This week we've got an episode PACKED with amazing information and advice from legendary real estate attorney Gene Trowbridge on what to look for when investing in a security deal.
This week we've got an episode PACKED with amazing information and advice from legendary real estate attorney Gene Trowbridge on what to look for when investing in a security deal.
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This week our guest is Gene Trowbridge who has over 25 years of experience in creating and sponsoring real estate investment groups. We're diving deep into what goes into the PPM, the operating agreement, and more importantly, what key aspects and elements you need to understand to set realistic expectations for your investment and returns.
Prior to becoming an attorney, he was a real estate syndicator. He developed numerous mini-storage facilities using money from private investors. In addition to his law practice, Gene is a pre-eminent educator in the world of real estate and syndication. Gene has served as a senior CCIM instructor for a number of years and he has written a comprehensive book on real estate syndication entitled It’s a Whole New Business, which has sold over 10,000 copies. Gene has conducted a number of highly regarded intensive workshops for real estate Syndicators, teaching them how to legally raise money from private investors.
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KEY TAKEAWAYS
1. Accredited investors don't have protection from the government and a sophisticated investor does.
2. Key questions to ask the sponsor as an investor:
3. There should be two managers: an LLC or S corporation and another living person. You need a second person as a manager for continuity should something go wrong.
4. The PPM should have at least the description of the business, the offering terms, and conflicts of the manager, sources and uses, distributions and fees, authority rights, liquidity, and dispute resolution. The PPM is the story and explains, in the detail, the full aspects of the deal.
5. The members should always have the right to replace the manager.
6. Before going into a deal it's VITAL that you read through the operating agreement fully.
7. Find a PPM and study it before you invest so you can understand how it all works.
8. You can ask questions about the deal to the attorney that drafted the terms but the person who's representing your interests has to be your attorney.
Steven: [00:00:00] Have you ever felt completely overwhelmed when looking at the legal documents for real estate syndication? Well, today's episode, I'm super grateful we've got a phenomenal teacher, trainer and attorney with decades of experience. Gene Trowbridge, who's going to be diving into some specifics on what you need to be looking for when it comes to investing in a security, what goes in that PPM, what goes into the story, and the rules and the operating agreement. And most importantly, what are some of those key things that you want to be looking out for, and understanding that go into setting those expectations for your investment. So if you're ready to learn that, let's get into it.
INTRO: This is the investor Mindset Podcast and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode we explore lessons on motivation and mindset from the most successful real estate investors and entrepreneurs in the nation.
Steven: [00:01:02] Investors have you grabbed your copy of the Passive Investor playbook yet? If you haven't, I recommend you go pick up the Ultimate Guide to passive real estate investing at theinvestormindset.com/passive. You can grab that in the show notes right down below as we've interviewed tons of the top experts and brought together all of the knowledge that we have on passive investing so that you can lay a foundation for yourself to make sure you're making the right decisions in your investing career. You can grab that guide at theinvestormindset.com/passive. I hope you'll take advantage of it. And let's get back to it.
Steven: [00:01:47] Alright guys, welcome back to the Investor Mindset Podcast. I'm your host, Steven Pesavento. Today, I'm very excited I have got in the studio, Gene Trowbridge, who is a phenomenal experienced syndication lawyer to dive into some really strong stuff with us, how are you doing Gene?
Gene: [00:02:04] Steven, I'm doing very good this morning. I don’t know where you are. I'm out in Southern California it's 6:30. So I'm having my first cup of coffee, Steven. There you go.
Steven: [00:02:15] No better way to get the morning going than with a good conversation about real estate in law. And as you guys know, Gene is the founding partner of the road bridge Law Group where he concentrates on syndication of commercial investment, real estate through both debt and equity. And between his individual syndication practice and the firm's legal practice, they've written offerings for more than $5 billion of money raised. And what I'm really excited is that Gene was a former syndicator, he raised money for 10 years of investor capital through the broker dealer community, and he really understands deeply what is most important when investing in these deals, what you need to be looking for as a passive investor, what kind of legal documents you can put together as an active investor, and all the things in between. So we're going to dive into some syndication one on one, specifically some of the pro tips for passive investors and what you really need to know, so you're ready to dive into things Gene?
