise (much like a CPA or attorney as consultants). A contract is required under the system proposed anyway. The relationship remains between the client and the RE professional and defines what services are provided and what they are worth. It also leaves it up to clients to determine if the RE professional is qualified, given the type, location and risk profile of the property the client is interested in.

Qualifications:

Qualification requirements should be well defined and whats proposed is not.

Where would the RE professional need to be licensed? In the state where the client is located or in the state where the property is located? Many TICs are located across the country. A RE professional in one state is not necessarily qualified to analyze property in states where they have no experience. Again, leaving it up to the client to determine who is qualified to assist them is a decision clients are accustomed to.

Buyers Agent Agreement:

The agreement should be delivered before a RE Professional presents a TIC to an investors, not simply at closing. RRs are required to be licensed in a state before talking to clients about TIC, why shouldnt a RE Professional have an agreement in place first? Also, the agreement does not need to be exclusive. Just because a RE Professional shows a client one TIC does not mean they should be paid on anything the client purchases, regardless of services provided.

Obligations of the BDs and Lead Placement Agent

All of these obligations are already in place and then some. There is no need to repeat them in incomplete form here.