The Inner Circle
Code of Conduct & Ethics

Our Commitment to Our Community

The Inner Circle is the most ELITE community of Real Estate Investors. It consists of an exclusive and trained network of successful people who have varied skills and resources and who have the common goal of generating income and wealth for themselves and fellow members. Inner Circle members are encouraged, upon conducting proper due diligence and independent review, to leverage other members’ time, money and expertise to achieve their goals.

Inner Circle members have had to apply, go through a screening process and advanced training, and make a significant investment to join. Less than 30% of those who apply are accepted. To maintain and enhance the Inner Circle, members need to operate at a high standard of conduct and ethical behavior towards each other as well as persons outside the Inner Circle community.

This Inner Circle Code of Conduct & Ethics was created to establish these standards, and all members are required to abide by the following Code of Conduct & Ethics.¹

Definitions

Inner Circle Membership

Inner Circle Membership comprises access to Inner Circle Meetings at all REIAs and RENCs, access to all Love American Homes sanctioned Workshops, access to Big Dog Yahoo Groups, access to Big Dog Facebook Page, access to all events hosted by Love American Homes, and access to Canis Major Incubator Path to Sponsorship. Inner Circle Membership is valid for 1 year from the date when member joins the Big Dog Program. Upon expiration of the Inner Circle Membership, a renewal fee may be charged for renewal of Inner Circle Membership for a 1-year term.

Big Dog Membership

Big Dog Membership comprises access to online training tools such as REIMatcher and Canis Major Incubator website account, access to Residential and Commercial 12 Week Expeditions, access to coaches at the relevant Big Dog Membership levels that member has paid for, and membership to Canis Major Incubator for passive investing.

Canis Major Incubator Path to Sponsorship

Canis Major Incubator Path to Sponsorship is a training path in which members complete the online Commercial 12 Week Expedition which is followed by field understudy with experienced investors to progress from Commercial Big Dog to Acquisition Specialist to Co-Sponsor to Sponsor.

 

Code of Conduct and Ethics

 Member Representatives – Members agree to work together to maintain Inner Circle.

• Inner Circle members acknowledge and agree that they are representative members of the Inner Circle and have a responsibility to maintain the quality and reputation of the Inner Circle throughout Texas and the United States. Members agree that one of the primary obligations is to maintain the highest standard of ethical conduct pursuant to the rules and standards set forth herein.

Non-Circumvention – Member’s shall not circumvent other member’s deals, buyers or sellers

• Inner Circle members agree not to circumvent any other member’s (Lead Holder’s) leads. Members also agree to maintain the confidentiality of the Lead Holder’s leads, buyers, and sellers. Members shall not share Lead Holder’s leads or talk to any buyers or sellers whom they learn about from Lead Holder without Lead Holder’s express permission.
  
• If the other member gets the property under contract without permission from the Lead Holder and without providing the previously agreed-upon compensation to the Lead Holder, the other member will be in violation of the Code of Conduct.
• To remedy this violation, the other member either:
  • Pays the Lead Holder the previously agreed-upon compensation, or, if there is no previously agreed-upon compensation, to arrive at a compensation agreeable to both parties, or
  • Terminate the contract on the subject property and cease pursuit of the subject property.
• If the other member fails to perform either of the remedies, the member will be in violation of the Code of Conduct and will be subjected to the penalty of violating the Code of Conduct which includes revocation of Inner Circle and/or Big Dog Membership.
• All Inner Circle Members agree to take personal responsibilities when disclosing information on leads, understanding that, unless they perform the following, they put themselves at risk of financial loss:
  • Getting the lead under contract prior to sharing detailed information about the lead;
  • Having the other member sign a non-circumvention agreement;
  • Taking responsibilities in having discussion on compensation upfront and arriving at a compensation agreement. Inner Circle members should not expect to be compensated for any lead on which information is shared, but no prior discussion on compensation with the other member has taken place; and
  • Having a JV agreement (if appropriate).
• All Inner Circle members shall recognize that in many cases, deal parameters (ARV, repair costs, rents, etc…) change. Deals can get worse, profit can get less. In those instances, Inner Circle members must work together to renegotiate the compensation. If the deal parameters change, the other member has several options:
  • Renegotiate compensation agreement with the Lead Holder; or
  • Work with the Lead Holder to negotiate with seller for a lower sales price.
• If sales price cannot be lowered and both parties cannot agree on a compensation revision, the other member is required to terminate the purchase agreement with the seller. If the other member continues with the purchase transaction without coming to an agreement with the Lead Holder, the other member will be in violation of the Code of Conduct and will be subjected to the penalty of violating the Code of Conduct which includes revocation of Inner Circle and/or Big Dog Membership.
• If two or more members are working on the same lead because they independently developed the lead through their own marketing efforts, they can choose to compete or partner with one another on that lead. Once a lead is under contract, all other members shall no longer attempt to compete for that lead.
• If Lead Holder has executed a purchase agreement with the subject property’s owner and subsequently terminated the purchase agreement, the other member is free to pursue the subject property unless forbidden to do so by an active agreement between the other member and the Lead Holder.

