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The private placement memorandum
that's kind of like the big

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document the syndication
attorneys work with, that we

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give our clients it's aside from
the operating agreement, which

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really makes the investment
entity work itself. The private

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placement memorandum is a
absolutely critical document.

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What does it do? Well, in
summary, what it does is it

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allows the syndicator, the fund
manager, the business raising

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capital, it allows them to give
to potential investors, an

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identification of all the terms
of the investment, identify

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risks, identify conflicts of
interest, all for the purpose of

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allowing that prospective
investor to make a good decision

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for themselves about whether or
not to exist, it is a benchmark

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at Keystone in private
offerings, it is an absolutely

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critical document, it is
absolutely required for non

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accredited investors. And even
though it is not required for

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accredited investors itself,
there is hardly a private

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offering under 506 C, or even
506 B to only accredited

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investors, that doesn't use
them. Why? Because it's such an

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important document. It's the
document when the bottom falls

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out, and you needed the most you
can say hold it up and say this

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is what I told you about the
investment. It is your Get Out

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of Jail Free card because you
don't belong in jail, when

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you've got this document, you've
shown the investors all the

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things that really can go wrong,
you've identified all those

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terms. So in this video, here's
what we're going to do, we're

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going to go through in detail,
the 10 major sections that go

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into a private placement
offering, I know you're gonna

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find it helpful. And it's really
just like a list of all those

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things that are there and the
things that I think about as a

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syndication attorney when I
draft him. I hope you enjoy this

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video. As a note for my podcast.
As a note, from my podcast

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listeners, I want to say thank
you. This is our 100th episode.

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That's why I did such a long
talk for you. I wanted to make

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sure that you have that. And I
wanted to say thank you, you

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listening to my podcast means a
lot to me, I enjoy speaking to

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you. And we've helped a hundreds
and hundreds of people along the

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way, do their own deals. And
generally, I believe putting

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this kind of good information
out into the world is the right

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thing to do. So thank you. Thank
you very much for enjoying my

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podcast, I hope you keep
subscribing tell your friends,

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get them to subscribe. Again,
thank you for being here. 100

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episodes, wow, that is a big.

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So the private placement
memorandum has a lot of parts.

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Now we're going to talk about
the 10 biggest parts, and how

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they function and what their
role is. Now this doesn't

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necessarily mean that they have
to be in this section. And it

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certainly doesn't mean it needs
to be in this order. Because

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when I draft them, they're
definitely not in this order.

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But I thought it was the
clearest organization to talk

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with you about how to organize
what a private placement

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memorandum is, what that thought
process is because it really

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goes to the, again, the heart of
what the investment is, and the

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purpose of that of that PPM to
describe those conflicts that

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risk those terms in a clear and
concise manner. So without

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further ado, the first big kind
of topic area of a private

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placement memorandum is the
summary of terms. So this is the

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terms of the investment. Now, it
does a lot of things underneath

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the summary of terms, if you've
seen them most often it's

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structured as a table. That's
how I write them as well. And in

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that table, we're doing things
like we're identifying the

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investment entity itself, we're
identifying who the manager is.

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But we're also involved
identifying that investment

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objective. So we're putting it
in the summary of terms to make

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it clear and called out right
here, that the objective of this

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investment is to make returns
for its investors. So it's a

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security right, that's the whole
purpose to make, make funds make

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money for our investors is to do
that and in some manner. So we

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describe in some detail about
what that objective is and how

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it's going to be achieved. So
maybe if I identified specific

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terms, sometimes we put that in
here as well, I mean, specific

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goals, some targets that you
want to hit in terms of IRR or,

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or multiples or things like
that, that oftentimes goes here

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as well. Another Creek, Cara
absolutely critical part of the

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summary of offering terms is Who
exactly is able to invest? Who

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are those eligible investors?
Now, this is either one of two

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answers, or both. So yeah, well,
it's so it's either accredited

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investors. So accredited
investors are those people who

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meet the requirements of
Regulation D, rule 501, they're

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identified there and 501 A, who
those accredited investors are.

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So briefly, that's the, they
make 200 or $300,000 of income

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for the past two years with the
expectation of the third year,

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or the current year to make that
same amount, it's $300,000, that

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for counting the spouse, or they
have the net wealth of over a

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million dollars, not including
the value or any equity in the

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private or primary residence,
because negative equity Does,

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does have an effect. But any
positive equity does not. So

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that's the accredited investors
eligible investor time, now,

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almost always, you're going to
be taking them because why

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wouldn't do the other group that
is that can be available for a

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four a five is for a 506 b
offering. And those are your non

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accredited investors. Those are
simply those people who have not

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reached the level of the
accredited investor. Now, they

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must be known to you and they
must have some level of

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sophistication about business
and about investing. So they

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must meet a minimum threshold in
order to invest, you wouldn't

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want to take somebody who's
never balanced a checkbook in

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their life and put them in as a
non accredited investor, they're

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probably not sophisticated
enough. Not that they're bad

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people, they just don't fit into
the criteria, and probably

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shouldn't be investing. But
those, those people should be

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there. The non accredited
investors, if you're doing a 506

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b offering, may very well be an
eligible investor in. And then

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like I said, third category is
both. Most of the time if you're

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doing a 506 b offering is going
to be both you'll both have non

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accredited investors, which is
limited in their 506 beat to 35

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of them in any 90 day period,
and an unlimited number of

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accredited investors. If you're
doing a rule 506 C offering,

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you're just taking an unlimited
amount of accredited investors,

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but they must be verified to be
accredited investor. And so

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that's just a quick summary of
what those of what that eligible

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criteria is. Another important
term is what's the offering

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sighs Are you raising 5 million
10 million 100 million a

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billion, it's important for
investors to know because they

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need to know what they're
getting into. Right, it's a very

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different thing to invest in
something that's going to be

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raising a million dollars, if
I'm going to give you $200,000

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And your raise is a million,
wow, I suddenly own 20% of this

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thing, if you're going to be
raising $1 billion. Now I own

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very, very small amount, right?
I own point 2% of this thing. So

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much, much smaller. So it's that
what is that offering sighs

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number three is really are for
is really the use of proceeds.

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Now. Here we expand the use of
Jenner of proceeds greatly. But

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here I'm going to speak just
kind of generally about it. I

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normally put a section in my
terms that says we're going to

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be using these funds for paying
for expenses as well as

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investing in the primary assets,
whatever those are, because

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remember, this isn't just real
estate that uses these real

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estate is a lot of my clients,
but it's not all. So I have an I

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have clients that invest
directly capital into their

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business. I have ones that build
funds, or hedge funds or things

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like that. They're all buying
different asset types, and

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they're using the funds in order
to buy those kinds of things.

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Another main term is the
estimated hold period. So I give

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you $200,000 How long are you
going to be using those funds in

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this investment before I get
back? Is this a three year deal?

