What is a Private Placement Memorandum (PPM)?
A private placement memorandum (PPM) is a legal document provided to prospective investors when selling shares of a real estate investment. It is sometimes referred to as an offering memorandum or offering document. A couple of things that will be in a PPM for a multifamily syndication.
Description of the company operating the apartment deal
A business plan
Structure of how returns are paid
Terms of the offering
Risks of the investment
Disclosures associated with the investment
Fees charged by the operating group
The PPM is a standalone document and has all for the information an investor would need to make an investment decision. They tend to be very descriptive and factual and they are not “sales pitches” although there may be some marketing elements designed to inform investors.