How to Syndicate an Apartment Deal in South Dakota

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

To syndicate an apartment deal in South Dakota, you form the deal LLC (or register an outside LLC with the South Dakota Secretary of State), raise under Rule 506(b) or 506(c), and file a Form D notice with a $250 fee through NASAA's EFD within 15 days of your first South Dakota sale; after 15 days DoorRaise's state data lists a $275 late fee. South Dakota has no personal income tax, so investors generally do not file a South Dakota return for the deal's income, but property tax carries more of the load.

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

What is the South Dakota Rule 506 notice filing?

South Dakota 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 Division of Insurance securities regulation in the South Dakota Department of Labor and Regulation. DoorRaise's state data, from NASAA's fee schedule, lists the fee as $250, and a $275 late fee if the notice comes more than 15 days after the first sale in the state. 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 South Dakota?

A South Dakota LLC is formed by filing Articles of Organization with the South Dakota Secretary of State; the published online fee is $150. Each year the LLC files an annual report, with a $50 fee online, by the end of its anniversary month. An LLC formed elsewhere that will own South Dakota property registers as a foreign LLC. Confirm fees with the Secretary of State before you file. See forming an LLC for a syndication and keeping the LLC in good standing.

South Dakota's landlord and tenant law is SDCL chapter 43-32. A security deposit generally cannot exceed one month's rent, and the landlord returns it, or a written statement of what was kept, within two weeks after the tenancy ends, with an itemized list within 45 days if the tenant asks (SDCL 43-32-6.1 and 43-32-24). Evictions run through a forcible entry and detainer case under SDCL chapter 21-16 after a written notice to quit. Your property manager should use South Dakota forms.

What does South Dakota charge when an apartment building sells?

South Dakota charges a real estate transfer fee of $0.50 per $500 of value, usually paid by the seller. Put your share in sources and uses.

How does South Dakota property tax work for an apartment building?

South Dakota assesses property at market value each year, and with no income tax, property tax funds most local services. Non-agricultural property, including apartment buildings, is taxed at a higher school levy than owner-occupied homes. Owners can appeal to the local board of equalization each spring. Underwrite taxes from your price and the non-owner-occupied levy. See property tax reassessment in apartment underwriting.

Does South Dakota tax the deal LLC or its investors?

South Dakota has no personal or corporate income tax, so investors generally do not file a South Dakota return for the deal's income. The state relies on sales tax and property tax instead. 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; 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 South Dakota Rule 506 notice fee?

$250, per NASAA's fee schedule. EFD shows the final amount before you pay.

Is there a South Dakota late fee?

DoorRaise's data lists a $275 late fee if the notice comes more than 15 days after the first South Dakota sale.

Do investors owe South Dakota income tax on the deal?

No. South Dakota has no personal income tax.

How fast must a South Dakota landlord return a deposit?

Within two weeks after the tenancy ends.

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.