Top Questions to Ask Before Drafting Your Syndication's Executive Summary

The Executive Summary and “one-pager” are essential marketing tools to sell your real estate syndication offering to potential investors. They also lay out your business plan and projected returns for your prospects. 

How to Write an Executive Summary is an excellent starting point. Keep in mind that Eric uses slightly different terminology and describes the ‘one-pager’ as the Executive Summary and what I often call the Executive Summary as the real estate syndication Business Plan.

The key is to understand that the one-pager is designed to get your prospective investor to request more information and read the Executive Summary. The Executive Summary is designed to get your potential investors sufficiently interested to either want to talk to you in person or request the Private Offering Documents and write you a check.

There is no magic formula or template. Each Executive Summary is unique and reflects the person drafting the documents and the intended audience. Having said that, here are some of the questions you should consider before drafting your executive summary.

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Questions for Drafting Your Real Estate Syndication

Executive Summary

  • Will you offer your securities to non-accredited investors or limit your offering to accredited investors only? Offering your investment to non-accredited investors will require you to submit a Private Placement Memorandum with substantially more disclosures to all investors. Keep in mind that in general, accredited investors either have $1m in net worth, excluding their primary residence or earn $200,000 a year (if single) or $300,000 if married.
  • If accredited investors only, do you plan on generally soliciting and generally advertising your syndication? You can now do this, but this is a separate exemption and additional requirements will need to be met, including taking reasonable steps to verify that your investor is accredited. If you don’t, you will want to have a pre-existing relationship with your investor.
  • What type of syndication will you be sponsoring?
    • Project Specific
    • A fund with parameters
    • A blind fund (no parameters)
  • What is the “Problem” you are trying to address?
  • What is the “Solution” you believe will solve this problem?
  • What is the specific opportunity that addresses the solution to the problem?
  • What is your competitive advantage?
  • Who is on your Team and why are they the best people to lead this investment?
  • What is the primary investment objective of the syndication?
  • Cash Flow?
  • Equity Growth?
  • Rehab?
  • Flip?
  • Develop
  • Target Hold Period?
  • What kind of returns are you targeting for your investors?
  • Are there any other Sponsors other than you in this syndication? If so, have you conducted your due diligence on them and made sure they are not “bad actors” that would prevent you from claiming the exemption to registration?
  • What is the name of your Project, LLC? (This is the entity that will own the Property and investors will buy into it).
  • What is the name of the Manager of the company? (This is the entity that will be responsible for all decisions and will be the official Sponsor of the syndication).
  • Will you use a holding company to hold your ownership in the syndication?
  • What percentage of the Syndication do you plan to own and split with the investors? There will be 2 separate splits/compensation to consider:
  • What is the split or compensation from the monthly or quarterly Net Cash Flow generated by the Property's income?
  • What is the percentage equity interest in the Project when the project sells?
  • Will you provide any preferred return to the investors?
  • How often will you distribute cash flow, if available? Monthly? Quarterly?
  • What will the minimum investment be?
  • Will any of your investors need to sign on the loan (if financing is required)? If so, what type of additional compensation will you be providing them?
  • What is or are your exit strategies? How long do you plan on holding onto the property? Do you plan to sell? Refinance? Options for an exit for the investors?
  • What is the stabilization period? Will you be returning profits to investors on day 1?
  • How will you be compensated?

    • Acquisition Fee
    • % of the cash flow
    • Back-End equity participation
    • Disposition Fee
    • Re-Finance Fee

  • Do you plan to pay someone to help bring in investors? STOP! THIS IS PROHIBITED BY THE SEC unless they are a registered broker-dealer.
  • Will this be an all-or-nothing raise, or will you commence operations after reaching a minimum raise?
  • What are the risks involved in the investment, and how do you plan to mitigate (not eliminate) these risks as much as possible?
  • Are there any other facts that, if you were a potential investor in the deal, would have an effect on your decision to invest?

To sum up, there are a lot of considerations when it comes to drafting your executive summary. Hopefully, these questions serve as a useful resource to help as you develop yours. 

Reach out to us to learn more about developing your executive summary to market your offering to potential investors.

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This blog post is intended to provide general information and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship with Premier Law Group.


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