Syndication - Purchase PPM Template Online?

Investor · Mount Ulla, NC · Member since 2013 · 35 posts · 15 votes

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!

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Michael Le

Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

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.

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Kyle Bryant
Attorney · Houston, TX · Member since 2016 · 61 posts · 38 votes
8y
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.
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Mike Montana
Investor · Indianapolis, IN · Member since 2017 · 62 posts · 38 votes
8y
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.
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Abel Sng
DFW, TX · Member since 2016 · 58 posts · 68 votes
8y
@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!
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Michael Le
Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
8y
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.
4 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
Start and finish with your securities attorney. They will have a "boilerplate template" already and will be familiar with it.
1 Reply
Khalil Bachir
Pompano Beach, FL · Member since 2017 · 36 posts · 6 votes
8y
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..
0 Reply
Kris Benson
Roswell, GA · Member since 2012 · 79 posts · 94 votes
8y
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
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Tyler Kastelberg
Real Estate Technology · San Francisco, CA · Member since 2016 · 262 posts · 265 votes
8y
@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.
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Matt M.
Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
8y
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.
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Ola Dantis
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
8y
@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
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Brian Adams
Syndicator of Large Apartment Buildings · Glen Mills, PA · Member since 2009 · 1k+ posts · 1k+ votes
8y
@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.
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Andrew Campbell
Multifamily Syndicator · Austin, TX · Member since 2015 · 127 posts · 247 votes
8y
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!
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- Asif Shahzad
  Member since 2025 · 29 posts · 1 vote
  1y
  Quote from @Andrew Campbell:
  
  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!
  Hi, can you recommend syndicator attorney. thanks
  0 Reply
Jonathan Twombly
Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
8y
@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.
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Khalil Bachir
Pompano Beach, FL · Member since 2017 · 36 posts · 6 votes
8y
Kris, thanks for the link. It was very helpful. I am not in the New York area but thanks for the offer.
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Garrett White
OP
Investor · Mount Ulla, NC · Member since 2013 · 35 posts · 15 votes
8y
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
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Michael Le
Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
8y
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.
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Dominic Bouchard
Professional · Los Angeles, CA · Member since 2017 · 67 posts · 34 votes
8y
@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!
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Garrett White
OP
Investor · Mount Ulla, NC · Member since 2013 · 35 posts · 15 votes
8y
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!
0 Reply
Weina Shi
Investor · Wellesley, MA · Member since 2017 · 85 posts · 15 votes
4y
@Andrew Campbell
Hi Andrew, a little dated post but would you mind sharing your PPM attorney’s contact information?
0 Reply
Zach Howard
Hong Kong · Member since 2024 · 161 posts · 57 votes
1y
Lawyer!
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Garrett White:

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!

No it is not recommended to purchase a template online - I would also strongly recommend against that as it will cost you more in the long run. If you use an experienced attorney they already have a template and will give you a form to complete with necessary informatiaon such as entity structure, waterfall structure, investment classes, hold periods, gate requirements, redemption rights, risk factors etc that you will need to complete.
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Denise SuppleeBusiness Member
Realtor · Willow Grove, PA · Member since 2017 · 1k+ posts · 652 votes
1y
My business partner and I have founded a coinvesting group that invests in many syndications. There are many things one must do to stay within regulations.
I would definitely put the money out for an attorney who specializes or there are various experts that offer courses that may be able to assist such as Michael Blank of the Deal Maker Mastermind and Neil Bawa of
MultifamilyU.
I wish you much success!

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