PPM (Private Placement Memorandum)
A private placement memorandum is the detailed disclosure document a sponsor gives investors in a private offering like a DST, outlining terms, risks, and fees.
Definition
A private placement memorandum (PPM) is the primary disclosure document for a private, unregistered securities offering such as a DST or Opportunity Zone fund. It serves the role that a prospectus does for public securities, giving prospective investors the information needed to evaluate the deal.
A PPM typically runs dozens or hundreds of pages and covers the business plan, property details, the sponsor's background and track record, the capital structure and debt, all fees and compensation, tax considerations, and, critically, an extensive risk-factors section. Because these offerings rely on the Regulation D exemption, the PPM is how the sponsor meets its disclosure and anti-fraud obligations.
Reading the PPM carefully is the heart of due diligence. Fees, load, projected versus guaranteed returns, and the sponsor's discretion are all disclosed there. Investors should review it, often with an advisor or attorney, before committing capital to any private real estate offering.
Key points
- Disclosure document for a private (Reg D) securities offering
- Covers business plan, sponsor, fees, tax, and risk factors
- Serves the role a prospectus plays for public securities
- The central document for investor due diligence
Related terms
Jerry Baker founded Baker 1031 Investments to help exchange investors move from active property ownership into passive, institutional-quality real estate through DST, 721 exchange, mineral royalty, and Opportunity Zone strategies. He holds the FINRA Series 22 and Series 63 registrations and the Securities Industry Essentials (SIE) qualification. Read full bio →
Reviewed by the Aurora Securities, Inc. compliance team — Aurora Securities, Inc., member FINRA/SIPC. Last reviewed July 2026. Securities are offered through Aurora Securities, Inc.; Baker 1031 Investments, LLC is independent of Aurora Securities, Inc.
This glossary entry is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Definitions are general and may not reflect your specific circumstances — consult your own CPA and attorney. Past performance does not guarantee future results.