How to Read a PPM and Operating Agreement (Without a Law Degree)
Where to focus in the private placement memorandum, subscription agreement and operating agreement, and what to ask your attorney.
Read →For Attorneys & CPAs
For attorneys and CPAs: as investors and as advisors
You read documents for a living and your clients ask about syndications. Resources for your own investing and for client conversations.
Why it comes up
Why Attorneys & CPAs look at private real estate
- Personal investing with a professional's eye for documents.
- Clients asking about syndications, DSTs, OZs and oil and gas.
- Need for clear, neutral educational material to share.
What to watch
Considerations specific to you
- Professional rules on referrals and conflicts of interest.
- Referral compensation tied to investments can raise broker-dealer issues for the payer and recipient.
- Tax treatment varies widely by client; generic material isn't advice.
Accreditation
How accreditation usually applies
Most private real estate offerings are limited to accredited investors. Sponsors using Rule 506(c) must verify your status.
- Income test: $200,000+ individually or $300,000+ jointly in each of the last two years, with the same expected this year.
- Net worth test: $1 million+, alone or with a spouse or spousal equivalent, excluding your primary residence.
Summary of SEC rules for education. Confirm your status with your advisor; sponsors may request documentation. See who qualifies.
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Educational content only; not investment, tax or legal advice, or an offer to buy or sell any security.