Gene: [00:03:15] I am. I got to tell you Steven that my syndication career started in the Twin Cities, I was living in the Twin Cities in Minnesota, when I was younger, graduated from college there and bought some single-family houses as investments, and didn't care much for the management of those. So three fellows I went to college with at a college called St. John's University, and we each put the $10,000, down to collectively super $40,000. And back then, we bought a 10-unit apartment building in West St. Paul. And that was the beginning of my syndication, career, like so many other syndicators. I didn't have enough money to go and buy the bigger property I wanted to buy by myself. So I had to pull money. And that's how I got started working with investors. And that carried on for a long time in that part of my career. Then as you said, I left that career and sat around the kitchen table one day with my wife and I said what am I going to do for the last 15 years of my working life? Let's go to law school. So at 45 I went to law school and that was 27 years ago. A 15-year career [00:04:43 Unintelligible] and so far in 27 years and I love being a lawyer and all I've ever done is syndication securities work. And as you said I bring the practical experience to the people I represent and that’s great.
Steven: [00:04:45] Well, it's such a unique path to go down starting out "Hey, what's up St. John's, I'm a Johnny as well, for all you Minnesotans out there. Great to have another Johnny on here, I know you graduated from U of M as well. But it's so great to have somebody in the legal chair who also was a syndicator, who's been through that on the other side, as an investor and as an operator. So I think that's really strong. So tell me, kicking things off what's been the single factor, the one thing that's opened up the most opportunities, or led you to the greatest success in business?
Gene: [00:05:36] Education based marketing. As you know, I do a lot of educational stuff and I've been doing it for years, during my 40 years as a CCIM teacher, and at my own workshops, in this 27 year as an attorney, I provide education. And by educating and mentoring I get my fair number of clients. And I love it. Mentoring is a big deal to me; education is a big deal. And that's where I get all my stuff and I know that your audience has a lot of passive investors, and I want to talk about that too. But for the syndicators, the people who want to put together deals, there's no problem with going out and educating people. You know, everyone worries about advertising and all that and restrictions on advertising. But you can always do generic presentations, and tell people. I used to go around and do public seminars and tell people about the different types of entity structures that were out there. If you weren't going to buy real estate on your own. How could you invest in real estate, to reach through Limited Partnerships, through LLCs and just explain how those worked. And that was great. So there are a lot of things you can do that are generic that let you stand in front of people. But you know, Steven, I think there are four questions that your passive investors should ask. Can we talk about those to start with?
Steven: [00:07:24] Yeah. Let's definitely talk about those. And right before we do, though, would you talk to me a little bit about your definition of syndication and why it's so regulated so closely and why that's important?
Gene: [00:07:37] Well, sure. I get a lot of what I call homework calls, people call me and say I'm thinking about doing a deal or I'm thinking about investing in someone's deal. And it's going to be 5 to 10 people, and I don't want it to be a syndication. Well, that's the wrong question. Two or more people, combining their resources and their experience for some business purpose is indication. For example, you go to the movies or watch a movie on Netflix at the beginning, they have all these different companies that were involved in making the movie. Well, that's a syndication. I can think of a number of things and maybe even flying in a commercial airplane, when 146 of your best friends all buy a ticket, we hire equipment and professional management to take us somewhere that's really a syndication. But the real question is I want to put 10 people together, and I don't want it to be a security. So that's where we go from syndication to security, based on the fact that someone is managing the passive investors money. And to your point, the federal government way back in 1933, felt that there was a need to put some regulations in place to protect the investors when someone else is writing their money. And so there are two rules we work on today. One rule is basically you've got to give the investor full disclosure. That's all the material facts, so the investor can make an informed decision before they invest. That's one rule. And the second rule is we need to regulate who is selling securities. So that takes you into licensing and all that stuff that goes on. So those are the rules we still work with today and it's all about protecting the investors yet, Steven, when the rule was written, they realized there was a whole group of investors who didn't need protection from the government. So they called those accredited investors, rich and smart people. And that's still the same. In fact, we are seeing an expansion of sponsors' ability to raise money, if they just concentrate on the rich and smart people. So everything is the same. Nothing's changed in almost 90 years now. And it's built to protect the investors.