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A five year deal a seven year
deal? A one month deal? It's

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kind of important for me to know
so I have an expectation of of

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how long it's gonna be tied up.
If you leave left this out.

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You're gonna have a hard time
finding investors because they

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have no idea what they're
getting into. Right if I give

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you $200,000 I kind of want to
know Another Creek key term, and

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probably the term of the
offering that investors flip to

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first is what the distributions
look like. I mean, we're giving

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you this money in order to get
those distributions. So what do

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they look like? Am I getting a
preferred return with some sort

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of water? Am I getting straight
equity that's getting split out

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some way? Am I getting basically
a preferred security? So it's

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paying out at a fixed rate? I
want to know, I want to see the

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language so I can understand
what exactly it is. So that's a

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very key piece of information
for me. What do the expenses

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look like? Am I getting if I
invest in your business? Is my

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money going to be used for what
kind of expenses? Is it going to

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be used for your as the
syndicator at for your office

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space in your personal
assistant, kind of important for

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me to know that is, is are one
of the regular expenses going to

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be paying for, you know,
preparation of tax returns, most

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of the time it is, but it's not
always that kind of like to

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know, well, what is all this
money that I'm providing you

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going forward. And along the
same lines of expenses, this is

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also where we talk about
management fees. Now we have

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lots of different kinds of fees
that oftentimes get baked in,

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not always so I still some, I
prepare some private placement

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memorandums with no fees, no
management fees whatsoever,

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which is certainly an option,
certainly a good marketing

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advantage. But it's not, it's
actually more common to have

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some sort of feeds. So asset
management fees, property

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management fees, if it's a real
estate deal, acquisition fees to

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buy the the asset, disposition
fee to sell the assets, finance

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fees, if there's outside
financing being provided. These

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are all kinds of fees that are
that exist, that are common. And

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they need to be put here, they
have to go into a private

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placement memorandum, obviously.
But this is normally where we

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identify where those what those
fees, what that fee structure

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looks like.

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Another key term are is
transferability of membership

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interest. Now remember, under
Regulation D, these things

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these, the security is not
freely transferable. So that's

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why cryptocurrencies oftentimes
don't work. Because you have if

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you have a cryptocurrency by its
very nature, it's had its

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tokenized to make it freely
tradable. Regulation D

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offerings, regulation, D
securities are not supposed to

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be freely tradable, is right
there in the rules. So this is

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normally where we talk about
those things, there are major

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restrictions on the
transferability. Now the purpose

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of those restrictions is really
just to reduce the the

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possibility of a secondary
market being created. That's

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really the goal of the SEC here
is to restrict it. So there's

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not like these mini stock
markets all popping up all over

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the place, where people are
trading on their private

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placement offerings, just on the
value of the stock, or the of

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the units that there are, they
should only be an investment

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should be geared towards driving
the business and towards the

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business goals of what ever it
is. And I don't mean

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specifically a business because
it can be. But it doesn't always

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mean it can also mean a real
estate thing or a private equity

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fund or something like that. But
the goal is the money should be

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driving that not not speculation
on the value of the security

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itself. That's why it's
restricted, it is not allowed.

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Another key item here is income
tax considerations. Most of the

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time, for a for a non business,
we're talking about these file

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partnership level tax returns.
So if they're new, most of the

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time, the entity choice will be
an LLC, and they'll file a k one

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and you'll get K ones for each
investment that you make. And

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then lastly, for the major terms
that I put in and this is just

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high level, there's actually
quite a few more, but I want to

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give you a brace like broad
overview is governing law. So

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I've got a problem. I invested
in your in your entity, and I've

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got a big problem and I'm going
to file a lawsuit. Well what law

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governs here? Is it the state
where I am is it the state where

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you are is a Delaware is it
Wyoming? Is it Texas? Is it New

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York? Is it California? Where is
that? It's a very important

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point because if things go very
bad I need to know it's a major

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term choice of law is always a
major turn. Lawyers love it

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because it's a major topic for
us. we study it in law school

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for a whole year. And so that's
why it ends up in your

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agreements. But it also is very,
very important. And so that's

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why it's included under the
summary of terms. The next major

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topic, other after summary of
terms, is the disclosures of

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00:15:19,860 --> 00:15:24,840
risks and conflicts of interest.
This is a major part of a

220
00:15:24,840 --> 00:15:29,760
private placement memorandum.
Its job is to make sure that

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00:15:29,760 --> 00:15:32,910
investors know what they're
going into. Now, I oftentimes

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00:15:32,910 --> 00:15:36,060
tell clients this, and I'm not
really joking when I say it,

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00:15:36,270 --> 00:15:43,830
although it's true, is if I were
to draft the perfect risk

224
00:15:43,830 --> 00:15:48,150
statement, it would look like
this. Dear investor, you are

225
00:15:48,150 --> 00:15:51,600
going to lose every single
penny, I guarantee it, we're

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00:15:51,600 --> 00:15:54,900
going to keep it all no matter
what if we make any and you will

227
00:15:54,900 --> 00:15:59,190
lose every penny. Now, if I
could draft it that way, it

228
00:15:59,190 --> 00:16:02,160
would be great because Boy,
wouldn't it protect your wealth,

229
00:16:02,250 --> 00:16:05,820
no matter what happens, you're
right, the investor doesn't get

230
00:16:05,820 --> 00:16:10,830
their money back. Of course, no
investor is ever, ever going to

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00:16:10,830 --> 00:16:14,070
invest in that. Why? Because
they're investing in it to get

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00:16:14,070 --> 00:16:21,480
money. So we need to give a
proper picture of the risks and

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00:16:21,480 --> 00:16:24,180
conflicts of interest that
exist. So let's talk about

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00:16:24,180 --> 00:16:29,160
risks. First, when we're talking
about risks, we're talking about

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00:16:29,160 --> 00:16:33,930
reasonably foreseeable risks
that could happen. Now, I'm not

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00:16:33,930 --> 00:16:38,400
going to put in the in a PPM
that there is a risk that the

237
00:16:38,400 --> 00:16:41,940
moon is going to fall out of the
sky landed in the ocean and

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00:16:41,940 --> 00:16:45,930
closet tsunami, which is putting
the money at risk. I don't think

239
00:16:45,930 --> 00:16:49,800
that's likely to happen, could
it? Probably not. But I guess,

240
00:16:50,220 --> 00:16:54,210
you know, in the in a quantum
mechanics world, maybe there's a

241
00:16:54,420 --> 00:16:59,280
practically a nonzero answer
that it could happen. Or if

242
00:16:59,280 --> 00:17:01,530
you've seen the movie,
Oppenheimer, you know, there was

243
00:17:01,530 --> 00:17:08,520
a nonzero risk that the bomb was
the atomic bomb was going to

244
00:17:08,520 --> 00:17:13,830
blow up the entire world. It's a
nonzero risk, it's there, but

245
00:17:13,830 --> 00:17:16,920
you're not gonna put it into a
private placement memorandum.

