How to Syndicate an Apartment Deal in Texas: A Sponsor Guide
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To syndicate an apartment deal in Texas, you form the deal LLC (or register an outside LLC with the Texas Secretary of State), raise under Rule 506(b) or 506(c), and file a Form D notice and fee with the Texas State Securities Board within 15 calendar days of your first Texas sale. Texas then adds a franchise tax on the LLC, its own tenant statutes and a property tax system based on yearly appraisals.
This is the Texas version of our general syndication guide. It covers what changes when the building, the investors or both are in Texas. It is general information, not legal advice.
What is the Texas Rule 506 notice filing?
Texas treats Rule 506 interests as federal covered securities, so it does not review the deal. It does want notice. Within 15 calendar days after the first sale to a Texas investor, you file the SEC Form D copy and the fee through the NASAA Electronic Filing Depository (EFD). The fee is 0.1% of the aggregate offering amount on the Form D, never more than $500 (DoorRaise's state data, from NASAA's fee schedule). Texas has no annual renewal. The full walk through, with a fee table and amendments, is in Texas Rule 506 notice filing; every state's fee is in blue sky fees by state.
How do you form the deal LLC in Texas?
A Texas LLC is formed by filing a Certificate of Formation (Form 205) with the Texas Secretary of State; the Secretary of State's published fee for it is $300. A sponsor who already has an LLC in another state does not need a new one: an LLC formed elsewhere that holds a Texas property registers by filing an Application for Registration of a Foreign Limited Liability Company (Form 304), published at $750. Most sponsors pick one entity per building. Choosing the state is covered in forming an LLC for a syndication and foreign qualification in the property state. Confirm fees on the Secretary of State fee schedule before you file.
What is the Texas franchise tax and does it hit the deal LLC?
Texas has no personal income tax, but it charges a franchise (margin) tax on most LLCs, including a deal LLC that owns an apartment building. The Texas Comptroller administers it, with a yearly report due May 15. Whether tax is due depends on revenue and a no tax due threshold the Comptroller publishes each cycle. The details and a worked example are in Texas franchise tax for an apartment syndication LLC.
What Texas landlord and tenant rules should a sponsor know?
Residential leases are governed mainly by Chapter 92 of the Texas Property Code, and evictions are filed in justice court under Chapter 24. Highlights: a landlord must return a security deposit within 30 days after the tenant surrenders the unit and give a written, itemized list of deductions (Property Code 92.103 and 92.104). Unless the lease says otherwise, a landlord who ends a tenancy for nonpayment gives a written notice to vacate at least 3 days before filing (Property Code 24.005). Texas law blocks cities from adopting rent control (Local Government Code 214.902), which is a practical difference from a state like California; see rent control laws for apartment investors. Your property manager should run these steps; the sponsor should know them well enough to check.
How does Texas property tax work when an apartment building sells?
Texas is a non disclosure state, meaning sale prices are not published, and appraisal districts value each property every year at market value. A sale does not automatically trigger a reassessment, but a new, higher price can show up in the district's next valuation. The deadline to protest a value is generally May 15 or 30 days after the notice is delivered, whichever is later (Tax Code 41.44). Underwrite taxes from the district's likely view of your purchase price and plan a protest. See property tax reassessment in apartment underwriting and appealing property tax on an apartment building.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings from their friends and followers under Rule 506(b) or 506(c), with verified accredited investors only. Investors fund by wire into escrow. By default DoorRaise files the property's state notice; on new deals, the first investor from another state pays that state's filing fee by card when they sign, and later investors from that state pay nothing. See pricing or how it works.
FAQ
Do I need a Texas LLC to buy a Texas apartment building?
No. You can hold the property in an LLC formed in another state, but it must register with the Texas Secretary of State as a foreign LLC. Many sponsors form the deal LLC in Texas to keep it simple.
When is the Texas notice due?
No later than 15 calendar days after the first sale to a Texas investor. It is one filing per offering, not one per Texas investor.
What does the Texas notice cost?
0.1% of the offering amount on the Form D, capped at $500.
Does Texas have a state income tax on syndication profits?
No personal income tax. The LLC may owe franchise tax, and investors in other states may owe tax at home.
Sources
- Texas State Securities Board: Regulation D filing requirements
- NASAA: Form D fee schedule
- Texas Secretary of State: business filings
- Texas Comptroller: franchise tax
- Texas Property Code, Chapters 24 and 92
- Texas Tax Code, Chapter 41
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.