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What is a PPM?

Welcome back guys! Today I'd like to take a deep dive into a document you will become familiar with when investing in Syndications.


PPM's...


A PPM stands for private placement memorandum, sometimes also known as a private offering memorandum.


This is the document that outlines the investment securities terms, details and the primary risk factors associated with investing in an apartment syndication.


This legal document is provided to all prospective investors and is signed in conjunction with your reservation to commit your funds. Private placements are regulated by the securities and exchange commission (SEC) and as such are drafted by SEC attorneys.


Additionally, PPMs can be issued for:

  • The sale of common stock in a corporation

  • Notes (debt) of a mortgage broker business

  • Promissory notes (debt) of an LLC

  • Shares in a mutual fund held by a trust or

  • Sale of bonds by a county financing authority

There are several sections included in a PPM such as:

  • Risk factors

  • Conditions and disclaimers, including statements for specific states

  • Use of proceeds

  • Dividend policies

  • Facts about management

  • Restrictions on the securities, most commonly on transfer or resale.

All in all, do not skip reading this as a prospective LP looking to hold an equitable interest into a private investment.


I'm here for any questions you may have. Please do not hesitate to reach out! I love chatting with you all.


Nicole






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