246
00:17:17,580 --> 00:17:20,700
We're putting in reasonably
foreseeable risks. Now here

247
00:17:20,700 --> 00:17:24,210
we're talking about like
business risks. So the big kind

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00:17:24,210 --> 00:17:28,770
of overarching risk, that's
there for sure is, hey,

249
00:17:29,310 --> 00:17:34,830
investor, this is an investment
investments, by their very

250
00:17:34,830 --> 00:17:38,550
nature are inherently risky,
otherwise, there would be no

251
00:17:38,550 --> 00:17:44,130
return. You don't get no risk,
no reward, right? So this is an

252
00:17:44,130 --> 00:17:49,230
investment and your money is at
risk, you may lose money, it's

253
00:17:49,230 --> 00:17:53,640
possible. So that's sort of like
the broad overall business rate

254
00:17:53,640 --> 00:17:58,170
US business risk that exists.
But there's also other risks,

255
00:17:58,410 --> 00:18:03,570
things like, when we talk to
investors, we're oftentimes

256
00:18:03,570 --> 00:18:08,220
leaning on our past experience,
right? So my experience, I

257
00:18:08,220 --> 00:18:11,940
personally have done quite a
number of deals, I have a very

258
00:18:11,940 --> 00:18:16,530
good track record of generating
returns for my investors. But

259
00:18:17,220 --> 00:18:22,290
that past history, the results
that I got in the past, for my

260
00:18:22,290 --> 00:18:26,250
investors are the past, it
doesn't mean that my next

261
00:18:26,250 --> 00:18:30,360
venture is going to be
successful. I'm gonna try my

262
00:18:30,360 --> 00:18:33,630
darndest to make sure it is
successful and wildly

263
00:18:33,630 --> 00:18:37,710
successful. But just because I
had success in the past doesn't

264
00:18:37,740 --> 00:18:41,670
guarantee that in the future,
I'm going to have the same it's

265
00:18:41,670 --> 00:18:45,750
it's, that's, that's one of the
risks that you also need to make

266
00:18:45,750 --> 00:18:53,370
sure investors know. Another key
risk is you as a syndicator, are

267
00:18:53,370 --> 00:18:56,940
bringing to this deal, you're
putting this thing together, and

268
00:18:56,940 --> 00:19:00,630
you're using all your talent,
your skills, all all those

269
00:19:00,630 --> 00:19:05,400
things that make you special,
into this investment. Right. And

270
00:19:05,400 --> 00:19:09,270
that's why investors are making
this decision because of you.

271
00:19:09,690 --> 00:19:12,660
Ultimately, the end of the day,
that's the decision that they're

272
00:19:12,660 --> 00:19:18,450
making. They're trusting you to
do this. So you are a key person

273
00:19:18,450 --> 00:19:23,550
to this investment. And there's
no guarantee that you're gonna

274
00:19:23,550 --> 00:19:28,500
be here next week, in order to
keep it running. Right? Meaning

275
00:19:28,500 --> 00:19:31,590
you're gonna you want to be,
you're gonna try to be, but you

276
00:19:31,590 --> 00:19:34,650
never know when that bus is
going to be barreling down Main

277
00:19:34,650 --> 00:19:39,660
Street. So it's a risk that
exists. It's a risk that needs

278
00:19:39,660 --> 00:19:43,560
to be disclosed that hey, we've
got these key people, like

279
00:19:43,560 --> 00:19:47,430
including you that exist, and
they're very important to the

280
00:19:47,430 --> 00:19:51,780
operations. We can't make a
certain guarantee that they're

281
00:19:51,780 --> 00:19:57,240
going to be with us always.
Another key risk and we actually

282
00:19:57,240 --> 00:20:00,450
talked about under summary of
terms and that's the lack of

283
00:20:00,450 --> 00:20:04,830
liquidity. So basically, because
we can't freely trade this,

284
00:20:04,830 --> 00:20:08,490
because there's no public market
for these securities, I can't

285
00:20:08,490 --> 00:20:12,690
just go and sell them on Wall
Street. Right? It doesn't exist

286
00:20:12,690 --> 00:20:16,860
to do that. So the investors
need to know, there may be a

287
00:20:16,860 --> 00:20:21,090
situation where you really wants
your money back. But you just

288
00:20:21,090 --> 00:20:24,600
can't get it, you just can't
find a person who's going to buy

289
00:20:24,600 --> 00:20:28,860
it. Maybe the managers got their
money all tied up, maybe all the

290
00:20:28,860 --> 00:20:31,860
other investors or have their
money all tied up, and you just

291
00:20:31,860 --> 00:20:36,450
can't sell it. It's not a liquid
asset. And the investors just

292
00:20:36,450 --> 00:20:38,610
need to know that that's just
the reality of it.

293
00:20:40,020 --> 00:20:43,590
Of course, there's always income
tax risks. We don't know what

294
00:20:43,590 --> 00:20:47,310
taxes are going to be in the
next few years. Maybe they'll

295
00:20:47,340 --> 00:20:51,150
they'll be more favorable, maybe
there'll be less, it doesn't

296
00:20:51,150 --> 00:20:55,020
really matter for the purposes
of rafting and ppm, other than

297
00:20:55,020 --> 00:20:58,440
this let investors know, hey,
we're drafting this based on the

298
00:20:58,440 --> 00:21:02,730
tax situation that we know
today. Today, if it's real

299
00:21:02,730 --> 00:21:06,090
estate, we know we can
depreciate the property, we know

300
00:21:06,090 --> 00:21:10,020
that exist, it's a reality
thing. Maybe that will go away.

301
00:21:10,080 --> 00:21:14,970
I don't know. Maybe they will do
away with 1031 exchanges? Don't

302
00:21:14,970 --> 00:21:20,850
know, it's just a reality that
it may happen. And investors

303
00:21:20,850 --> 00:21:24,900
need to know it. Now, why do
they need to know these risks?

