Seeking advice: syndication term sheet and legal documents

[Au Jia]

Hi friends,

I want to start put together a term sheet that can send to potential limited partners (LP/investors). 

I was hoping to find a typical set of legal documents including a term sheet, a partnership agreement, typical payout structure, etc. I searched the file repository on BP, but not sure how actionable they are. For example, the promissory note document is too short to be airtight. 

These documents will be for entry-level commercial deals such as 10+ units apartments. 

- If you are an experienced investor/syndicator, your help is greatly appreciated!!

- If you are a real estate lawyer, please send me a private message. I would love to have a lawyer review the documents once drafted.

Thanks,

Au

[Ben Leybovich]

Originally posted by @John Corey:

Originally posted by @Ben Leybovich:

Originally posted by @Matt Ward:

@Ben Leybovich please elaborate?

 Matt, I'm simply saying that the overhead for a PPM and all that comes with it is too much for smaller deals.  

Ben,

To put a bit more meat on the bones for readers who are not used to syndications, what would you expect to pay for the 'overheads' if the deal size was $4M? Just a round number so others have an order of magnitude estimate.

 Well, the PPM and SA will cost you $25,000. Local attorney will cost another $7,000 - $10,000.

These costs are the same regardless if the deal is $500,000 or $5,000,000. But, obviously, on a $500,000 deal these costs alone constitute 7%. It gets hard to underwrite returns having loaded the deal with these costs.

Additionally, there's an engineering inspection, appraisal, survey, etc. And, they don't cost much less on a $500,000 deal than $5MM.