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Direct Participation Program (DPP)

DPP programs are direct investments in limited partnerships and limited liability corporations. Real estate, oil & gas and equipment leasing are examples of direct participation assets. Investors in DPP programs allow for direct participation in cash flow as well as tax benefits.

Direct participation programs are typically made up of limited partnerships, which benefit the investor based on their partial tax shelter. However, these programs also have significant risks associated with them. Direct Participation Programs rely upon the general partner to manage the investment. This type of program is often a blind pool because the investment may not be specifically identified, and as a result you cannot evaluate the risks of, or potential returns from, the investment. DPP’s are highly illiquid and there is no guarantee of a secondary market for the investment. All or a substantial portion of the distributions from this type of investment may be a return of capital and not a return on capital, which will not necessarily be indicative of performance.

This does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can be made only by a Private Placement Memorandum. These investments involve a high degree of risk and are not suitable for all investors. Please refer to the Risk Factors section of any specific Private Placement Memorandum.

Oil & Gas

Oil & gas programs are a popular investment in today’s market. American Wealth Management, works with broker/dealer Independent Financial Group, whose due diligence department reviews investment opportunities with some of the most resilient oil & gas companies on the market today.

A variety of investment opportunities are offered to both general and limited partners, from exploratory to developmental programs including both Reg D and public offerings. The goal is not only to direct you toward suitable investments, but to help maintain longevity as well.

Investments in oil & gas programs are highly speculative and involve risks and are not suitable for all investors. You must be prepared to bear the economic risk of an investment for an indefinite period of time and be able to withstand a total loss of your investment. Other things to consider with Oil & Gas programs include: There will be no public market for the units, and as a result an investor partner may not be able to sell their units. Through their involvement in partnership and other non-partnership activities, the Managing General Partner and its affiliates have interests that conflict with those of the investor partners. Fluctuating market conditions, intense competition for leases, drilling services and markets, and government regulations may make drilling and producing wells more expensive and less profitable. Environmental hazards may result in substantial liabilities and this could result in reduced profitability and possible liability to additional general partners.

This material does not constitute an offer to buy or sell any security. Such offers can only be made through a private placement memorandum or prospectus which contains a complete discussion of risks involved in the investments.

REIT’s (Real Estate Investment Trust)

A real estate investment trust, or REIT, is a corporation, trust or association that owns (and might also manage) income-producing real estate, and may be traded similar to stocks and bonds on the stock exchange, or formed as a non-traded REIT. American Wealth Management offers several portfolios of real estate investment trusts. These REIT portfolios consist of (but are not limited to) large and small commercial properties, office buildings and residential estates.

REIT’s are an investment vehicle used for investing in real estate. REIT’s can be publicly traded with ticker symbols on an exchange, publicly registered but non-traded (illiquid and not on an exchange), or non-registered (Reg D).

REIT’s allow investors to diversify their ownership of real estate by buying the public shares or investing in the operating partnership units which the REIT will then use to purchase real property. REIT’s may be diversified (owning various real estate assets like office buildings, retail centers, industrial buildings, apartments or mortgage debt), or specific (office only, etc.).

REIT’s must distribute 90% of their annual income to the investors to remain qualified as a REIT which allows for no taxation to the REIT at the corporate level. This avoids the double taxation issue. In addition REIT’s can provide a source of income to the investors on an annual basis as long as the REIT operates profitably. In some cases the distributions from the REIT may be reinvested in the REIT to purchase additional shares or operating partnership units.

REIT’s are a way to help reduce risks of investing in real estate as well as diversifying an investor’s portfolio while possibly providing a source of income with the possibility of appreciation. Diversification can not eliminate the risk of investment losses. Independent Financial Group has selling agreements with many of the prominent publicly registered non-traded REIT companies in the market today.

REIT’s involve a high degree of risk and some of the more significant risks include: The value of shares of the trust will fluctuate with the portfolio of the underlying real estate related investments. Redemption will be at the price which may be more or less than the original price paid for units of the trust. There can be no assurance that a secondary market for the REIT will be maintained by the issuer. Therefore, there is risk that an investment in the REIT may be illiquid. The REIT is subject to risks such as potential conflicts of interests, risks associated with the lack of liquidity, lack of experience in operating a REIT, risks associated with the leveraging of the investment, the special risks of investing in real estate such as market risk, interest rate risk, lease terminations, and potential adverse economic and regulatory changes.

This does not constitute an offer to sell or a solicitation to buy any securities. An offer can only be made by a prospectus that contains more complete information on risks, management fees and other expenses. Read the applicable prospectus before you invest or send money. Consult the applicable prospectus or offering memorandum for suitability standards and minimum investments in your state.