304
00:21:25,050 --> 00:21:28,890
Because what if some one of them
happened? Right, and they're

305
00:21:28,890 --> 00:21:33,660
very mad. So let's say that they
didn't really understand about

306
00:21:33,660 --> 00:21:36,960
the liquidity thing. Right? They
didn't understand that these are

307
00:21:36,960 --> 00:21:40,980
illiquid, they didn't see that
section on your summary of terms

308
00:21:41,010 --> 00:21:44,190
that, that there's these
restrictions on or they didn't

309
00:21:44,190 --> 00:21:48,720
draw the conclusion of what that
meant for them. Well, something

310
00:21:48,720 --> 00:21:52,200
happens in their life, and they
need to get that cash out. This

311
00:21:52,200 --> 00:21:55,110
is their only pool of cash, and
they need to get it. So they

312
00:21:55,110 --> 00:21:59,220
come to you and they say I gotta
get this cash out right now. Oh,

313
00:21:59,220 --> 00:22:03,720
I had a life event that requires
it. And they are earnest and

314
00:22:03,720 --> 00:22:07,920
really, really need it. But
you're in a situation at that

315
00:22:07,920 --> 00:22:10,530
point, time point where you
can't help them out and no other

316
00:22:10,530 --> 00:22:13,740
investor can help them out.
Well, what do you think their

317
00:22:13,740 --> 00:22:18,420
complaint is gonna be? Why
didn't you tell me that these

318
00:22:18,420 --> 00:22:22,530
are illiquid? Why didn't should
go through and tell me that I

319
00:22:22,530 --> 00:22:26,730
had no idea I would have never
invested if I had known that it

320
00:22:26,730 --> 00:22:31,860
was illiquid. That is why it's
in the private placement

321
00:22:31,860 --> 00:22:34,950
memorandum. So you can hold up
your private placement

322
00:22:34,950 --> 00:22:39,810
memorandum point to the section
and say, I did. See it's right

323
00:22:39,810 --> 00:22:45,270
here. I told you that it's not
it's just not a liquid thing. If

324
00:22:45,270 --> 00:22:49,350
they make a complaint to the
SEC, or a state regulator, and

325
00:22:49,350 --> 00:22:53,790
they get a copy of the PPM, you
can show them and say, I told

326
00:22:53,790 --> 00:22:58,020
them that this was a risk. It's
just the reality that it's that

327
00:22:58,020 --> 00:23:02,880
these things are not freely
tradable. And they'll understand

328
00:23:04,020 --> 00:23:07,200
if they try and take it to a
lawyer and try and sue you,

329
00:23:07,200 --> 00:23:10,620
because Darn it, that's
indicator didn't tell me about

330
00:23:10,620 --> 00:23:14,280
it. The attorney, the
plaintiff's attorney is going to

331
00:23:14,280 --> 00:23:17,670
look at that and be like, it's
right here, you can't, you're

332
00:23:17,670 --> 00:23:21,030
not going to be able to sue,
because of it. It's all over

333
00:23:21,030 --> 00:23:25,380
this document, that it's
illiquid. I'm not gonna take

334
00:23:25,380 --> 00:23:28,710
your case, or I'll take it but
you're gonna have to pay me our

335
00:23:28,740 --> 00:23:31,590
you know, no, one attorney would
take it on contingency because

336
00:23:31,590 --> 00:23:37,260
it's a loser. So that's why
we're so careful about making

337
00:23:37,260 --> 00:23:42,900
sure our risks are well crafted.
Now, why don't we put in every

338
00:23:42,900 --> 00:23:47,160
risk in the known universe? Why
don't we make this like a 10,000

339
00:23:47,160 --> 00:23:51,090
page document that's got risks
that are just crazy and

340
00:23:51,090 --> 00:23:55,830
ludicrous in there? Well, courts
have actually said, You've got

341
00:23:55,830 --> 00:24:00,120
to tell your investors risks,
but you can't bury risks in

342
00:24:00,120 --> 00:24:04,950
other risks. So that's why we
carefully tailor the risks of

343
00:24:04,950 --> 00:24:10,020
those risks, which are
reasonably possible for a that

344
00:24:10,050 --> 00:24:13,890
reasonably foreseeable that
could happen so that investors

345
00:24:13,890 --> 00:24:17,640
can make a decision about those
things that are reasonable. It's

346
00:24:17,640 --> 00:24:21,210
not reasonable that that tsunami
from the moon falling in the

347
00:24:21,210 --> 00:24:25,170
ocean is going to be a big
problem. It's just not. So we

348
00:24:25,170 --> 00:24:29,760
don't put it there. That's why
so I don't list out everything.

349
00:24:29,880 --> 00:24:33,090
Normally, there's quite a few
pages of risks, but it's only

350
00:24:33,090 --> 00:24:37,890
what I think is reasonably
necessary. Is there one or two

351
00:24:37,920 --> 00:24:42,630
or three or five risks? It
depends. But there's more than

352
00:24:42,630 --> 00:24:46,230
five and there's more than 10.
It's probably and I've never

353
00:24:46,230 --> 00:24:49,680
really counted but my guess when
you add up all the different

354
00:24:49,680 --> 00:24:54,480
categories of risks, there's
probably about 30 or 40. That's

355
00:24:54,480 --> 00:24:59,220
my rough guess. So the other
piece of this puzzle is

356
00:24:59,220 --> 00:25:04,080
conflicts of interest. Now, when
you as a sponsor are putting

357
00:25:04,080 --> 00:25:07,380
this deal together, you're
getting paid most of the time

358
00:25:07,410 --> 00:25:11,400
99.9% of the time, you're
getting paid. And when you're

359
00:25:11,400 --> 00:25:15,060
getting paid, there is an
inherent conflict of interest.

360
00:25:15,360 --> 00:25:19,290
So a conflict of interest is
when your needs don't

361
00:25:19,290 --> 00:25:26,490
necessarily match up 100% to the
needs of a, of an investor, I

362
00:25:26,490 --> 00:25:29,370
think the best example of a
conflict of interest that

363
00:25:29,370 --> 00:25:36,090
happens all the time, is the
sponsor, is a property manager.

364
00:25:36,660 --> 00:25:40,470
So that property manager is
making fees, property management

365
00:25:40,470 --> 00:25:43,200
fees on taking care of the
property. In fact, that's the

366
00:25:43,200 --> 00:25:46,770
bulk of what they're making
profit making they're making

367
00:25:46,770 --> 00:25:51,990
their fees on is that management
of the property. And the

368
00:25:51,990 --> 00:25:55,830
investors have identified, hey,
this really actually is a good

369
00:25:55,830 --> 00:26:01,650
time to sell this, this asset.
While the in the sponsor has a

370
00:26:01,650 --> 00:26:04,620
conflict of interest, because
they want to keep this thing

371
00:26:04,620 --> 00:26:08,730
going. They want to keep their
property management job, you

372
00:26:08,730 --> 00:26:12,480
know, servicing the property,
that's an inherent conflict, it

373
00:26:12,480 --> 00:26:16,860
exists, it must be disclosed.
Now conflicts of interest can

374
00:26:16,860 --> 00:26:21,720
exist, not saying that they can,
they always are going to exist.

