Free Real Estate Offering Memorandum Template (PDF, Doc)

Transcript 0:00 is you want to make an offering 0:02 memorandum or what we call an OM uh also 0:06 referred to as a prospectus or a pitch 0:08 deck right I call it an OM real estate 0:10 lab 0:11 [Music] 0:21 all right guys 0:22 one thing I forgot to mention in the 0:26 video two videos ago raising Capital 0:28 process totally slipped my mind so I’m 0:30 just making a separate video on this is 0:31 you want to make an offering memorandum 0:34 or what we call an OM uh also referred 0:38 to as a prospectus or a pitch deck right 0:40 I called an OM offering memorandum and 0:43 uh this is something you want to create 0:45 right before you go under contract so 0:47 when you’re in between the LOI 0:48 acceptance and purchase agreement being 0:51 signed you want to start working on this 0:53 and I’m going to show you a screen share 0:54 here uh and the OM is designed to be 0:57 it’s our pitch deck for our investors 0:58 right it’s going to share all the 0:59 information on the deal the project what 1:02 we’re doing who’s the team that’s buying 1:04 it who’s involved how much money is 1:06 needed what are the returns Etc so I’m 1:09 just gonna walk through this PowerPoint 1:10 really quick show you guys what we all 1:12 include they do take some time to make 1:14 I’ll probably upload this for you guys 1:16 to utilize if you’d like it’s not a 1:19 perfect template but it gets the job 1:20 done and I’ve used it several times in 1:22 the past 1:23 um I have a newer one that we use I 1:25 couldn’t find a PowerPoint for this but 1:27 uh you guys could definitely uh utilize 1:30 this one to check it out it’s it’s 1:31 straightforward you can build your own 1:32 if you want and Rebrand it uh totally up 1:35 to you so 1:36 um obviously you just have a cover page 1:37 here 1:38 a disclaimer that this is not an offer 1:40 for investment uh solicitations will 1:43 only be made through PPM obviously it’s 1:46 just a general disclaimer uh executive 1:48 summary so what is the project what are 1:50 we doing what are we going to put into 1:51 it what’s it worth how many units 1:53 purchase price all that good jazz right 1:56 so we’re putting together all the 1:57 details of the deal on a little 1:59 executive summary uh investor high level 2:01 summary what’s our goal time frames what 2:04 we’re looking to do how much capital is 2:06 being put in when are we going to sell 2:08 the property 2:09 Etc 2:10 so we’ve got another little overview 2:12 here of the property itself what’s the 2:14 condition what are we going to do to it 2:16 what’s the unit mix construction style 2:19 Garden style number of buildings all 2:21 that kind of stuff this was 170 unit 2:23 that I bought in Fort Worth 2:25 um the location on a map 2:27 uh so we bought this property he’s right 2:29 down the street from another property I 2:30 own uh which I’m selling next week 2:32 actually here’s 136 units here’s the 2:34 170. 2:35 um and then we go into and throw some uh 2:38 sheets from our proforma so I just 2:40 pulled these tables directly from the 2:43 Excel model uh real estate lab software 2:45 and uh you pull these in 2:48 um operating expenses for your performa 2:51 unit mix projected rants a summary of 2:54 Renovations uh sources and uses so 2:57 what’s the total amount of money we need 2:59 renovation costs so this is the amount 3:01 of capital we need here’s the loan it’s 3:03 a 13 million dollar total project 3:06 acquisition fee closing costs all that 3:08 good stuff uh projected returns so we’ll 3:11 show like sample returns for a sample 3:13 investment depending on the size here’s 3:15 how much cash flow you’ll earn over the 3:16 course of the investment here’s the 3:18 profits at sale total gain if you put in 3:21 a hundred thousand you’re ending with 3:22 156 almost 157 right so it’s a 1.57 3:26 equity multiple so we’re just putting in 3:28 as much detail as we can for investors 3:30 so they can see what’s going on here’s 3:32 some photos 3:33 live Fort Worth sub-market 3:37 org chart org charts are really 3:38 important uh you know we outline who is 3:41 the management partner who are the 3:43 limited partners what’s the structure 3:45 this one was just a straight 80 20 split 3:48 um here is the entity that we’re buying 3:51 the property in total investment needed 3:56 investment structure Class A Class B how 3:59 is that going to be structured how are 4:02 we going to you know pay out profits 4:05 additional details on some tax and 4:07 timing when do we put out reports and 4:09 stuff like that and then finally what’s 4:11 the ownership team look like so 4:14 um not too crazy what is this 19 slides 