Steven: [00:10:17] Yeah. It's amazing and it's so good to understand why they've separated out accredited versus sophisticated investors because if you're sitting on the other side, and you're thinking to yourself, "Well, hey, I'm accredited, or maybe I'm sophisticated, well, what's the difference and why does it matter? " And what it sounds like in my understanding of it is, they want to protect the folks who maybe have more to lose and the thought is that if you're an accredited investor, you're making a significant amount of money, you most likely have the experience and the ability to lose that money. But you have the experience to know what risks you're taking. Is that pretty accurate?
Gene: [00:10:56] Yes. The accredited investor, the rich and smart person as the government feels the experience and education to ask all the questions they need. I mean, you could take it to a logical extent where I don't work with this thought. But if you were putting together an investment with five accredited investors, let's say and I'm only picking five and a number, it could be eight, it could be whatever. And all accredited, you really don't need to write a private placement memorandum because the government says, "well, those people are smart enough to ask the questions of you. And if you give them good answers, they're smart enough, and they can withstand the risk, to invest on their own." One of the reasons I went to a small number, like five or seven is that you still as a sponsor, my clients still have the requirements for full disclosure. And my feeling is you can't do full disclosure, that's all the same at the same time, unless you put it in writing. And then you'll never be able to defend yourself if challenged, if you didn't put it in writing, and chances are the investors didn't hear at all. They didn't hear it all the right way. They're making some decisions based on different information. So put it in writing, give it to the investors, and everyone knows what's going on. I think that's the only way I work. I won't do a deal if the potential client doesn't want to write a private placement memorandum, and we're going to talk about what's in that.
Steven: [00:12:28] Yeah. We're definitely going to talk about that. And what's really important for investors to know is that the reason that there are these big, long legal documents is because that's the form of disclosure that Gene's talking about here, where all of the information is put in, all of the potential risks that should be disclosed that the SEC has decided and other attorneys have decided needs to be disclosed to investors. That's all put in one document and then of course, there's the operating agreement, all the pieces that go along with that, which we'll talk about in a second. But what do investors need to know before investing in a security within a syndication?
Gene: [00:13:18] Okay four questions. Absolutely the most important questions and this is important for investors, because they need to ask these questions. And it's also important for the sponsors and syndicators so they better have an answer. First question, Steven, I like your deal. I've got the $50,000. If I invest my money with you, Steven, what happens if something happens to you? Number one, question, every once in a while, someone calls me and asks me to look at documents because they're getting ready to invest and I don't do that as part of my practice. But I go through these questions with them and I say if you looked at the document, what's the structure of the manager? If it's just one person don't invest. All sorts of things can happen to that one person who really has your money and not dying, that happens, but very seldom, it's other things that can happen bankruptcy, divorce, lawsuits, illness, I had one sponsor who I had to take over for who hit his head on a rock skiing up in Park City and spend a year upside down in traction in a hospital and came out a paraplegic. So a lot of things can happen. First question is their continuity, does that protect your money? Number two, "hey Steven, have you done this before?" All of us, including myself had to answer that question. No. I haven't done it before but I have something going for me and in your first deal a lot of the investors are going to know you and trust you and invest because of you. That's what investors want to do. They want to invest because of the person. So you have to look and see what the track record is. And so that's why it's so important for a sponsor to get their first deal done. So you can say, "hell I've done this before. Once." That's okay. That's a start. Third question. "Hey Steven, I [00:15:30 Unintelligible] in the game, are you going to put any money in this deal? And today, that means two things. That means number one, maybe there's some cash coming from Steven that's going in the deal. And number two, maybe Steven is being asked by the lender to sign the mortgage. So there are two ways you can have skin in the game and I think that an investor should ask that question. Now, it's somewhat of a marketing question. If in fact, the sponsor doesn't have any skin in the game. Why is that? And does that really make a difference? But it's a great question to ask. And then the fourth question is, from the investor standpoint, Steven, what happens if something happens to me? Is there liquidity or how am I going to get my money back because in reality, if you take 20 or 30 investors in a deal that lasts for seven years, something's going to happen to one of the investors, and you're going to have to have liquidity. So Stevens' answer is, well, we have an operating agreement that's professionally drafted and in Article 11, and 12, we have a full blown plan for liquidity. So those are the four questions I think every investor should start with. And we haven't talked about cap rate or cash on cash. We haven't talked about any of that stuff.