Non-Disparagement – Members shall not disparage other members or Inner Circle founders

• Inner Circle members agree that they will not falsely malign, disparage, slander or in any other way adversely affect the reputation of any other member, or Inner Circle founders and their entities.  Nothing in this Code of Conduct & Ethics shall prevent any member from legally resolving disputes with other members or seeking the assistance from the founders of the Inner Circle to resolve any such disputes.
• Inner Circle members will not openly communicate about any disputes involving other members, or Inner Circle founders and their entities, in any forum, including but not limited to Yahoo groups, social media, and Inner Circle meetings.  All grievances will be kept private between the respective parties.

Non-Disclosure – Members shall protect other members’ proprietary resources

• Inner Circle members shall not give access to or copy Big Dog or Love American Home educational materials for any non-Inner Circle member without the express permission of the Inner Circle founders.
• Inner Circle members shall not share or disclose any other member’s proprietary training, contracts, marketing methods and/or resources without the express permission of that Inner Circle member.

Professional Conduct – Members shall treat others with high ethical standards

Inner Circle members shall not engage in unprofessional conduct, including but not limited to:

1. a departure from or failure to conform to applicable federal, state or local governmental rules and standards or, if no such rule or standard exists, to the minimum standards of what is reasonable and acceptable in business practice;
2. any conduct reasonably expected to deceive, defraud or harm another person; 
3. demonstrating a willful or careless disregard for the rights of others;
4. any practice that is contrary to ethical conduct appropriate to this profession;
5. knowingly aiding, assisting, advising, facilitating or conspiring with another to engage in conduct which, if conducted by an Inner Circle member directly, would constitute a violation of these rules;
6. making a false statement or knowingly providing false information to, or failing to cooperate with any investigation of the Inner Circle Association;
7. perform or cause to be performed any act which would tend to reflect poorly on or bring dishonor to Inner Circle members.
8. Unprofessional behavior at REIAs, RENCS, and other Love American Homes sanctioned events, including but not limited to, drunkenness, illegal drug use, and lewd behavior.

False Representation: – Members shall not mislead or misrepresent other members

• Inner Circle members shall not intentionally misrepresent any material fact in their business dealings with other members or members of the public.
• Inner Circle members agree to disclose any and all known information about any property to other members (whether they be potential buyers, sellers or partners) that may adversely affect the property value or that may cause a member any present or future hardship.
• Inner Circle members shall represent themselves only and shall not state that they represent the interests of another member of the Inner Circle to other members without the express permission of the other Inner Circle member.

Hold Harmless – Members shall hold harmless other members’ advice, training, introductions, recommendations, etc.

• Inner Circle members agree to hold harmless other members, Inner Circle founders, and their entities for offering advice, training, introductions, recommendations, referrals, etc., or for facilitating transactions that they are not personally a buyer, seller or sponsor of.
• Inner Circle members are responsible for completing their own “due diligence” related to all investment decisions, and they shall encourage others to do the same. Members also agree to use lawyers, CPAs, title companies, and other licensed professionals as appropriate to complete their transactions.
• Nothing herein shall create a duty over and above the duties owed under the common law, but nothing shall prevent a member from legally resolving disputes with other members who they voluntarily and knowingly choose to work with on any leads, referrals or transactions.
  • For example: If Bob introduces John to Mary in his Mastermind, and John does a bad deal partnering with Mary, Bob has no liability, although John can seek normal resolution, legal or otherwise, with Mary. If Sue introduces Jeff to a contractor that steals Jeff’s money, Sue has no liability.  

