How to Syndicate an Apartment Deal in Michigan

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

To syndicate an apartment deal in Michigan, you form the deal LLC (or register an outside LLC with the Department of Licensing and Regulatory Affairs, LARA), raise under Rule 506(b) or 506(c), and file a Form D notice with a $100 fee through NASAA's EFD. The Michigan detail that most often breaks an underwriting model is property tax: under Proposal A, a building's taxable value is capped while one owner holds it, then uncaps the year after it sells.

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

What is the Michigan Rule 506 notice filing?

Michigan 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 securities program in LARA's Corporations, Securities and Commercial Licensing Bureau. DoorRaise's state data, from NASAA's fee schedule, lists the fee as $100. File within 15 days of the first sale to a Michigan 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 Michigan?

A Michigan LLC is formed by filing Articles of Organization with LARA; the published fee is $50. Each year the LLC files an annual statement, due February 15, with a $25 fee. An LLC formed elsewhere that will own Michigan property applies for a certificate of authority as a foreign LLC. Confirm fees on LARA's site before you file. See forming an LLC for a syndication and foreign qualification in the property state.

Michigan's security deposit law (MCL 554.601 and following) caps a deposit at one and a half months' rent. The landlord must give the tenant written notice of where the deposit is held, and must send an itemized list of damages within 30 days after the tenancy ends; a landlord who misses the deadline loses the right to keep any of it. For unpaid rent, a landlord serves a 7 day demand for possession before filing a summary proceedings case in district court. Michigan law also bars local rent control. Your property manager should use Michigan forms and follow the deposit notice rules exactly.

How does Michigan property tax work when an apartment building sells?

Under Proposal A (1994), a property's taxable value can rise each year by no more than inflation or 5%, whichever is less, while the same owner holds it. In the year after a transfer of ownership, taxable value uncaps and resets to the state equalized value, which is 50% of true cash value. For a building held a long time, that reset can raise the tax bill sharply. The buyer must file a Property Transfer Affidavit within 45 days. Underwrite taxes off the uncapped value, never the seller's bill. See property tax reassessment in apartment underwriting and appealing property tax on an apartment building.

What does Michigan charge when a building sells?

Michigan charges a state real estate transfer tax of $3.75 per $500 of value and a county transfer tax of $0.55 per $500, usually paid by the seller. Confirm who pays in your purchase contract and put any share you owe in sources and uses.

Does Michigan tax the deal LLC or its investors?

Michigan has a flat individual income tax and taxes income earned in the state, and a partnership may need to withhold for nonresident partners or file a composite return. Detroit and some other cities levy a city income tax. 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 Michigan Rule 506 notice fee?

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

When does a Michigan LLC file its annual statement?

By February 15 each year.

Why did taxes jump the year after we bought?

Taxable value uncaps after a transfer of ownership and resets to the state equalized value.

How large can a Michigan security deposit be?

At most one and a half months' rent.

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.