Steven: [00:16:54] So before we move on to that, Gene, I'm going to keep us on this topic here. So we talked about four things that are absolutely incredibly important. Just to summarize, for the listeners, that's continuity, making sure there's a succession plan of who's going to be managing if something should happen to that manager, two is understanding the sponsor, or managers experience, what kind of skin in the game do they have either cash or recourse on that loan? And four of course, what happens if something happens to me as the investor? So when we're talking about continuity, we're talking about having other managers in place, if it's a single manager operation organization, typically what I've seen in most of these legal documents is that the investors have the right to vote in a new manager. What is your recommendation that you like to see or look for in those documents that kind of outlines who's going to be in charge if something should happen, and when that actually does come down, it actually does happen in real life. How does that process work for investors on replacing a manager?
Gene: [00:18:05] Well first of all, there should be two people in the manager, there should be an LLC, or it could be an S Corp, it doesn't make any difference who's acting as the managing member, and there should be a second living person. So we don't have to, in the middle of a disaster, or catastrophe or stress, figure out who to vote in if the members don't want to be manager. If they wanted to be managers, they would have bought their own property. They don't want to do that. So you need to have someone in place right away, then my documents say that with a 75% vote, we can replace the manager. But what about the day after the event? What about the fact that the lender, and other people have documents out there, and the operating agreement says that the manager is the only one who can sign the documents, and now the manager is gone? I don't care who you vote in, we're talking three, four months to solve that problem. Put a second person in there that has the ability to sign documents, and be there. And then you can take your time and you can worry about who's going to be there, who's going to be the replacement and that second person doesn't have to be, well, let's put it this way. They can be a very minority owner in the manager entity to start with. They're just there for continuity, I think it's very important and a lot of times when you go to the lender if you don't have a second person in there for continuity. The lender, Fannie or Freddie depending upon the size of the loan is going to require you to have a springing member. They're going to require you to go to a corporation, an On - going Corporation, and that has a department like this. And you will have to get that corporation to name a certain officer to be the springing member. Now that officer can come and go, but the title, and the place is still there. So if something happens, the lender can immediately go and enforce the springing member provision the next day, and their full documentation that says the next day the springing member has all control and can write and sign all the documents. So I don't think you can say Steven that "Well, yeah, if something happens, Larry will take over well, seven years from now, where the hell is Larry?
Steven: [00:20:51] Yeah.
Gene: [00:20:51] You can't do that. Let's solve that right now and then we still put in place that we can replace a manager, we have one situation I'm aware of right now where the sponsor died and the family member of the sponsor was the second person. So nothing stopped. Everything continued on, but the family member really wasn't the answer for the long term. So now we're going ahead and we're voting, and we're going to get a replacement person, but at least there were no hiccups.
Steven: [00:21:30] Of course. Well that makes a lot of sense. So moving on to the PPM, I know, you're really excited to talk through all these different pieces, walk us through what's important, and what goes into that document.
