YOUR PASSPORT TO WEALTH FREEDOM

(3 Required Documents Every Investor Must Know)

What Are You Signing?

One of the most common questions I get from new investors is, "What am I actually signing?"

It’s a lot of reading, but when you’re entering into a business as a Limited Partner, view the paperwork as your safeguard. Each required document serves a specific purpose to protect your investment, define the roles of all parties involved, and ensure that you fully understand what you’re committing to.

These documents are regulated by the federal and state Securities Exchange Commission in order to protect Limited Partners from ignorant investments with bad actors.

There are 3 documents you'll see in nearly every private placement. Let’s break down the typical signatures you'll need so you know what to expect between creating a login for a private investing portal and actually wiring your money into a deal.

1. Private Placement Memorandum (PPM) and Deal Disclosures: The Full Legal Documents

The Private Placement Memorandum (PPM) is the most comprehensive document you'll receive as a Limited Partner. Think of it as the real deal—it provides you with all the essential information you need to make an informed investment decision. The PPM spells out the exact nature of the investment, including:

Risks

It covers all potential risks tied to the investment, so you know exactly what you’re stepping into. They're not designed to scare investors, but they often do, so be prepared to read that the sky is going to fall!

Legal Disclosures

Every legal detail is disclosed upfront, ensuring there are no hidden surprises. Check for dilutions, capital calls, manager removal, and other major red flags to ensure the fine print doesn't sour a good deal.

Not disclosing how funds will be used to pay out investments is a major source of possible fraud or potential litigation if a deal doesn't perform as hoped.

Fees and Capital Calls

You’ll find details on any fees involved, from management to performance fees, as well as any possible capital call requirements.

Conflicts of Interest

If the fund managers have any potential conflicts of interest, those must be fully disclosed in this document.

In short, the PPM ensures that everything is out in the open. Most funds require you to sign the PPM once, but for customizable funds, each deal will come with a specific disclosure so you’re fully aware of how every individual investment fits into the larger strategy.

Deal Disclosures

If you are investing in a customizable fund like ours where you can choose your individual investments one by one, you'll need to sign a new disclosure or "mini PPM" for every deal that you do. You can specify if you want your gains withdrawn or rolled over into the next deal, and we will take care of that on the back end. When a deal becomes available, we'll send you the information and disclosure for that specific property where you can accept or reject it.

You'll sign a fund PPM only one time (unless there are changes to the fund to "sticker" and send around for review and signing again,) and on a customizable fund you'll sign a disclosure on every new deal.

2. Operating Agreement (OA): Your Blueprint for How the Fund Operates

While the PPM gives you the broad strokes, the Operating Agreement (OA) dives into the mechanics of how the fund operates. This document serves as the blueprint that dictates how decisions are made, how profits are split, and what responsibilities each party holds. Key details in the OA include:

Roles and Responsibilities

The OA defines exactly who does what within the fund. This includes both the General Partners (those managing the fund) and Limited Partners (like you).

Equity Splits

It outlines how profits will be shared among the partners.

Decision-Making Authority

This includes who has the authority to make key decisions, and how those decisions will be executed.

Contingency Planning

The OA also prepares for worst-case scenarios. If something goes wrong, the document defines how the fund will address the issue, whether that’s through liquidation or reorganization.

Essentially, the OA is your guide to how the partnership will function in both smooth times and rough ones. It ensures you’re not just throwing money into the void—you’re joining a clearly defined operation.

3. Subscription Agreement: Your Formal Commitment

Once you’ve reviewed the PPM and the OA, the Subscription Agreement is where you officially commit to the fund. This document is your formal entry into the investment and includes:

Accreditation Status

The Subscription Agreement confirms that you meet the criteria as an accredited investor, a regulatory requirement to ensure you're financially qualified to make these kinds of investments.

Investment Amount

It specifies how much you’re committing to invest and, depending on your situation, whether you’re investing through a trust, LLC, or personal entity.

Disclosures

By signing this agreement, you’re confirming that you’ve read and understood all the relevant documents (the PPM and OA) before making your final commitment.

The Subscription Agreement is your final step to becoming a Limited Partner. Once this is signed, you’re officially in. And don’t worry, everything is done electronically for ease and security—because let’s face it, none of us want to deal with endless paperwork!

Final Thoughts: Protect Yourself and Your Investment

I get it—these documents can feel intimidating, or at the very least annoying. But here's the benefit: they are designed to protect you. By taking the time to understand what you're signing, you not only safeguard your investment but also strengthen your partnership with the fund managers. You’re not just passively sitting back—you’re actively participating in your own financial future.

If you ever have questions about these documents or want to a deeper look into what they mean for you, don’t hesitate to reach out. We’re always here to help clarify the process and make sure you feel confident every step of the way.

Here's a quick summary to guide you on the way. For more quick reference sheets like this, grab our FREE GUIDE to investing with confidence.

RESOURCES AT RISE!

OPEN DEALS

Rise Capital Investments Fund specializes in real estate hard money loans with occasional equity partnerships for passive investors. Accredited investors can review all our open deals on our private investor portal, make soft commits, fund, monitor, and receive distributions all in one place.

EDUCATION

We offer free events every week, and free info to get you onto the path of changing your life through real estate investing.

RISE AND SHINE BLOG

Speaking of learning to trust others, there are some ways to get started building a relationship anonymously without getting on an email list or other (annoying) follow up campaign.

Check out the free articles on our blog as a way to learn about investing and learn about us before reaching out.

MONDAY FREE CLUB

Every Monday night, we host a FREE joint venture investing club where investors analyze deals, learn how to invest in commercial real estate, and invest either passively or as a group to manage actual deals.

We have open networking at our NEW TIME from 5-5:30pm MT, followed by group deal evaluation or an occasional speaker 5:30-6:30pm MT.

Join us to get started or pivot in commercial real estate with a lower barrier of entry! We've helped dozens of investors get into their first large commercial deals.

TUESDAY PODCAST

Every Tuesday, we release a podcast episode chronicling the Passive Income Adventures of our host Emma Powell and guests as they share their stories of changing their lives through entrepreneurship and investing. We just wrapped up Season 01 at the end of 2023, so feel free to binge listen to all 52 episodes!

Listen, rate, review, and subscribe and all that anywhere you listen to podcasts for a weekly dose of inspiration and education on how you can join us in financialfreedom or earlyretirement!

THURSDAY FREE CLASSES

Every other Thursday we host an online learning event or workshop.

For lunch and learn style, join "Relax With Rise" on a LinkedIn and YouTube LIVE event sharing strategies and stories on how we've retired early on passive income.

The third Thursday night of each month we hold an online class "After Hours with Rise" on techniques to build wealth and retire early: you can register for event reminders on our site.

FIND US ON SOCIAL

Christopher Borden CEO

Emma Powell is @passiveincomeadventures on YouTube and Chief Investment Officer

ZASHA SMITH, P.E. is @investwithzasha on Instagram and Director of Marketing

Lais Keese is @momabundance on Instagram and Director of Investor Relations

Raquel Rigby Director of Operations and Compliance

Troy Powell Director of Technology

Harmonie Borden Operations

BOOK A CALL when you're ready to spend more time with your loved ones by investing a little time up front for financial freedom to passively earn 10-12% on private real estate loans.