375
00:26:22,080 --> 00:26:26,670
And it's okay, they just need to
be disclosed, investors have to

376
00:26:26,670 --> 00:26:29,970
know, hey, these are the main
conflicts of interest, I'm

377
00:26:29,970 --> 00:26:33,510
getting paid fees, I'm getting
these things, our interests are

378
00:26:33,510 --> 00:26:37,410
never going to be completely
aligned, I'm going to do my best

379
00:26:37,410 --> 00:26:41,940
to act in your best interest.
But just know, there are

380
00:26:41,940 --> 00:26:45,780
conflicts, that way the investor
can read those conflicts and

381
00:26:45,780 --> 00:26:49,050
decide for themselves, whether
you are going to act in their

382
00:26:49,050 --> 00:26:52,170
best interest or not. If they
don't, they don't have to

383
00:26:52,170 --> 00:26:55,320
invest. If they do think that
you're going to act in their

384
00:26:55,320 --> 00:26:58,860
best interest, then they
probably are going to invest. So

385
00:26:58,890 --> 00:27:02,100
that's why we disclose them,
because they got to be there.

386
00:27:03,000 --> 00:27:07,500
The third big section is capital
uses and expenses. So we touched

387
00:27:07,500 --> 00:27:10,920
on this a little bit above under
summary of terms. But that

388
00:27:10,920 --> 00:27:15,810
breakdown of how the money's
being used is critical for

389
00:27:15,810 --> 00:27:21,630
investors to know, under
Regulation D rule 506. B, when

390
00:27:21,630 --> 00:27:26,220
you have non accredited
investors, it's not only a darn

391
00:27:26,220 --> 00:27:30,690
good idea, it's required that
you make a very detailed

392
00:27:30,690 --> 00:27:35,100
explanation about what those
uses of the funds are going to

393
00:27:35,100 --> 00:27:39,750
be. Now how detailed does it
need to be? Does it need to be

394
00:27:39,750 --> 00:27:43,560
30 pages of forecasts and
analysis and things like that?

395
00:27:43,560 --> 00:27:49,440
No, it needs to be reasonable
enough that the investor can see

396
00:27:49,440 --> 00:27:53,310
for themselves, okay, I'm going
to give them this kind of money,

397
00:27:53,340 --> 00:27:57,030
this money is going to be used
here to buy this asset, some of

398
00:27:57,030 --> 00:28:00,690
this money is going to be paid
for these fees. Some of these

399
00:28:00,690 --> 00:28:04,200
are going for legal expenses
hid, some of this is going for

400
00:28:04,200 --> 00:28:08,730
this, so that the investor knows
what they're buying, right,

401
00:28:08,730 --> 00:28:12,420
they're buying a piece of a
company most of the time. And so

402
00:28:12,420 --> 00:28:15,630
they need to know have a good
feeling about well, this is the

403
00:28:15,630 --> 00:28:19,440
entity that I'm buying, even if
they're taking just a preferred

404
00:28:19,440 --> 00:28:21,810
equity position, like a
preferred stock,

405
00:28:23,160 --> 00:28:26,970
they still need to know, because
it's a very different situation

406
00:28:26,970 --> 00:28:30,150
for me putting money into
something that's going to be

407
00:28:30,150 --> 00:28:36,510
used to buy to basically pay for
you. Versus it's going to be

408
00:28:36,510 --> 00:28:40,170
paid for this Ferrari that's
going to generate all this cash.

409
00:28:40,560 --> 00:28:43,140
Right, there are two different
things. So I need to know that

410
00:28:43,140 --> 00:28:46,080
as an investor. And that's why
the use of funds is very

411
00:28:46,080 --> 00:28:49,320
important. At the same time,
this is also where we talk about

412
00:28:49,320 --> 00:28:53,970
expenses, the kinds of expenses
that are allowed to be spent,

413
00:28:54,030 --> 00:28:59,790
right. So is if we're paying for
the for paying for overhead

414
00:28:59,790 --> 00:29:03,480
management, well, that's a very
important thing. I need to know

415
00:29:03,480 --> 00:29:07,290
that some my money is being used
to pay for that manager. If I'm

416
00:29:07,290 --> 00:29:10,440
getting distributions on money
that's coming from investor

417
00:29:10,440 --> 00:29:14,850
money starting to sound like a
pyramid scheme. I want to know

418
00:29:14,850 --> 00:29:18,630
that I want to see that in
paper. Okay, well, if that money

419
00:29:18,630 --> 00:29:21,930
is getting is getting paid to
me, Well, how is the money

420
00:29:21,930 --> 00:29:26,160
getting replaced on that?
Because I need to know so that I

421
00:29:26,160 --> 00:29:30,330
can make a decision for myself
on whether or not to invest. The

422
00:29:30,360 --> 00:29:34,740
fourth big topic is the details
about the security offering

423
00:29:34,740 --> 00:29:39,210
itself. So this is how many
units are being offered. In

424
00:29:39,210 --> 00:29:43,320
reality units are just sort of a
construct that we use. It's not

425
00:29:43,320 --> 00:29:48,090
actually in any of the LLCs laws
that they are actually units. It

426
00:29:48,090 --> 00:29:51,960
always is a percentage because
really, most of the time these

427
00:29:51,960 --> 00:29:57,060
are operating behind the scenes
as partnerships. So it's really

428
00:29:57,060 --> 00:30:01,710
driven by percentages, but units
is about Very convenient way to

429
00:30:01,710 --> 00:30:05,400
refer to it. So I almost always
refer to everything in units.

430
00:30:05,730 --> 00:30:08,820
Because at the end of the day,
it's easier to calculate. Well,

431
00:30:08,820 --> 00:30:13,020
where exactly is what exactly is
that percentage rather than

432
00:30:13,020 --> 00:30:17,490
having to deal with the math of
calculating varying percentages,

433
00:30:17,520 --> 00:30:23,760
if there is, if you own point
37215 of an investment, but that

434
00:30:23,760 --> 00:30:29,310
investment was going to raise
$20 million. And now it's, and

435
00:30:29,310 --> 00:30:33,330
now through optimization, you
were able to raise 19 million,

436
00:30:33,540 --> 00:30:38,820
and you bought back $500,000
worth of units? Oh, my God, how

437
00:30:38,820 --> 00:30:41,610
do you figure it out? It's much
easier to just say, Okay, well,

438
00:30:41,610 --> 00:30:45,900
those units got decreased here.
So then my denominator changes,

439
00:30:45,900 --> 00:30:51,120
and I can still figure out very
quickly, what my, what my actual

440
00:30:51,120 --> 00:30:56,250
percentage of ownership is. So
that's, that's one of the very

441
00:30:56,250 --> 00:31:00,840
key things, how much are those
units selling for? How much?

442
00:31:00,990 --> 00:31:04,650
What's the minimum investment?
What What kind of

443
00:31:04,650 --> 00:31:08,100
considerations? Are there for
minimum investment? Does it have

444
00:31:08,100 --> 00:31:13,680
to be that? If I make an
investment? Are you able to use

445
00:31:13,680 --> 00:31:17,160
the funds immediately? Or do you
need to wait a period of time?

