Out Line for a Prospectus

 The Prospectus Outline

 The prospectus is the offering circular and the sales tool for your real estate syndication. It has to interest the investor in making the investment and it need to be a full disclosure document. The advice of competent legal counsel is advised to assure that you are in compliances with your states rules. Your states corporate recorders office web site may provide the necessary information on number of investors allowed for a private placement and the disclosures required.. Keep in mind that you do not want an investor to become disgruntled with the investment and find that you did not make full disclosure.

There is a term used in advertising and sales called “Puffery”, it means being very optimistic without being misleading. You want to buff up the investments to get the prospect to make the deal. You also want to comply with the security laws and stay out of court. Be factual and truthful and still be optimistic. Remember you have to deliver on your syndicates projections so say what you mean and mean what you say. The following outline might be helpful but each prospectus is tailored to your states disclosure requirements and the needed information specific to your deal.

 Having said all this, keep the prospectus as simple and precise as possible or you risk loosing the prospects interest.

Your prospectus needs to cover the points concerning the investment.

The purpose of the syndicate, including a description of the investments property 

1. The ventures name
2. Describe the investments

   A description of the securities being offered. 

1. Number of investment units and the amount of each

2. Set forth limitations or minimums

3. Set forth the total amount to be raised.

4. Appropriateness of the investment.

5. Indicate who will be selling the securities.

6. Use of funds.

A description of the legal frame work of the syndicate and how that impacts investors.

1. Describe the how the syndicate is set up, LLP, LLC etc.

2. How does that impact investors

A description of the potential profit for the investors.

1. Describe the profit potential and provide details.

2. Describe distribution of funds to the investors.

3. A description of risk.

A description of the duties of the syndicator, general partner, manager etc.

Describe your duties and any others involved in the management

1. Describe and and all compensation, fees and charges by the general partner.

2. Describe and conflicts of interest.

A description of the tax consequences of the investment.

Describe investors income tax consequences

1. Describe method of depreciation.

2. Describe any tax status determination.

   Other

3. Information about the general partners-syndicator back ground

1. Any tenet information

2. Any planned improvement of appropriate.

3. Any insurance information that is appropriate.

4. Any financing details.

5. Any documentation.

6. Any instructions for investors on what to do next.

7. How to prescribe to the investment.

8. Any other disclosures.

Conclusion statement