4:17 I’ve seen them as little as eight sides 4:19 seven to eight slides and I’ve seen even 4:21 longer than 19. so this is probably a 4:23 little extensive I think my newer ones 4:26 will be trimmed down on them a bit so 4:28 this is another one that we put together 4:29 for a storage fund 4:31 obviously same thing disclaimer we got 4:34 an overview this one’s a little bit more 4:37 direct and to the point I think this 4:38 one’s 17 slides 4:41 of information on the fund 4:43 timeline 4:45 cap cap structure this is the capital 4:47 stack here 4:49 return expectations 4:52 fees org charts 4:56 are your locations for our properties 4:57 we’re buying active Holdings 5:01 this is uh examples of two projects that 5:03 we’ve got going on already in the fun 5:06 operators for the fun 5:08 management team 5:10 box 5:11 frequently asked questions so those are 5:14 both examples of what we are putting 5:17 together as our om for the investors uh 5:20 it definitely takes a little bit of time 5:21 you can spend several hours doing that 5:23 so I suggest doing it when you get your 5:24 offer accepted start putting all that 5:26 together so that right when you go under 5:28 contract you could launch it and start 5:30 sending that out to people that’s going 5:32 to be your best way what I do because a 5:34 lot of times the file sizes are really 5:36 large on these PowerPoints 5:38 save it as a PDF go to 5:41 ilovepdf.com compress the file and it’ll 5:45 turn it into something that’s like one 5:46 to two megabytes and then I can text it 5:48 out to people send it in emails and text 5:50 it out because sometimes the file size 5:51 is really big with the pictures and 5:54 stuff and so I love pdf.com I believe is 5:57 the website and go to their PDF 6:00 compressor upload it it’ll shrink the 6:02 file size down and then I I love texting 6:05 out to people because I’ve got a lot of 6:06 investors that are just normally like 6:07 hey text me deals when you get them and 6:09 I’ll throw you 100K and they’re good on 6:11 pretty much every deal I do and so um 6:13 those guys I love sending them out in 6:15 tags so we have a conversation I’ll give 6:16 a call but uh yeah that’s my strategy 6:19 put together an OM make it look pretty 6:21 straight to the point not too much 6:23 information and that is what’s going to 6:25 help you sell investors on coming in on 6:27 your projects all right guys so this is 6:30 your homework for chapter eight uh I 6:32 want you to take a couple minutes sit 6:34 down and write it right out or type out 6:37 a list of of everyone that you know in 6:40 your personal Network friends family Etc 6:43 that has Capital that you think has 6:46 Capital to be able to invest so write 6:48 down a list of all those people get all 6:50 their contact info together and then I 6:52 want you to call them up once you’ve 6:53 kind of got this plan put together call 6:55 them up and ask them have they ever 6:57 considered uh investing in real estate 6:59 have conversations with them start 7:01 talking about it tell them what you’re 7:03 working on like hey I’m looking to go 7:04 put together some real estate projects 7:07 um you know I’m really doing my homework 7:08 I’m starting to look at a lot of 7:10 properties a lot of deals and I want to 7:13 have a conversation with you about 7:14 whether or not you’d be interested in 7:16 investing in one of these projects we’re 7:18 looking to earn some really strong 7:20 returns and I wanted to personally 7:24 invite you to get involved with me on it 7:26 that’s that’s what I would do so that’s 7:28 step one of your homework step two of 7:30 your homework is find a good uh real 7:33 estate attorney that can draft ppms and 7:36 operating agreements you can just Google 7:38 this my favorite way is from a referral 7:40 but if you don’t have any referrals from 7:42 anyone just go on Google and look up 7:44 real estate attorneys in your city I 7:46 always suggest getting someone local you 7:48 normally have to have someone in your 7:49 state that is licensed to practice in 7:51 that state but the more local the better 7:54 somebody nearby that you could you know 7:56 meet in person and get to know it’s 7:58 always good to get to know your 7:59 attorneys since you’re paying so darn 8:01 much for them so those are your two 8:04 pieces of homework write down your 8:05 investor list your initial investor list 8:07 reach out to all of them talk to them 8:09 about investing just have that initial 8:11 conversation 8:13 tell them what the price is going to be 8:15 like and number two go find a good Real 8:17 Estate Law Firm that can handle your 8:19 transactional and SEC work 8:22 thanks 8:27 [Music]