You and TIC: The Private Placement Memorandum (PPM)

Posted: Jul 25, 2008 | Comments: 0 | Views: 69 | Bookmark and Share

TIC: The Private Placement Memorandum (PPM) is a private offering for a tenancy in common. What this is in plain terms is a direct private offering for real property by you and several other investors. There are several things to keep in mind when considering TIC: The Private Placement Memorandum (PPM).

TIC: The Private Placement Memorandum (PPM) Laws and Regulations

TIC: The Private Placement Memorandum (PPM) is regulated by Regulation D of the Securities Act of 1933. This act was initially put into action to protect investors in businesses from unscrupulous practices, but over time it was found to be too cumbersome for smaller investments. Regulation D came into being to help facilitate smaller investments without regulation by the SEC.

TIC: The Private Placement Memorandum (PPM) is directly related to this as it is a direct private investment by smaller investors. This method of investing offers more practical ways for smaller business to conduct transactions. The Private Placement Memorandum, or PPM, is basically a prospectus that outlines what are the terms of the offering, the companies business, risk factors, additional terms, expenses, and a summary of the financial information.

This relates to the TIC by showing all of the potential profits, loads, and fees for property investors. The PPM will give you a good description of what risks and rewards you will be assuming by investing in the property, with the main purpose being an easy to read summary of what owning the property will involve financially speaking.

Other factors may be described in the PPM, but for the most part it is a financial disclosure that you can use to determine what is involved in your property investment. It is up to the all of the investors in the TIC to determine whether the property to be invested in is of value and the PPM can help in making that decision.

Use caution however as a PPM should not be taken in place of full disclosure, even though this is not required by the SEC. Another way to look at a PPM is that it is primarily a sales pitch by the property sponsor, so anything that sets off red flags for you as an investor needs to be looked into.

Take the time to read the PPM fully, but also understand that not everything you need to make a business decision to move forward will be in it. It can however provide a concise picture that could be enough to decide not to do a deal, however do not ever move forward with a PPM alone. Always consult with your financial planner before making investments.

(ArticlesBase SC #496507)

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