Going through the process of raising capital for the deals that we plan can become a long and arduous process, especially when we’re new to the business. With the Private Placement Memorandum (PPM) there are so many details leading to even more unanswered questions — how do you fill out this document? Or, what does that question mean?
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Today on the show we are joined by Gene Trowbridge. Whether you are an operator or passive investor, Gene will be able to give you a better understanding of not only what you are looking at, but essentially what you are looking for as well. Gene is the founding partner of Trowbridge Law Group LLC and has done both sides of the business, which allows him to understand the processes involved extremely well. He is a CCIM senior instructor and has won numerous awards as well as authored a book, called It’s a Whole New Business — definitely a book you want to have on your shelf! Today’s episode is filled with insights, walk-throughs, top tips, and more. So have your notes ready and stay tuned as we review the details of a PPM!
Key Points From This Episode:
- Gene puts forth a sample set of documents that he also will demonstrate.
- We talk through the summary document — all the disclaimers.
- Gene explains the minimum and maximum parameters, and the time frame in an offering.
- The do’s and don’t’s of a PPM.
- Why you put investor limits in your offerings and the Bad Actor Questionnaire.
- What the manager is allowed to do with regards to the offering.
- Gene touches on the suitability standards part of the document package.
- How to define an accredited investor.
- The difference between Class A and Class B members.
- Gene talks about voting rights and how they are navigated.
- We go over the Operating Agreement document.
- Sources and Uses of Capital: How to tell the investor exactly how the money is being spent.
- Distributions: How cash will be distributed.
- Manager fees: How they will be paid.
- Conflicts, duties, and risks.
- Gene highlights some sections that are a must-read in a PPM.
[bctt tweet=”There are a lot of different Private Placement Memorandums out there, every attorney has their own craft. Their own art. If this were a science, there would be one Private Placement Memorandum for the entire world, but there isn’t. However, Guide Five tells the attorney how to draft the offering documents — a PPM for real estate investment. — @GeneTrowbridge ” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Gene Trowbridge
As the founding partner of Trowbridge Law Group LLP, Gene’s law practice concentrates on the syndication of commercial and investment real estate, through both debt and equity, representing over 400 clients. The median offering size is $2,000,000. His practice writes offerings under Rule 506b and 506(c), of Regulation D. As a former syndicator, who for ten years raised investor capital through the broker-dealer community, he is able to communicate with his clients on both the technical and the practical aspects of state and federal securities laws. As a long time CCIM and CCIM Senior Instructor, Gene has won numerous awards for his teaching ability. His book “It’s a Whole New Business!” is really a “how-to” manual on real estate syndication.
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