Securities Attorney vs Standardized Syndication Documents

Simply put, standardized syndication documents are a suitable option for most real estate raises. A securities attorney is valuable in cases where the deal structure is exceedingly complex. The guide below covers in more detail when each option is best.

What documents does a syndication need?

A real estate syndication usually rests on three core documents, plus the filings that go with them:

Operating agreement. Governs the LLC that owns the property: who manages it, how decisions are made, and how cash is distributed through the waterfall.
Private placement memorandum (PPM). Discloses the deal, the sponsors, the fees, and the risks.
Subscription agreement. The contract each investor signs to commit capital and confirm they qualify, including accredited status when the offering requires it.

These three documents have to work in harmony with one another for your particular asset, entity structure, and more.

What is a standardized syndication document?

A standardized syndication document is a form with blanks or options for the deal, such as the property, the raise amount, the preferred return, and the profit split. GrowIt's standardized syndication docs, drafted by attorneys, are built for many common real estate structures.

What does the law expect the documents to say?

The documents should make a few points clear:

How returns are distributed to investors (the waterfall)
How returns are distributed back to managers
Who has decision-making power for the deal
Who can invest
Information and acknowledgements about the investment and the risks associated with it

When are standardized documents enough?

Standardized docs suit most real estate raises.

Below is a list of a few combinations of what our standardized syndication docs can support.

What our docs support	Supported
Property-specific investments	✅
Strategy-based investments (property not known yet)	✅
1031 exchanges	✅
SPV to SPV	✅
Multiple unit classes	✅
Most waterfall structures, including preferred returns, return of capital, profit splits, IRR hurdles, GP catch-ups, and more	✅
GP fee payments (acquisition, construction management, asset management, and disposition)	✅

When should you hire a securities attorney?

A securities attorney is worth the cost when you need something truly custom, such as a more complex structure. Custom drafting costs more than standardized docs. The size of the raise does not, by itself, mean you need counsel. Who you raise from matters more: if a 506(b) deal takes any non-accredited investors, SEC rules require fuller disclosure and financial statements for them (Investor.gov: Rule 506 (opens in a new tab)), and that's a good time to bring in an attorney.

Where does GrowIt fit?

GrowIt is built for real estate raises. GrowIt's standardized syndication docs include hundreds of options for many common real estate structures. GrowIt prepares the full PPM, operating agreement, and subscription agreement for your deal. GrowIt offers guidance based on structures previous customers have used, without giving legal advice. It can help determine when its documents do not fit. A very complex or unusual structure may still need a securities attorney, and that custom drafting costs more.

Every deal is unique. Book a meeting to discuss whether GrowIt's standardized syndication docs fit your raise or whether your structure needs special attention.