BPI Episode #14: How to Read an Offering Memorandum (OM)

In this episode, Wayne Courreges III discusses the importance of understanding the offering memorandum in real estate investing. He emphasizes the need to thoroughly review the private placement memorandum, subscription agreement, and company agreement before making an investment. The conversation covers key components of the offering memorandum, including the business plan, financial projections, capital stack, and risk assessment, providing listeners with essential insights for making informed investment decisions.

 

Takeaways

• Understanding the offering memorandum is crucial for real estate investing.
• Investors should not just sign documents without understanding them.
• The private placement memorandum contains vital information about the investment.
• The business plan outlines how the investment will generate revenue.
• Financial projections should be detailed and clear.
• Understanding the capital stack is essential for assessing risk.
• Investors need to be aware of market risks and property-specific issues.
• Alignment between presentations and documents is a red flag.
• Investors should feel comfortable with the investment timeline.
• Resources like passive investor coaching can accelerate learning.

Chapters

• (00:00:00) - Building Passive Income
• (00:01:00) - What To Read An Offerment Memorandum
• (00:07:00) - Offering Memorandum
• (00:10:28) - Capital Stack
• (00:11:59) - Reading the Offerment Memorandum