Gene: [00:21:42] This could be a whole day, so we're not going to do this. There was a rule for a long time, it's called Guide Five, and Guide Five, it's part of the securities laws under regulation D, which is how we do all of our business. And it told you what should be in a private placement memorandum for a real estate offering. And that guide has been revolved but we all write our documents kind of the same way. There's some art in writing private placement memorandums, but there are also some rules. And I've made this picture and just quickly, if you're going to go through PPM, which is the story, this is the first document, I write for a client, I write the story, I send it to the client. If I do, then I can draft the operating agreement, which are the rules and the subscription agreement. But the first thing you have to have, it doesn't always have to be in this order. You have to have a description. What are you doing? Are you buying an apartment building? Are you building Self Storage, which I did. And you talk all about that, in my documents, a lot of the description of the business ends up in the property information section as an exhibit, I draft documents where exhibit number four to the PPM is the property package that the investor can get that shows the pictures, the rent roll, and all the spreadsheets, and I make that separate because I don't want to have to change this document, as we're going through three or four weeks while this is all happening. Due diligence, gives you different numbers. So this document stands alone, but description of the business is important. The offering terms, we're raising $3 million, the minimum investment from any investor is 50,000. You can raise more if you want, the offerings going to start on a certain day and continue until some day in the future, then risks. Actually, the old Guide Five had risks coming right after the description. If you invest in this, you're going to lose all your money. Okay, well, that's fine. But there are all sorts of risks and generally, Steven, the risks are in groups. There's the risk in investing generally in real estate. There are risks related to investing in this particular piece of real estate. This is not all boilerplate. The PPM needs to tell the investor about this investment. I've been in court as an expert witness when someone's been on the stand and they had a PPM and the judge says I can't even tell what property this is about. Well, that's bad. So what are the risks of this property? What are the risks of the economy during the projected holding period? What are the risks of the environment? And what are the risks of tax law changes. So it's kind of a heavy duty section and some of it is boilerplate because you get into the risks of the tax law, depending upon where we are in the legislative cycle that section might be the same for two or three years in a row. But real estate in this particular property is pretty important, then we get into conflicts. And this really relates to the manager's business. Does the manager already have 16 offerings out there? What are the conflicts if one of those offerings starts falling apart and the manager is asked to fund a manager your loan? Does he have to? If he funds it for one, does he have to fund it for all? What if the manager is a real estate broker and a syndicator at the same time, what are those conflicts? What are the conflicts about the manager, let's say you're a manager, and you're out raising money for apartment buildings? And you're just always looking at apartment buildings. Well which offering gets which apartment building? So there's a lot of conflicts, those are important sections to read.
Steven: [00:26:19] So, so far, what we've talked about really is the PPM is this governing document, or I should say it's the governing story that kind of outlines all the information that an investor would want to know and need to know. So they can really understand well, what is it that I'm investing in? What are these risks that are potentially there? What are the offering terms? What is this all about? And then obviously, we're going to go further into detail, but just want to make sure people really understand that the document is really telling the story over the rules, which are the operating agreement, which we're going to talk about as well.
Gene: [00:26:58] Right. Then we get into the suitability standard, who can invest? Can we take sophisticated investors or is it only for accredited or can it be both? That's fine. Sources and uses. There's a chart in there that tells people where -- let's say we raise $2 million? Where does the $2 million get spent? The sources come from the investors, and then they use us in a chart form and that's very important. So you can compare different offerings, distributions and fees, who gets what? How is the cash distribution sent to the investors? And what are the fees that the manager gets? I already told you about the exhibit for the property information, voting rights, what authority does the manager have? What authorities do, the members have, and I just stopped there for a second. Beginning syndicators usually give extensive voting rights to the investors. And I think that's because they're not as comfortable in their money raising skills, and they have no track record. So they're giving the investors a chance to vote on a sale, or refinance or any major leases. But experienced syndicators don't do that. And it's not unusual to see an offering where the manager makes all the decisions, except for modifying the operating agreement and replacing the manager. I always want the members to have the right to replace the manager. I have been the replacement manager six times in my career and it's always devastating for the members not to be able to get a replacement and move the manager out if we need to. So that's one thing you always should find in an operating agreement.
