I know a syndication lawyer will prepare most of these documents regarding our investors, but I wanted to get an understanding beforehand what will be needed from my investor base when they start to invest in my MF deals.
I'm basically trying to manage my investors expectations in terms of all the forms they need to sign and background checks (source of income information) needed to verify whether they are a qualified investor (accredited).
@Tony L. a typical syndication will have three documents.
1. An operating agreement. You will be the only one signing this if you are the managing member.
2. A Private Placement Memorandum. This is a disclosure document for your investors to read. It typically has a copy of the operating agreement and the subscription agreement as exhibits. You investors don't need to sign this, but they should read it.
3. A Subscription Agreement. This is the document that your investors read, fill out and sign. Often times the subscription agreement will contain an investor questionnaire of some sort that is used to determine the suitability of the investor.
If you are not advertising your offerings and are organizing under 506(b) you don't have to do background checks, source of income, and verification of accreditation. Investors can self-certify.
If you plan to advertise your offerings, your offering needs to comply with the rules in 506(c) and you will have to have independent verification that the investors are accredited. To accomplish that, they might have to send tax returns and/or other verification of income and net worth.
Well, in addition to @Brian Burke 's list, if there is a JV at the GP level, there will also need to be an OA for that.
@Tony L. I second what @Brian Burke stated. In addition, I suggest you speak with your syndication attorney and ask for their guidance as well. Aside from the documents, you'd need to provide your investors with a timeline as to when do you expect feedback/forms/funds/sigs from them. A lot of folks tend to put it aside and do it last minute, so you need to be on top of managing your investors and assisting them in getting through the process especially if it is a first time for you and/or for them.
If you have more questions, feel free to PM.