How to Syndicate an Apartment Deal in Illinois

On this page

What is the Illinois Rule 506 notice filing?
How do you form the deal LLC in Illinois?
What Illinois landlord and tenant rules should a sponsor know?
What does Illinois charge when an apartment building sells?
How does Illinois property tax work for an apartment building?
Does Illinois tax the deal LLC or its investors?
How DoorRaise fits in
FAQ

To syndicate an apartment deal in Illinois, you form the deal LLC (or register an outside LLC with the Illinois Secretary of State), raise under Rule 506(b) or 506(c), and file a Form D notice with a $100 fee through NASAA's EFD. Most of what makes Illinois different is local: Chicago has its own tenant ordinance and a large city transfer tax, and Cook County assesses property on its own three year cycle at a different ratio from the rest of the state.

This is the Illinois version of our general syndication guide. It covers what changes when the building, the investors or both are in Illinois. It is general information, not legal advice.

What is the Illinois Rule 506 notice filing?

Illinois treats Rule 506 interests as federal covered securities and asks for a notice: a copy of the SEC Form D and the fee, filed through the NASAA Electronic Filing Depository (EFD) for the Illinois Securities Department, part of the Secretary of State's office. DoorRaise's state data, from NASAA's fee schedule, lists the fee as $100. File within 15 days of the first sale to an Illinois investor. EFD shows the exact amount before you pay, and that amount wins. See blue sky notice filings and blue sky fees by state.

How do you form the deal LLC in Illinois?

An Illinois LLC is formed by filing Articles of Organization with the Illinois Secretary of State; the published fee is $150. Each year the LLC files an annual report, with a $75 fee, before the first day of its anniversary month. An LLC formed elsewhere that will own Illinois property applies for authority as a foreign LLC. Confirm fees on the Secretary of State's site before you file. See forming an LLC for a syndication and foreign qualification in the property state.

The Illinois Security Deposit Return Act applies to buildings with 5 or more units. A landlord who keeps any of the deposit must send an itemized statement of damages within 30 days after the tenant moves out, and return the rest within 45 days. Landlords of 25 or more units in one building or complex must also pay interest on deposits held more than six months (the Security Deposit Interest Act). For unpaid rent, a landlord serves a 5 day notice before filing an eviction. Illinois law preempts local rent control. In Chicago, the Residential Landlord and Tenant Ordinance (RLTO) adds strict deposit, interest and disclosure rules with heavy penalties for small mistakes, so a Chicago deal needs a manager who knows it well.

What does Illinois charge when an apartment building sells?

Illinois charges a state transfer tax of $0.50 per $500 of value, and counties add $0.25 per $500. Chicago adds a city real property transfer tax that is far larger, usually paid by the buyer, plus a smaller transit portion usually paid by the seller. Several suburbs have their own transfer taxes too. Check the city where the building sits, and put your share in sources and uses.

How does Illinois property tax work for an apartment building?

Outside Cook County, property is assessed at one third of market value, and counties reassess every four years. Cook County assesses residential property, including apartments, at 10% of market value and reassesses one third of the county each year, so each area is reset every three years; income property owners may be asked for rent rolls and expenses. A state equalization factor then applies before local rates. Illinois property tax rates are among the highest in the country, so taxes are often the largest operating expense. Underwrite taxes from the value you expect at the next reassessment and plan an appeal where the numbers support one. See property tax reassessment in apartment underwriting and appealing property tax on an apartment building.

Does Illinois tax the deal LLC or its investors?

Illinois taxes income earned in the state and also charges partnerships a replacement tax on their income. A partnership may have to withhold for nonresident partners or file a composite return. Ask your CPA early; the investor side is in state tax returns for nonresident syndication investors.

How DoorRaise fits in

DoorRaise helps sponsors raise equity for apartment buildings from their friends and followers under Rule 506(b) or 506(c), and verifies that every investor is accredited before they sign. Investors fund by wire into the deal's escrow account at Enterprise Bank & Trust. By default DoorRaise files the notice in the property's state; on new deals, the first investor from another state pays that state's filing fee by card when they sign, later investors from that state pay nothing, and the sponsor never fronts it. Sponsors pay a $1,500 setup fee (non-refundable) and a flat $5,000 a year administration fee; see pricing or how it works.

FAQ

How much is the Illinois Rule 506 notice fee?

$100, per NASAA's fee schedule. EFD shows the final amount before you pay.

What does an Illinois LLC file each year?

An annual report, with a $75 fee.

Does the Chicago tenant ordinance apply to my building?

It applies to most rental units in Chicago. A few small owner-occupied buildings are exempt; check with your attorney.

How often is a Cook County building reassessed?

Every three years, by area.

Sources

This article is general information as of November 2026, not legal, tax or investment advice. State laws and fees change: confirm with the state agency and your own attorney before you file. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.