Steven: [00:29:00] It's such a good reminder to people what they need to be looking for. So as they're going through this document, when it comes to those voting rights, they shouldn't be scared off the fact that the manager is going to be making all those decisions, because that's really the reason that they hire the manager to be able to execute and do this in the first place. Is that right?
Gene: [00:29:23] Right. The manager knows the marketplace. If we're talking about a real estate offering, the manager knows the marketing place, knows this property, knows what's going on. And so we can do that. And if there are voting rights left to the members on a thing like a refinance or a sale, it's usually just a simple majority. It's not unanimous. That wouldn't have to be that. That'd be terrible because you never get anything done. So the majority is common. Liquidity too is the fourth question. What happens if I need my money back? Two articles in my operating agreement that talk about liquidity. One is voluntary liquidity; I want to sell my units to someone. Most operating agreements allow that. A free transferability of the interests after the first year, which is a securities law. And so you go out and find someone and you sell your interest to them. Sometimes there's a first right of refusal, reserved for the members of the company, or the company or the manager, this is because we might want to keep all the units inside the company, but you can always get rid of your units, at least the economic interest, all the cash flow, you can always sell that to someone. Now whether the manager lets the buyer of that unit vote is something dependent upon each document, let's say it's a document where only accredited investors can buy in, but you want to sell yours and you sell it to someone who's not accredited investor, that's fine. But the manager will make a decision that that person can't vote, okay, they get the money, but they just can't vote that happens. And the other one is involuntary liquidity. You're an investor and you get in a lawsuit, you get a divorce, you die, something like that, where your units are going to move from you to someone else. Generally, we have provisions that the company can step in and be the successful bidder on those units. If there's a bankruptcy, the company can go to the trustee, and the document would give the company the first right to buy those units from the trustee. And that's important. Dispute resolution. A big long, maybe four or five pages, in the operating agreement about dispute resolution, we get one member and it happens, who is a pain in the butt and wants to cause everyone problems. So our dispute resolution, Steven, our process is we're going to keep everything out of court, we're going to go to mediation, we're going to go to arbitration, we're not going to grant the this disgruntled member, the right to get attorney’s fees, we're not going to let them get damages other than just their money back, because we've got to protect the company. And so we give the manager the right to use all the assets of the company to fight this disgruntled investor. Now, there are a lot of disgruntled investors, we don't need the dispute resolution, we'll just go back to voting rights and we'll vote out the manager. So a lot of moving parts. But all this stuff is in the story and it's a disclosure document, there's a rule that says in regulation D, you have to disclose all the information. So we put it in writing in something called the PPM. Our PPM is the story. Exhibit one the investor gets his Certificate of Formation in the state showing that the LLC is properly formed. Exhibit two is the operating agreement, which goes through and talks about the rules of all this story. This is not a legally binding document, no one signs this other than the manager says this is my story. Investors don't sign the PPM, it's the operating agreement that goes into detail on how is the distribution going to be handled? How are the fees going to be handled? That's what's in the operating agreement. And then exhibit three is the subscription agreement and offering questionnaire. The subscription agreement basically is the offer that the investor makes and says yes, so I'll give you my $50,000. I'd like to invest in your deal and in support of my offer. Here is the questionnaire that tells you my experience. Am I sophisticated, am I accredited? Should I be in your deal? And the manager has the absolute right to say no, the risks in this deal don't make it suited for you. For example, I'm 72 years old. If I'm going to invest in my IRA, in your project, Steven, that's going to last 10 years, you should turn me down because I need to start taking mandatory withdrawals from my IRA. And that might be a problem if all my money tied up with you, how are you going to do that? So you need to look at suitability. And then the last exhibit, of course, is the property information. So that's why, as you said, Steven, it's a long document, the book that you get, or whatever you get online, or however the sponsor distributes information to the investors is lengthy, clearly 100 to 150 pages when you count all the exhibits. So that's a useful thing to do and I'll tell you Steven, one of the biggest mistakes that investors make is not reading the documents.