446
00:31:17,610 --> 00:31:20,910
Is that money getting set put
into an escrow account? Or is it

447
00:31:20,970 --> 00:31:24,810
is it going into the LLC bank
account, those are the kinds of

448
00:31:24,810 --> 00:31:27,960
things that I want to know as an
investor, and they should need

449
00:31:27,960 --> 00:31:31,080
to be in your PPM number five,
and six, I'm going to do

450
00:31:31,080 --> 00:31:35,730
together. And that is your
company background and the

451
00:31:35,730 --> 00:31:39,720
management profiles background.
Remember what I said earlier,

452
00:31:39,840 --> 00:31:43,350
that people are investors are
ultimately making an investment

453
00:31:43,350 --> 00:31:46,890
in you, they're making a
decision based on whether or not

454
00:31:46,890 --> 00:31:50,130
to trust you, and at the end of
the day, give you money in

455
00:31:50,130 --> 00:31:54,780
exchange for this hope of making
more money. So the background of

456
00:31:54,780 --> 00:31:58,950
the company, and the background
of you, as a manager are

457
00:31:58,950 --> 00:32:02,790
critically important. Everybody
needs to know who they're

458
00:32:02,790 --> 00:32:08,370
investing into. If it was blank,
nobody would invest. If they had

459
00:32:08,370 --> 00:32:12,120
no idea that was going to
happen, it's just not going to

460
00:32:12,120 --> 00:32:15,570
happen. It's one of the major
hurdles that exists when you're

461
00:32:15,570 --> 00:32:19,950
marketing a security under 506.
C, and you put it on the

462
00:32:19,950 --> 00:32:23,310
internet and are trying to get
investors because investors

463
00:32:23,310 --> 00:32:28,020
still need to know they need to
feel who that invest, oh, that

464
00:32:28,020 --> 00:32:31,380
sponsor it, they need to know
who's behind the curtain because

465
00:32:31,380 --> 00:32:34,830
nobody just throws money at a
blank wall, hoping that it's

466
00:32:34,830 --> 00:32:38,190
going to be happen. It's you're
just not going to collect

467
00:32:38,190 --> 00:32:42,060
anything. So that somehow you
need to overcome that hurdle.

468
00:32:42,480 --> 00:32:48,000
This is part of that. It also
sets up as part of a private

469
00:32:48,000 --> 00:32:52,350
placement memorandum separate
from a brochure it's separated

470
00:32:52,350 --> 00:32:56,520
puts you forward to give a
reasonable basis for why

471
00:32:56,520 --> 00:32:59,370
somebody would make that
investment in the first place.

472
00:32:59,820 --> 00:33:03,120
If you're a super experienced
real estate professional, for

473
00:33:03,120 --> 00:33:08,520
example, then by putting that
sort of detail into your private

474
00:33:08,520 --> 00:33:11,850
placement memorandum, if
somebody is reading the private

475
00:33:11,850 --> 00:33:15,360
placement memorandum, it's like,
okay, I can see why somebody

476
00:33:15,360 --> 00:33:19,950
who's reasonable would invest in
this. If you've if your private

477
00:33:19,950 --> 00:33:24,000
placement memorandum for
building a 20 foot story, high

478
00:33:24,000 --> 00:33:28,260
rise, what says, Well, you went
to clown school and dropped got

479
00:33:28,260 --> 00:33:33,030
kicked out. And that's it,
there's probably not a

480
00:33:33,030 --> 00:33:37,020
reasonable basis in order to
invest. So that automatically

481
00:33:37,020 --> 00:33:42,300
weakens the entire structure. So
setting up a good foundation of

482
00:33:42,300 --> 00:33:47,010
that background is necessary as
part of the PPM. Now what about

483
00:33:47,010 --> 00:33:50,490
the situation where you just
don't have it? That's okay, too.

484
00:33:50,880 --> 00:33:54,210
But we need to kind of make it
kind of clear, right, we need to

485
00:33:54,210 --> 00:33:57,150
make it so that there's nothing
will being lied to. There's

486
00:33:57,150 --> 00:34:02,340
nothing hidden about that. So
maybe you went to college and

487
00:34:02,340 --> 00:34:06,000
you graduated top of your class.
Great, that's perfect for there.

488
00:34:06,390 --> 00:34:10,080
Maybe it's you know, you've led
a team in a similar type of

489
00:34:10,290 --> 00:34:13,260
setup, but it wasn't
specifically about whatever this

490
00:34:13,260 --> 00:34:18,060
is, okay, well, that still needs
to be there so that we can come

491
00:34:18,060 --> 00:34:21,510
up with a rational reason, in
order for this to happen.

492
00:34:22,200 --> 00:34:26,190
Remember, investors invest in
you, but they do it on an

493
00:34:26,190 --> 00:34:30,030
emotional level. But at the end
of the day, they need a rational

494
00:34:30,030 --> 00:34:34,470
reason to prop it up. They need
to justify it rationally. And

495
00:34:34,470 --> 00:34:37,440
this is part of that
justification. It's a part of

496
00:34:37,440 --> 00:34:41,100
the justification to if
something goes wrong, and

497
00:34:41,100 --> 00:34:44,250
somebody is looking at the
details of the investment. If

498
00:34:44,250 --> 00:34:47,160
that kind of rational
explanation isn't there, there's

499
00:34:47,160 --> 00:34:53,100
a big problem. Also very
important is our seventh topic.

500
00:34:53,250 --> 00:34:57,210
And that is financial
statements. Financial Statements

501
00:34:57,210 --> 00:35:01,470
basically give the money
situation that It exists. Now,

502
00:35:01,500 --> 00:35:05,130
most of the time, my clients
don't actually there is no

503
00:35:05,130 --> 00:35:09,060
financial statements. This is a
brand new entity. Oh, that's a

504
00:35:09,060 --> 00:35:12,720
risk, we need to put that there.
There's no financial statements.

505
00:35:12,720 --> 00:35:15,780
There's no background, there's
no history on this entity to

506
00:35:15,780 --> 00:35:20,430
give financial statements for.
We put that in a risk statement.