Non-Compete – If members directly compete with the Inner Circle, they may be asked to leave

• Inner Circle members shall not use the meetings, website or any other means to create a non-solicited distribution list of any kind. For purposes of this section, a non-solicited list could be defined, by use of example, as follows –

-passing a written list around for others to enter their contact information, or

-using a bowl, box or other collection device for people to drop their business cards in, or

-collecting contact info from the website or other methods where a member or non-member might think that the list is being created or cards are being collected for the Inner Circle, as opposed to some other use or organization.

• Inner Circle Members are encouraged to network with individuals and collect contact information personally for use in masterminding, creating marketing co-ops, and buying, selling, lending, or partnering on deals.
• Inner Circle members shall not attempt to coach other investors using Big Dog (or other Love American Homes or Phill Grove) materials unless previously approved in writing.
• The Inner Circle Association is expensive to create and maintain.  If a member promotes competing products and services to members and non-members that have not been previously approved by the Inner Circle founders, their Inner Circle and/or Big Dog Membership may be revoked without refund.

Raising Money for Deals – Members will raise money compliant to Inner Circle and SEC Guidelines

• Members CAN pitch their deals through live announcements, in the Inner Circle meetings, or over the online list-serv or private Facebook page, to other members, and offer investment opportunities, that do not utilize syndication (pooling of money from multiple investors).
  • Note: Members investing money are encouraged to only do first-lien secured loans or have title or partnership interest in properties being invested in.
• Members CANNOT pitch their deals through live announcements in the Inner Circle meetings, or over the online list-serv or private Facebook page, to other members, and offer investment opportunities, that do utilize syndication (pooling of money from multiple investors).
  • Syndicated deals are complex and have unique risks. Raising money for these deals falls under SEC regulations and Texas State Securities Board. The Inner-Circle will not be responsible for validating compliance to SEC or state regulations for deal syndications, beyond deals validated by the Board of Directors of the Canis Major Incubator.
  • As is done in REIAs, and other networks, Inner-Circle members CAN network within the group, develop individual relationships, and then solicit individuals to participate in their own syndicated deals.
  • Members CANNOT solicit investments into non-Canis Major Incubator deals for which they are not a sponsor.

Best Practices – Members are encouraged to engage in best practices when lending and partnering with one another on deals

• Inner Circle Members are encouraged, but not required, to follow the best practices attached as Exhibit A.  
• If an Inner Circle Member consistently fails to follow these practices, he/she understands that it may endanger themselves and/or other members and may be deemed to be incompatible with that person’s continued participation in the Inner Circle.
• Inner Circle Members acknowledge and agree that if their behavior endangers other members or is unacceptable in any way (based on the sole and exclusive discretion of the Inner Circle founders or representatives appointed by Inner Circle founders), Inner Circle and/or Big Dog membership may be revoked without refund.

Severability

If any provision of this Code of Conduct and Ethics is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Code of Conduct and Ethics shall not be affected or impaired.

By becoming a member of the Inner Circle, each member pledges to conduct his/her business in accordance with the Code of Conduct & Ethics contained herein. Each Inner Circle member acknowledges and agrees that complaints about the member by any other member, property owner, resident, or any other individuals, can lead to the revocation of Inner Circle and/or Big Dog Membership at any time for any reason without refund of their membership fees. Inner Circle members also acknowledge and agree that by signing this Code of Conduct & Ethics, such action does not create any liability or legal duties which would give rise to any theory for direct or indirect damages of any kind against the founders of the Inner Circle and their entities.

