Not all will show up but it stimulates people to sign for the credit check. 

From the LPs perspective, it comes back to pros and cons, just like talking from the GP/Operator side.Since in-house property management really thrives at scale, when your GP has an in-house management team, it MIGHT create a conflict of interest.  

Sacramento is 9/10 (very good but slightly worse than large CA coastal cities)  Sacramento appreciationGood luck I went to a Brad Sumrok event a few years ago and there was like hundreds of LPs / limited partners and they did a macroeconomic high level view of apartment investing.

One thing about LPs is it is a flow through to your personal name and taxed as personal income.S-Corp and C-Corp are taxed at a corporate level. 

The GP got screwed and were force to buy the LPs shares at X$/share.

Your brother-in-law's lawyer friend might know a lot about the law, but that doesn't automatically make him a competent real estate operator.Finally, LPs could protect themselves to some degree by reading between the lines of the offering memorandum. 

How do the tax benefits the syndication provides LPs impact the return? 

Flippers can stimulate the market in ways that others cant.

If the investment is only $400k I would think you could get away with not doing a PPM.One thing you may consider doing is giving the LPs voting rights to make it clear that they are not buying solely securities.

They will testify that there was no operating agreement in place, and that you drafted one in response to the litigation, and you'll have no viable defense to that.I've formed many LLCs and LPs, I think my average cost for an LLC or LP agreement, fully reviewed by legal and accounting counsel, is around $4,000.