Steven: [00:35:36] Yeah. It's so important because sometimes people get overwhelmed Gene because we just went through a lot of information. And this is at a super high level. So it can sometimes be overwhelming, because the intention of this document is to disclose all the potential risk, all of the information that the investor needs to understand how the rules are going to be executed, and therefore how this project is going to be delivered for investors. So going into it before making an investment, it's absolutely critical that you read through the entire document, not because there's a lack of trust, or that you believe that the manager is going to slip something over on you. But just for the fact that this is the governing document that is setting the expectations for you, as the investor in advance of making that investment. So by signing the document by going in and agreeing to the operating agreement, you're agreeing to those expectations, the managers set out for you. If there's questions about it, that's the perfect time for you to be able to go in and say, "Hey, well, I'm actually unclear about this provision, or you mentioned that it would be important to have continuity plan, I'd like to actually see something that's maybe a little bit more detailed than what you have perfect, no problem, we can then execute some additions to the operating agreement, even if the plan has already been put in place. But by getting clear on what those expectations are in advance, you have the opportunity to raise those concerns or sign on with 100% confidence that you understand what's expected.
Gene: [00:37:12] That's right. And I've done one particular podcast in the last couple months where we did three one hour sessions on this one hour and the PPM, one hour on the operating agreement, and an hour on this subscription agreement and questions and looked at some clauses and read the words, how does this work? So there's a lot more than this, but I would suggest that before you invest, if you're an investor, find yourself a PPM, get on someone's radar and have them send you a PPM so you can read the document. I was going to say I'm not sure you should invest in the first PPM you read. I think you should read a couple and get educated and do that now. Attorneys don't send out I get asked a lot. Will you send me a sample PPM? No. The PPMs I draft are for my clients. They're the property of my clients and so I don't send those out. So the place that you find a PPM is to find a syndicator and get on their radar and ask them for their documents. That's fine.
Steven: [00:38:29] Yeah. I think that's great advice. I do encourage people if they're going to make an investment to read through the documents, read through them multiple times to potentially have their counsel take a look at the documents and make sure that they have full understanding. And so if you happen to be in a situation where you're ready to invest in your first deal, and you're trying to get familiar with the hundred 50 pages it's not exactly the best time but you still can. So what would be your advice Gene to folks who feel like they've got a good understanding, they're ready to move forward but they've got some questions. Who should they turn to ask those questions when it comes to these documents?
Gene: [00:39:10] Their own attorney, if you're an investor, their own attorney. Now sometimes one of my clients will call me and say, "Hey, Steven is a potential investor and he's got a couple of questions on how 10/31 works in this deal. Can we get on the phone together and talk to him? That might very well be okay. The issue is the attorney who drafts the documents has the sponsor as the client, I have to stay out of having an investor think I'm advising them and they become my client. I have to totally stay away from that. But with the client on the same day we can explain things. So that's extremely possible.
Steven: [00:39:58] Yeah. Well that's definitely really good advice. You can ask questions to the attorney who drafted them but the person who is representing your interests has to be your attorney. So as we're wrapping up things, I am so grateful, definitely want to have you on again as we dive deeper into some of these more advanced topics for people Gene, but how can people get in touch with you if they're interested in in working with you or learning more about some of your experience and what you're up to on the on the syndication attorney front?
Gene: [00:40:32] Trowbridgelawgroup.com is our website, and there we have a number of things going on. And you can reach me @Genetrowbridgelawgroup, we have something called Trowbridge talks where I actually interview people, my clients. People that are in the business, and someday I'll reach out to you I turn around and interview everyone who's interviewed me. And so we do that someday I'll reach out to you, Steven on that and that's called Trowbridge talks, or TLG talks, and that's always noon, California time on Thursday.
Steven: [00:41:14] Perfect. Well, that sounds good. We'll include links to all of that in the show notes for everybody so that they can get access to that and thank you so much Gene, and I look forward to the next time we get to hang out as a reminder, all you investors out there, go take some action with this information you learned, go dive a little bit deeper, go read through a PPM and get familiar with this stuff so that you're ready to pull the trigger when you find a deal you like.
Gene: [00:41:37] Thank you, Steven.
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