Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Multi-Family and Apartment Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 3 years ago, 01/13/2022

User Stats

35
Posts
14
Votes
Garrett White
  • Investor
  • Mount Ulla, NC
14
Votes |
35
Posts

Syndication - Purchase PPM Template Online?

Garrett White
  • Investor
  • Mount Ulla, NC
Posted

I am interested in syndicating my first MF this year. Is it recommended to purchase a PPM Template online to give to your SEC Attorney to review/edit to save time and money of having the attorney draft from scratch?

If so, what site would you recommend? Does anyone have a PPM copy they'd be willing to share? I definitely don't mind paying but just uncertain about the direction to take. Thank y'all! 

User Stats

61
Posts
37
Votes
Kyle Bryant
  • Attorney
  • Houston, TX
37
Votes |
61
Posts
Kyle Bryant
  • Attorney
  • Houston, TX
Replied

I'm almost certain that any securities attorney you talk to will have several forms (or completed PPMs) that they draw from to draft new ones. They're already familiar with them and know how to make the right changes in the rights places, rather than looking at a new document without "home field advantage." I can't imagine there's an SEC lawyer out there that starts from scratch, but I could be wrong.  

User Stats

62
Posts
37
Votes
Mike Montana
  • Investor
  • Indianapolis, IN
37
Votes |
62
Posts
Mike Montana
  • Investor
  • Indianapolis, IN
Replied

Garrett- I’m not expert in this as we are learning as we are embarking on our first official syndication this year as well, but I have heard of a group called Bootstrap Legal https://bootstraplegal.com that can prepare “boilerplate” PPM and streamline the process. I’ve not used them but you might investigate them. I look forward to hearing about your success.

NREIG  logo
NREIG
|
Sponsored
Customizable insurance coverage with a program that’s easy to use Add, edit, and remove properties from your account any time with no minimum-earned premiums.

User Stats

58
Posts
68
Votes
Abel Sng
  • DFW, TX
68
Votes |
58
Posts
Abel Sng
  • DFW, TX
Replied

@Garrett White if you're using an SEC attorney let them tell you what you need in the PPM. Main thing you'll want to walk through with them is the company agreement or operating agreement. This is where it will spell out the structure of your LLC, how distributions will be made, etc. FYI, not all SEC attys are equal. This is an area worth spending a few more bucks on. To give you an idea, we pay ours $15k an offering. This gets paid by the LLC at closing so you shouldn't have to come out of pocket for it.

Good luck!

User Stats

1,635
Posts
1,363
Votes
Michael Le
  • Developer
  • Houston, TX
1,363
Votes |
1,635
Posts
Michael Le
  • Developer
  • Houston, TX
Replied

I think in the end it might cost you more for your attorney to go through and vet that all the information in your template is correct. Any SEC attorney worth their salt would probably decline using it and if you insisted, probably would not work with you.

Just budget $10-20k for an SEC attorney and another $2-5k for transactional attorney as part of your closing costs. You only lose that money if you fail to close as otherwise it would be paid out of the funds raised in the syndication.

User Stats

3,004
Posts
3,648
Votes
Todd Dexheimer#2 Multi-Family and Apartment Investing Contributor
  • Rental Property Investor
  • St. Paul, MN
3,648
Votes |
3,004
Posts
Todd Dexheimer#2 Multi-Family and Apartment Investing Contributor
  • Rental Property Investor
  • St. Paul, MN
Replied

Start and finish with your securities attorney. They will have a "boilerplate template" already and will be familiar with it. 

User Stats

36
Posts
6
Votes
Khalil Bachir
  • Pompano Beach, FL
6
Votes |
36
Posts
Khalil Bachir
  • Pompano Beach, FL
Replied

While we are on the topic; I have heard multiple opinions on this question by highly experienced folks as we have on this post. As a first M.F deal, is a syndication too much risk to take on? Love to hear your input..

User Stats

79
Posts
94
Votes
Kris Benson
Pro Member
  • Roswell, GA
94
Votes |
79
Posts
Kris Benson
Pro Member
  • Roswell, GA
Replied

Khalil,

Keep in mind that in a syndication of any deal the PPM and LP Agreement are the documents that govern the relationship between the investors and the sponsor.  Just like you are completing your due diligence on the property you wish to syndicate don't overlook the due diligence on your real estate attorney.  They can be the difference between success and massive failure/litigation. 