Exhibit A
Inner Circle Best Practices

• Inner Circle members shall put all agreements in writing before engaging in any work with another member. This shall include, but not be limited to, a joint venture agreement, contract, assignment agreement, or any other agreement between two members.
• Inner Circle members shall include provisions in their agreements pertaining to responsibility for all tasks, how money will be sourced, spent, and profits divided, and dispute resolution, including what to do in the event one party would like to leave the arrangement.
• Inner Circle members shall never market any property that they do not already have legal control over.
• Inner Circle members shall always seek the counsel of knowledgeable professionals for any issue about which they are not well-versed and shall only offer advice to other members to the limit of their experience.  
• Inner Circle members shall not request or receive an un-collateralized loan from another member.  All loans between members shall include both a promissory note and a deed of trust secured by real property.  All other terms can be fairly negotiated. We strongly recommend first liens only.
• Inner Circle members shall not give someone a loan secured by a pre-existing homestead (Texas has very stringent and complex laws regulating loans on existing homesteads).
• Inner Circle members shall always obtain a non-homestead affidavit before giving a loan (so that the owner cannot later say it has become a homestead and the lender is not protected in the event of a bankruptcy).
• Inner Circle members shall always require (and verify) that the borrower pays property taxes and maintains insurance on the property (to protect you as the lender).
• Inner Circle members shall do their own due diligence on a deal before providing any loan. This shall include completing your own: CMA, title search, repair calculations, inspection, survey review, inventory analysis, and all other due diligence deemed necessary.
• Inner Circle members shall make sure the lender is listed in the mortgagee clause as the lender.
• Inner Circle members shall always require that the borrower maintains the property (this is typically already included in a promissory note, created by your closing attorney).
• Inner Circle members shall not defer all loan or interest payments until the end of the project.
• Inner Circle members shall never give the borrower all the repair money up front. Inner Circle members shall create a draw schedule and verify that work has been done prior to disbursing each draw payment (otherwise the borrower may not use the money for the renovation and/or may not manage the renovation properly).
• Inner Circle members shall carry out due diligence on prospective business partners prior to partnering on deals. Due diligence includes, but not limited to, checking background and track record of prospective business partners, checking if prospective business partner is an active Big Dog by identifying if prospective business partner is a member of the Big Dog Facebook page.
• Inner-Circle members will always do their own due diligence before investing in any residential or commercial deal.
• Big Dog coaches can help provide advice for vetting of residential deals.
• Canis Major Incubator can help provide advice for vetting of Canis Major hosted commercial deals.
• Big Dog Coaches and Canis Major Incubator cannot provide advice for vetting of any non-Texas based deals, or any non Canis Major hosted commercial deals.
• If Big Dog coaches or the Canis Major Incubator are asked by Inner Circle members for advice on investing in any non-Texas based deals, or any non Canis Major hosted commercial deals, their position will be: “We cannot recommend investing in these deal, vet these deals, or provide advice on investing in these deals”.
• If an Inner Circle member (lead holder) has to share information about a lead with another member, regardless of whether the lead is already under contract, the lead holder shall send the other member an email Notice of Potential Collaboration that includes the following:
  • Reference to the subject property on which prior discussion took place (eg. Address or name of property);
  • A reminder to the other member of non-circumvention as stated by this Code of Conduct; and
  • A statement stating that both parties agree to work out a fair compensation agreeable for both parties in this collaboration. It is the responsibility of the Lead Holder to state the desired compensation for the lead holder, and it is the responsibilities of both the Lead Holder and the other member to negotiate and arrive at a compensation that is agreeable by both parties.
• Even if this Notice of Potential Collaboration is not communicated by the Lead Holder, the Non-Circumvention section of the Code of Conduct remains applicable.

 

Exhibit B
Big Dog Partner Policy

One of the many privileges of being a part of the Big Dog is being able to share all the great benefits of the Program with your family and your business partner by bringing them on as Partners. This includes EVERYTHING – from the Big Dog 12 Week Expedition to all the coaching calls to all the free workshops to gaining access to the networking meetings.

This Partner Policy provides certain relevant definitions and describes the rules on bringing on Partners to your Big Dog membership.

Definition

A Partner falls under 2 categories:

• Immediate Family
• Business Partner

Immediate Family

• Parents and children only

Business Partner

• Anyone who is not an Immediate Family, who has entered into a formal agreement (eg. LLC) with you to operate a business

Partner Policy

• You may register Immediate Family Partners at any time. There is no time constraint for that. You may register up to 4 (four) total Immediate Family Partners.
• You have up to 1 (one) year from the date of your enrollment into Big Dog to register a Business Partner.
• You may register no more than 1 (one) Business Partner and you cannot change your Business Partner after that initial selection
• You may register 1 (one) Business Partner and an unlimited number of Immediate Family Partners
• All Business Partner and Immediate Family Partners need to attend a Big Live Event (three day training) in order to gain access to the privileges of the Big Dog membership
• For Business Partner, proof in the form of the LLC’s Certificate of Formation stating the names of the partners is required. Other proof may be accepted on a case by case basis
• All partners, Business and Immediate Family, are required to acknowledge the Big Dog Code of Conduct
• Registration of a Business Partner is final, no change of Business Partner is permitted
• Chose your Business Partner wisely as their actions can affect your reputation and continued membership in the Big Dog Program

¹The rules set forth herein do not undertake to define standards of civil liability for members. Violation of a rule does not give rise to a private cause of action, nor does it create any presumption that a legal duty to a fellow member has been breached.