507
00:35:20,430 --> 00:35:23,460
But here we're talking about the
financial disposition of our

508
00:35:23,460 --> 00:35:27,900
company. What is the basis for?
What's the source of funds look

509
00:35:27,900 --> 00:35:32,370
like? Is it primarily through
this offering? Is it all through

510
00:35:32,370 --> 00:35:36,480
this offer? Is there a third
party lender, what's the metrics

511
00:35:36,480 --> 00:35:40,710
that are being used in order for
a third party lender to have cuz

512
00:35:40,710 --> 00:35:44,640
that lender, if I go to a bank
and get a bank loan, the bank

513
00:35:44,640 --> 00:35:49,260
has priority over all of my
investors, your bar, your your

514
00:35:49,260 --> 00:35:52,230
investors need to know that what
position that they're in, so

515
00:35:52,230 --> 00:35:55,530
they can kind of make good
estimation of it. It's why your

516
00:35:55,530 --> 00:35:59,010
preferred equity people need to
understand the business as well,

517
00:35:59,250 --> 00:36:02,370
because they actually have
priority over those common

518
00:36:02,370 --> 00:36:06,450
investors, but they need to know
who's over them. They need to

519
00:36:06,450 --> 00:36:10,830
understand that as well. Is
there going to be co investment

520
00:36:10,830 --> 00:36:14,100
from you as the sponsor? Are you
going to be putting money in as

521
00:36:14,100 --> 00:36:18,660
well? If you are fantastic. If
you're not, if your investors

522
00:36:18,660 --> 00:36:22,200
would like to know that? I
wouldn't necessarily say call it

523
00:36:22,200 --> 00:36:25,710
out if you're not putting money.
But if you get the question, you

524
00:36:25,710 --> 00:36:30,930
certainly should tell them. If
you if you are, you definitely

525
00:36:30,930 --> 00:36:33,450
should tell them because
investors are almost always

526
00:36:33,450 --> 00:36:36,840
going to ask how much skin in
the game are you putting in? So

527
00:36:36,840 --> 00:36:41,730
this is another place where you
can put that? What are the costs

528
00:36:41,730 --> 00:36:46,860
of the asset? You know, are you
buying that one acre of land for

529
00:36:46,860 --> 00:36:47,850
$50? billion?

530
00:36:49,140 --> 00:36:53,490
That seems suspicious? Or are
you buying that one acre of land

531
00:36:53,490 --> 00:36:59,490
for $10? Wow, what a great deal.
Right? So what is the what are

532
00:36:59,490 --> 00:37:03,000
those expenses that are being
associated with it? If there's a

533
00:37:03,000 --> 00:37:06,210
development activity? What kind
of development costs? Are there

534
00:37:06,210 --> 00:37:10,980
hard, hard and soft costs? What
does the operating expenses look

535
00:37:10,980 --> 00:37:14,400
like that I as an investor
ultimately paying for by giving

536
00:37:14,400 --> 00:37:18,510
you this money? What are
management fees? You know, it

537
00:37:18,510 --> 00:37:22,590
might, if I make this investment
today, and say we're buying a

538
00:37:22,590 --> 00:37:25,050
piece of real estate? Are you
immediately taking an

539
00:37:25,050 --> 00:37:28,260
acquisition fee? I kinda would
like to know, if you're getting

540
00:37:28,260 --> 00:37:31,620
your pocket, getting money in
your pocket right away. It's

541
00:37:31,620 --> 00:37:34,830
probably not a problem. But I
need to know that that's what's

542
00:37:34,830 --> 00:37:38,820
going on. Lastly, what kind of
reserves are you planning and

543
00:37:38,820 --> 00:37:43,140
now reserves to me, you know, as
an investor that signals you

544
00:37:43,140 --> 00:37:47,220
know what you're doing? Because
if you have $0, in reserves,

545
00:37:47,550 --> 00:37:50,490
something's wrong. You know,
what kind of budget is that?

546
00:37:50,700 --> 00:37:54,900
Where there's no, there's no
safety net whatsoever? It's not

547
00:37:54,900 --> 00:37:57,300
very safe, I would be thinking
you're probably going to be

548
00:37:57,300 --> 00:38:01,650
making a capital call within a
month. So what is the reserves

549
00:38:01,650 --> 00:38:04,320
look like? And what's your plan
on reserves? How's that gonna

550
00:38:04,320 --> 00:38:07,560
work? That's the talk about
financial statements that needs

551
00:38:07,560 --> 00:38:11,490
to be in your private placement
memorandum. The eighth topic,

552
00:38:11,490 --> 00:38:15,690
our legal considerations, now,
probably you're doing this under

553
00:38:15,690 --> 00:38:20,670
Regulation D, it covers 98% of
all of the funds that are got

554
00:38:20,700 --> 00:38:23,400
are gathered in the private
investment world go under

555
00:38:23,400 --> 00:38:28,050
Regulation D. So it's probably a
Regulation D rule. But what kind

556
00:38:28,050 --> 00:38:30,720
of entities are using? It's a
different thing, whether it's an

557
00:38:30,720 --> 00:38:34,440
LLC versus a corporation. Is it
a partnership? That would be

558
00:38:34,440 --> 00:38:37,530
strange? Is it a limited
partnership that's important to

559
00:38:37,530 --> 00:38:41,640
now? Because that certainly
changes the game and how I think

560
00:38:41,640 --> 00:38:47,220
about an investment. What, what
rule under Regulation D, are you

561
00:38:47,220 --> 00:38:51,420
going under? Are you going under
Rule 506? B so that you accept

562
00:38:51,420 --> 00:38:55,020
non accredited investors? Are
you going over under regulation?

563
00:38:55,290 --> 00:39:00,780
Five, rule 506 C, that allows
for only accredited investors, I

564
00:39:00,780 --> 00:39:04,590
have to go through a
verification process. Those are

565
00:39:04,590 --> 00:39:08,070
things that need to be
discussed. What is that criteria

566
00:39:08,070 --> 00:39:12,570
that you're using for accredited
non accredited investors? What

567
00:39:12,570 --> 00:39:17,670
have you decided you need to do
in order to verify accredited

568
00:39:17,670 --> 00:39:22,020
investors? If you're going under
Rule 506? See, if their

569
00:39:22,020 --> 00:39:25,920
confidentiality in this, that's
an important legal consideration

570
00:39:25,920 --> 00:39:29,850
as well. You know, how open is
Am I allowed to be? Can I tell

571
00:39:29,850 --> 00:39:33,180
everybody about this investment?
Or there's certain things you're

572
00:39:33,180 --> 00:39:37,260
disclosing to me that need to be
kept secret? What about

573
00:39:37,260 --> 00:39:40,440
international investors,
international investors can

574
00:39:40,440 --> 00:39:44,340
invest, but are they being
allowed to invest? What are the

575
00:39:44,340 --> 00:39:47,850
rules that you're using in order
to allow those international

576
00:39:47,850 --> 00:39:51,540
investors to invest? And of
course that restriction on

577
00:39:51,540 --> 00:39:57,330
transferability is also a major
legal consideration. The ninth

578
00:39:57,330 --> 00:40:01,830
major topic and this really kind
of is Oh critical because it's

579
00:40:01,890 --> 00:40:06,570
kind of the whole purpose behind
the PBM to begin with, and that

