Okay so you have been looking at plenty of offerings and finally chose one that fits what you are looking for. What’s next? 

Typically you will have to soft commit. This is simply filling out a basic form saying you are interested in investing in this deal. This does not bind you in any way. This rather serves the sponsor team as a way to keep track of how many investors are interested and when to stop accepting commitments. If that deal only requires $1,000,000 in capital from investors then by keeping track of soft commitments you can keep accepting commitments or advise investors that the deal has been fully subscribed.

Then within a few days you will be sent a series of documents which include: 

These documents are typically 200+ pages long. I know you don’t want to read them but you have to. 

A PPM typically breaks down with the offering you saw in the email, it will describe in detail the opportunity, the sponsor’s business plan, the structure of the investment entities, the capital stack, etc. 

Next comes the Operating Agreement, since you will take ownership of a portion of an LLC, this document will outline exactly what each person’s role will be. This will define the terms of the General Partners and the Limited Partners. It will include some terms and definitions and a section with how accounting is to be handled and if there are any voting rights from the members.

The last part is the subscription agreement, this is a document that you will sign that’s essentially saying you are agreeing to being part of the Operating Agreement and the terms specified. It will also ask for some personal information such as your name, address, Social Security number, and whether or not you are an Accredited investor. The sponsor team reserves the right to reject you as a member if they believe this investment is not suitable for you or if the offering has already been filled by the time you submit your subscription agreement. 

Once this is completed all you have left to do is to fund your investment. Typically shortly after having all your documents signed you will be given wire instructions from your sponsor. Wire transfer is the most common way of funding. Checks are not really a thing anymore.

That’s it! If you want to find out more about the process and what to watch out for schedule a call with me, go to my site www.BernhardtCapital.net and find the link to schedule a call. 

We have great investment opportunities for our investors as well, let’s see if we are a great fit. 

Satch Bernhardt

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