So many of us who have found success in real estate can point to a great team around us who has provided guidance and wisdom and I count my attorney as part of that team.  Not sure where you are looking to syndicate but if its in NY message me and I would be happy to be able to provide the referral to my attorney.

Also check out the following link 

https://bootstraplegal.com/realestate/

I have never worked with them but the CEO is speaking The Best Ever Real Estate Conference next week in Denver, CO.  Looks like a really innovative way to approach legal services. 

Hope that helps.

Kris

  • Kris Benson
  • User Stats

    262
    Posts
    264
    Votes
    Tyler Kastelberg
    • Real Estate Technology
    • San Francisco, CA
    264
    Votes |
    262
    Posts
    Tyler Kastelberg
    • Real Estate Technology
    • San Francisco, CA
    Replied

    @Garrett White

    Contact @Dominic Bouchard

    He runs a neat startup that might be able to save you considerable money on legal costs. I haven't used them, but I intend to give them a chance on my next syndication.

    User Stats

    2,518
    Posts
    1,276
    Votes
    Matt M.
    • Realtor
    • Denver, CO
    1,276
    Votes |
    2,518
    Posts
    Matt M.
    • Realtor
    • Denver, CO
    Replied

    If you are going to be raising funds from savvy investors, I'd come correct. Hire the attorney, especially since you'll need one anyway, and focus on the deal. 

    User Stats

    1,916
    Posts
    2,231
    Votes
    Ola Dantis
    • Multifamily Syndicator
    • Houston, TX
    2,231
    Votes |
    1,916
    Posts
    Ola Dantis
    • Multifamily Syndicator
    • Houston, TX
    Replied

    @Garrett White Great advice from the above posts. I just wanted to add that saving time/money isn't synonymous with syndications. 

    You are better off spending the resources on the front end to ensure that you and your investors are protected. 

    Hope this helps, Garrett. Goodluck on your first MF deal. Thanks! - Ola 

    User Stats

    1,007
    Posts
    1,629
    Votes
    Brian Adams
    • Syndicator of Large Apartment Buildings
    • Glen Mills, PA
    1,629
    Votes |
    1,007
    Posts
    Brian Adams
    • Syndicator of Large Apartment Buildings
    • Glen Mills, PA
    Replied

    @Garrett White depending on who use as your SEC Attorney, to prepare a PPM, operating and subscription agreement will cost about $10 to $20k.

    My suggestion is don't DIY when it comes to the many legal aspects of raising money from investors. 

    Find a reputable SEC attorney and spend the money to ensure you are protected.

    User Stats

    127
    Posts
    247
    Votes
    Andrew Campbell
    • Multifamily Syndicator
    • Austin, TX
    247
    Votes |
    127
    Posts
    Andrew Campbell
    • Multifamily Syndicator
    • Austin, TX
    Replied

    How much does the template cost?  We have an SEC attorney that focused solely on doing PPM's, and work with a different attorney for entity creation, contract negotiations and closing help.  Our PPM's have been running us under $7k per deal--not insignificant but doesn't break the bank either.  

    As has been stated already, you don't want to skimp on the legal side of things with either the SEC or your investors. 

    Good luck!

    1-800 Accountant logo
    1-800 Accountant
    |
    Sponsored
    Unlock Year-End Real Estate Tax Savings: Buy your accounting services now and deduct them on your 2024 taxes. Flat rate, never hourly.

    User Stats

    722
    Posts
    1,260
    Votes
    Jonathan Twombly
    Pro Member
    • Rental Property Investor
    • Brooklyn, NY
    1,260
    Votes |
    722
    Posts
    Jonathan Twombly
    Pro Member
    • Rental Property Investor
    • Brooklyn, NY
    Replied

    @Garrett White, this is an area to take very seriously, because there are real penalties for messing it up, including fines and being barred from doing syndications in the future by the SEC.  If you are dealing with an attorney who is not already an SEC expert and doesn't already have their own in-house form that they have developed over time to account for the evolving legal landscape, stop dealing with them right away.  This is an area in which it is critical that you hire someone with real experience, even if they are a bit more expensive.

