Q3 2022: Investing Insights with Principal, Jennifer Warder, "Preparing to Invest"
Investing Insights: "Preparing to Invest"
Written by Jennifer Warder
Q3 2022 Newsletter
JENNIFER WARDER | Principal, SPI Advisory, LLC
One frequently asked question we receive from investors who have experienced how quickly our syndications reach completion is:
"How Can I Prepare to Invest with You In Advance of a Syndication?"
Well, here is the cheat sheet for you . . . these are steps you can take well in advance of learning about an investment opportunity & will help you when it comes time to subscribe:
- Solidify how you will take title in the investment (i.e., legal name under which you will invest) by consulting with your CPA, attorney, &/or Financial Advisor. They will help you ensure that the title you choose takes your specific tax, estate planning, & financial planning needs into account. Needs change over time, so it is wise to reassess as your situation changes.
- Collect the fully executed legal documents you will need to provide when you subscribe that identify both signing authority and equity ownership. This particularly applies to legal entities (like LLCs, trusts, etc.) and retirement plans. (If documents we have on file for you have been amended or updated, collect those to provide instead).
- Know how you file taxes for the way you are investing. A different way to ask this question is, "What tax return of yours will include our K-1 data?" (Your tax advisor is the person who can help you answer this question).
- Collect ACH instructions for the US bank account where we will send your distributions. ACHs are different from wires, so it is important you talk with your bank to ensure you have the correct instructions.
- For our existing investors who plan to invest with the same title, review the Investor Portal & update data &/or provide us with legal documents if amendments have been made.
Once we notify you about an upcoming investment opportunity, below are the next steps you can take to get ahead:
- If we identify that the syndication will be a 506(c) offering, which requires that all investors be accredited, you can work in advance to obtain a Third-Party Verification Letter (instructions & template below) from a qualified individual as defined on the template we provide. Using the template we provide will shortcut the process for you. (See our "Getting Started Guide" for additional details & for information on when you can skip this step).
- Prior to submitting paperwork for the subscription, ensure your funds for the investment are cleared and in the account from which you will wire to us.
Subscription acceptance will require fully complete & accurate paperwork & a wire for the full subscription amount.
Fundraises are completed on a first-come, first-served basis.
Since what you just read is an executive summary, below are resources you can refer to that are quick to watch / read that provide more detail about the information above. I encourage you to review each of them to guide you in your preparation.
- Preparing to Invest (<5 min) - video
- Getting Started Guide (3-pages) - explains the above steps AND provides preparation requirements based on how you will take title (e.g. Self-Directed IRA, Entity, Trust, etc).
- Third-Party Verification Letter Instructions by Title Type (1-page) - provides instructions about the Third-Party Verification Letter described above for 506(c) offerings
- Third-Party Verification Letter Template - we encourage you to use this template
Through the years, this set of steps has helped move investors through our syndication process faster and more effectively, and I know they will help you as well.
Happy Investing!