580
00:40:06,600 --> 00:40:10,710
is investor suitability an
investor needs to be able to

581
00:40:10,710 --> 00:40:14,340
make that determine that
determination that your

582
00:40:14,340 --> 00:40:18,810
investment is suitable for their
own needs, they need to be able

583
00:40:18,810 --> 00:40:22,500
to figure out is the amount of
risks that you're that you're

584
00:40:22,530 --> 00:40:26,550
that you have inherent in your
investment, is that suitable to

585
00:40:26,550 --> 00:40:30,750
me is a super high risk, but I
need something very low risk, or

586
00:40:30,750 --> 00:40:33,990
is this something extremely low
risk? And it's just not going to

587
00:40:33,990 --> 00:40:38,160
give me the kind of returns? So
is this suitable? Does it serve

588
00:40:38,160 --> 00:40:41,610
my needs? Are you a cash flow
deal? But all I want as

589
00:40:41,610 --> 00:40:45,600
appreciation? Or are you an
appreciation deal, and I just

590
00:40:45,600 --> 00:40:48,780
got, I'm going to be living off
this money. This is cash flow, I

591
00:40:48,780 --> 00:40:52,620
mean, to make those kinds of
things, what kind of expertise

592
00:40:52,620 --> 00:40:56,160
exists in it? So if you're
buying just real estate, how

593
00:40:56,160 --> 00:41:00,750
much do I know as real estate?
Is it really something I want to

594
00:41:00,750 --> 00:41:03,570
get involved in? Is it something
I want to invest in? So when I'm

595
00:41:03,570 --> 00:41:07,440
looking at your, your strategy
and your tactics, I can

596
00:41:07,440 --> 00:41:11,400
understand them, because if I
don't maybe is isn't the right

597
00:41:11,400 --> 00:41:15,000
kind of investment, right, you
get all sorts of investors who

598
00:41:15,510 --> 00:41:18,690
know that I'm just not going to
go into it, because I just don't

599
00:41:18,720 --> 00:41:21,960
understand it. I mean, Warren
Buffett himself didn't go into

600
00:41:21,960 --> 00:41:25,020
tech stocks for a very, very,
very long time, because they

601
00:41:25,020 --> 00:41:28,440
said he just didn't understand
it. Now, he is invested in a

602
00:41:28,440 --> 00:41:32,550
number of tech stocks, but for a
very long time, he didn't do

603
00:41:32,550 --> 00:41:35,550
any, just because he didn't
understand that market. And

604
00:41:35,550 --> 00:41:40,740
that's a sensible reason. It
just wasn't suitable for him. So

605
00:41:40,770 --> 00:41:46,650
that those kinds of decisions
are necessary for the your

606
00:41:46,650 --> 00:41:50,130
investors to make, and that's
the suitability analysis that

607
00:41:50,130 --> 00:41:56,040
they need to go through. You at
the same time have also somewhat

608
00:41:56,040 --> 00:42:00,300
of a burden in order to
understand their, their own suit

609
00:42:00,330 --> 00:42:04,830
the investor suitability, if you
know that the investor is a cash

610
00:42:04,830 --> 00:42:09,300
flow dependent person, they need
that cash flow, but your deal is

611
00:42:09,300 --> 00:42:13,440
not going to cash flow for 10
years, you need to make sure

612
00:42:13,440 --> 00:42:17,160
that they really understand that
your deal is not cash flowing,

613
00:42:17,160 --> 00:42:21,000
it may not be suitable for them.
It would not be right to put

614
00:42:21,000 --> 00:42:24,810
them in the position of buying
into your security and not

615
00:42:25,050 --> 00:42:29,310
making and, and just not telling
them not making sure that they

616
00:42:29,310 --> 00:42:34,710
understood that. So this idea of
suitability is critical. And the

617
00:42:34,710 --> 00:42:39,240
last thing that's often in a
private placement memorandum is

618
00:42:39,240 --> 00:42:43,680
the process. So what do you need
to do to invest? I've read

619
00:42:43,680 --> 00:42:49,290
through your ppm. I understand I
am ready to give you my $200,000

620
00:42:49,290 --> 00:42:52,710
today, what do I need to do?
That's oftentimes part of your

621
00:42:52,710 --> 00:42:57,270
PPM as well. Typically, the
process is after you've read the

622
00:42:57,270 --> 00:43:01,800
PPM and have the opportunity to
ask questions of the sponsor,

623
00:43:02,220 --> 00:43:05,640
then you will sign a
subscription agreement, you will

624
00:43:05,640 --> 00:43:08,820
fill out an investor
questionnaire, if you need to

625
00:43:08,820 --> 00:43:11,730
get accredited, get a third
party that say you're an

626
00:43:11,730 --> 00:43:15,570
accredited investor, you'll do
that you give those to the

627
00:43:15,600 --> 00:43:19,440
sponsor. The sponsor looks at
them says great, we're what

628
00:43:19,440 --> 00:43:22,920
happy to have you aboard. Now
you wire the money to the

629
00:43:22,920 --> 00:43:27,090
sponsor, and then you
countersign the subscription

630
00:43:27,090 --> 00:43:31,980
agreement that's most often the
the order of events. But it may

631
00:43:31,980 --> 00:43:34,530
be totally different. Maybe you
have some other thing, maybe

632
00:43:34,530 --> 00:43:37,410
they need to register on a
website or a portal or something

633
00:43:37,410 --> 00:43:40,500
like that. So this is the place
where you would describe that.

634
00:43:41,190 --> 00:43:45,870
Wow. So there is our big deep
dive into private placement

635
00:43:45,870 --> 00:43:49,920
memorandums. So I hope that you
have found this video helpful.

636
00:43:50,370 --> 00:43:54,780
Now, me i My name is Tilden
Moschetti. I am a syndication

637
00:43:54,780 --> 00:43:58,110
attorney with the Moschetti
syndication Law Group. What do

638
00:43:58,110 --> 00:44:02,190
we do? Well, we write PPM s. We
also put together operating

639
00:44:02,190 --> 00:44:05,220
agreements, subscription
agreements, questionnaires, file

640
00:44:05,220 --> 00:44:08,460
Form DS, notify states,
everything that's needed in

641
00:44:08,460 --> 00:44:11,610
order for you to start a
syndication, put together an

642
00:44:11,610 --> 00:44:15,960
investment fund, a real estate
fund, or raise capital for your

643
00:44:15,960 --> 00:44:19,470
business. This is what we do
every day. This is all we do

644
00:44:19,470 --> 00:44:23,850
every day is specialize in
Regulation D. If we can be of

645
00:44:23,850 --> 00:44:27,630
service to you. I'd be happy to
talk with you and see if there's

646
00:44:27,630 --> 00:44:31,380
a good fit. Give us a call and
we'll schedule an appointment