  • Jonathan Twombly
  • Podcast Guest on Show #172
  • User Stats

    36
    Posts
    6
    Votes
    Khalil Bachir
    • Pompano Beach, FL
    6
    Votes |
    36
    Posts
    Khalil Bachir
    • Pompano Beach, FL
    Replied

    Kris, thanks for the link. It was very helpful. I am not in the New York area but thanks for the offer. 

    User Stats

    35
    Posts
    14
    Votes
    Garrett White
    • Investor
    • Mount Ulla, NC
    14
    Votes |
    35
    Posts
    Garrett White
    • Investor
    • Mount Ulla, NC
    Replied

    Wow, I’m overwhelmed with the great responses. Thank you all for your input in making sure I take the right next steps. 

    How important is it to have an SEC Attorney from the state you’re from and considering purchasing real estate in? I’ve listened to multiple podcasts with reputable SEC Attorneys but they’re all out of state and wasn’t sure if that would make a whole lot of difference 

    User Stats

    1,635
    Posts
    1,363
    Votes
    Michael Le
    • Developer
    • Houston, TX
    1,363
    Votes |
    1,635
    Posts
    Michael Le
    • Developer
    • Houston, TX
    Replied
    Originally posted by @Garrett White:

    Wow, I’m overwhelmed with the great responses. Thank you all for your input in making sure I take the right next steps. 

    How important is it to have an SEC Attorney from the state you’re from and considering purchasing real estate in? I’ve listened to multiple podcasts with reputable SEC Attorneys but they’re all out of state and wasn’t sure if that would make a whole lot of difference 

     Obviously I'm no lawyer but I don't think it is important. Most of the laws regulating this are federal laws. Obviously there will be some state specific items but any good lawyer will know that too. For what it's worth, my lawyer is based out of CA for my deals in TX.

    User Stats

    67
    Posts
    34
    Votes
    Dominic Bouchard
    • Professional
    • Los Angeles, CA
    34
    Votes |
    67
    Posts
    Dominic Bouchard
    • Professional
    • Los Angeles, CA
    Replied

    @Garrett White  


    Agree with @Kris Benson on lawyer due diligence.

    Let's face it, if lawyers were free (or very cheap) almost nobody will ask the question should I hire one or not.

    This is complex stuff, often case by case specific and time-consuming. Plus we're all trying to sleep well at night.

    This is why it's a pretty good reflex to find a way around such as a boilerplate template. Some are available for free or for a low cost on the Internet. Here's the thing:

    For simple contracts its a very usable solution. You just need to be sure those contracts are compliant with your states and are designed for the intended purpose (BP did an awesome job putting those together: http://get.biggerpockets.com/forms/index/)

    But when a lot of money is in the balance or complex/specific things are required, it might not be the best solution.

    Here's why:

    1. Chances are you're going to need an attorney anyway to finalize the document. In that case, you'll need a lawyer that will accept to work with your template which is rare since they all use their own template. Why? Because they know its good quality and its state compliant so they don't have to waste time checking it all over.

    (It's possible that you know a very good attorney that will not charge you for that (revision) but it's rare)

    2. Time - getting in par with all the intricacies when filling a template yourself can cost you more time than hiring a lawyer (again, if it's fairly simple then it's a different story)

    3. Peace of mind: Lawyer's work comes with an insurance - their signature. If something needs to be revised or goes wrong, they're responsible.

    4. Last but not least, a good lawyer will also provide valuable info on how to conduct your affair in the future or what you should look out for. This, to me, is the most important part. You want professional advice and should come more intelligent after getting it.

    In sum, for PPM copy, getting an online template is not best.

    Hope that helps!

    PS:

    @Tyler Kastelberg   Thanks for the mention!

    User Stats

    35
    Posts
    14
    Votes
    Garrett White
    • Investor
    • Mount Ulla, NC
    14
    Votes |
    35
    Posts
    Garrett White
    • Investor
    • Mount Ulla, NC
    Replied

    Thank y'all for the advice! I have researched the local attorneys, and have reached out to my SEC attorney to begin reviewing my business plan and marketing material to ensure we stay compliant. Thanks again!

    User Stats

    84
    Posts
    14
    Votes
    Weina Shi
    • Investor
    • Wellesley, MA
    14
    Votes |
    84
    Posts
    Weina Shi
    • Investor
    • Wellesley, MA
    Replied

    @Andrew Campbell

    Hi Andrew, a little dated post but would you mind sharing your PPM attorney’s contact information?