Creating a Syndication (Micro-Fund Wizard)

The Fund Flow Micro-Fund Wizard guides you through a 9-step process to produce SEC-compliant offering documents for a real estate syndication. Each completed step feeds a document generation engine that produces a Private Placement Memorandum (PPM), Operating Agreement, and Subscription Agreement.

Reg D 506(b) vs. 506(c)

Choose your exemption type on the first screen. This selection affects who you can solicit and how you verify investor accreditation.

The 9-Step Wizard

Step 1 — Company Information

Enter the legal entity details for the fund vehicle:

• Entity Name — The LLC or LP that will hold the offering (e.g., "123 Main St Holdings LLC")
• State of Formation — Governs the Operating Agreement template
• Principal Office Address — Physical mailing address for the entity
• EIN — Federal Employer Identification Number (leave blank if not yet obtained)

Step 2 — Manager & Principals

Provide background for all General Partners and managers. This information populates the Management Experience section of the PPM.

For each principal:

• Full legal name and title
• Years of real estate experience
• Notable past transactions (deal name, asset type, outcome)
• Disclosure of any past litigation, bankruptcy, or SEC enforcement (required by law)

Step 3 — Property Details

Describe the target asset or assets:

• Property Address — Auto-completes with geocoding
• Asset Type — Multi-family, Industrial, Retail, Mixed-Use, etc.
• Current Occupancy Rate — Percentage of occupied units or square footage
• Purchase Price and Estimated ARV (if value-add)
• Business Plan — Stabilization, repositioning, ground-up development, etc.

Step 4 — Offering Terms

Define the economic structure of the fund:

• Total Raise Amount — Target equity to be raised from LPs
• Minimum Investment — Per-investor floor (e.g., $25,000)
• Preferred Return — Annual percentage paid before profit splits (e.g., 8%)
• Offering Period — Number of days the offering remains open
• Closing Type — Rolling close (admit LPs as funds arrive) or single hard close

Step 5 — Waterfall Structure

Configure how profits are distributed after the preferred return is paid:

1. Return of Capital — LPs receive their original investment back first
2. Preferred Return Catch-up — Accrued preferred return is paid in full
3. GP Catch-up (optional) — GP receives a percentage until split reaches target ratio
4. Residual Split — Remaining profits split between GP and LP (e.g., 30% / 70%)

The wizard renders a visual waterfall diagram as you configure each tier. Review it carefully — this structure is locked into the Operating Agreement.

Step 6 — Fees

Disclose all compensation to the GP. Each fee type includes a plain-language description that appears in the PPM:

Step 7 — Sources & Uses

Provide a complete capital stack showing where money comes from and how it will be spent:

Sources:

• LP Equity (linked to offering terms)
• Senior Debt (lender name, loan amount, LTV, interest rate, term)
• Mezzanine / Bridge Debt (if applicable)

Uses:

• Purchase Price
• Renovation / Construction Budget
• Closing Costs and Fees
• Working Capital Reserve
• Offering Costs (legal, accounting, fund admin)

The sources total must equal the uses total before you can advance to the next step.

Step 8 — Risk Factors

Select applicable risk factors from the Fund Flow library. The system pre-selects standard real estate risks (market risk, liquidity risk, leverage risk, construction risk) and adds asset-specific risks based on your Step 3 inputs.

You can:

• Add risks from the library by keyword search
• Edit the language of any selected risk
• Add custom risks not in the library

Step 9 — Review & Generate

A read-only summary displays all inputs from each step. Use the Edit button next to any section to jump back and correct values.

When satisfied, click Generate Documents. The system produces:

• Private Placement Memorandum (PPM) — full disclosure document (~40–60 pages)
• Operating Agreement — governance and distribution mechanics
• Subscription Agreement — investor commitment and representation letter

Documents are delivered as editable Word files (.docx) plus a PDF preview. You are responsible for legal review before distribution to investors.

After Generation

Once documents are generated:

1. Download and send to your securities attorney for review.
2. File Form D with the SEC within 15 days of the first sale. This is your responsibility — Fund Flow does not file on your behalf.
3. Check state Blue Sky filing requirements — many states require additional notice filings.
4. Upload the final attorney-reviewed PPM to the associated Deal in Fund Flow to share with investors through the investor portal.

Frequently Asked Questions

Can I generate documents for multiple properties in one offering? Yes — Step 3 supports multiple property entries. Describe each asset and the PPM will include a consolidated portfolio section.

What if I need to amend the PPM after generation? Download the .docx file and edit it directly, or re-run the wizard from the step that changed. Amendments require a new document generation charge if material changes are made.

Can I use the 506(c) exemption and still have a minimum investment below $50,000? Yes — the minimum investment amount is not regulated by Reg D. However, 506(c) requires you to independently verify that every investor is accredited.

Does Fund Flow store investor subscription agreements? Yes — completed subscription agreements signed through the investor portal are stored in the document vault and linked to the investor's commitment record.