What is an Offering Memorandum?

Investing with Cooper Pacific is extremely easy. Our entry level investment into the market is just $5,000. However it really helps to have an educated understanding of what it is that we do and how to be selective towards which type of investment products you might wish to commit to.

When you browse our current real estate and mortgage investment opportunities, there are 2 critical pieces of information that are included with each.

  • The Offering Memorandum
  • The Subscription Agreement

These 2 documents form the foundation of what you will need to know in order to make an educated decision on which project to consider investing in. Let’s get down to it.

Investing in Real Estate Developments

What is an Offering Memorandum?

The offering memorandum is the meat of the investment opportunity. This hearty, legal document details all the required information as set out by the securities regulators, and contains enough information to make an informed decision on the opportunity. Information such as financial statements, amount of shares released, cost of shares, minimum investment, etc… There’s an incredible amount of information here.

For example, the offering memorandum for our First Mortgage investment opportunity is 46 pages deep. It details that the development company is looking to raise $20million, by way of Class B shares offered at $1 per share. The minimum subscription (investment) amount is 5.000 shares; so a $5,000 is the minimum financial commitment.

An offering memorandum is developed and released by the investment corporation or banker and commonly details the following major subjects.

  • Management Biographies
    • These are detailed biographies of the management parties which include both individuals from the investment corporation as well as the critical stakeholders in the development companies.
  • Risks, objectives and terms
    • Details of any inherent risks with the investment, the financial objectives of the project from beginning to end and the term of the investment cycle.
  • Operational explanation of the business
    • This is to detail the past, present and future business operational plan of the Mortgage Investment Corporation. It’s possible to learn a great deal about the financial stability of the company in this section.
  • Financial Statements
    • As it sounds, this is the transparent financials of the company as required by the securities regulators. This section will hopefully provide some reassurance as to the stability of the company when developing an investment decision.

This type of document is reserved for private investment situations which are not related to publicly traded investment scenarios. Similar documentation for publicly traded assets is called a prospectus.

What is a Subscription Agreement?

The subscription agreement is the contract between the seller and the investor. The agreement details precisely the amount of shares that the corporation agrees to sell to the investor, and at what price. The document is accompanied by a host of supporting legal-ease, but it’s essentially a contract covering the amount of shares being purchased. But, importantly, this agreement is a binding document which confirms that the purchaser fully understands the terms and conditions of the agreement.

We hope that helps to describe these 2 documents in a way that’s easier to understand. If you’d like a moment to chat about our projects, Contact Jordan Fairlie at your convenience.


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