Tag Archives: crowdfunding attorney

The Cashflow Hustle Podcast: Crowdfunding Techniques to Level Up Your Business

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Mark Roderick appeared on the Cashflow Hustle Podcast with Justin Grimes, where he discussed Crowdfunding Techniques to Level Up Your Business.

In this Episode, You’ll Learn About:

1. The Crowdfunding and its flavors
2. The deductions in Crowdfunding
3. The role of SEC
4. Blockchain technology in Crowdfunding
5. The Investor portals
6. Tokenized security in Crowdfunding

Questions? Let me know.

Syndications, Cryptocurrencies and Crowdfunding, Oh My!

Real Estate Nerds Podcast: Syndications, Cryptocurrencies and Crowdfunding, Oh My!

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Mark Roderick fills us in on how the rich can take care of themselves and the non-rich need the government which is why he thinks crowdfunding is so important to the regular Joe. Since the JOBS Act of 2012, Mark has spent much of his time in the crowdfunding space.

If you have ever thought to yourself the internet is a ruthless landscape slowly squeezing the middleman and driving human being up the value chain? Then you’ll want to tune into this week’s episode where Mark will explain everything from syndications to cryptocurrencies to crowdfunding, oh my!

Questions? Let me know.

Consensus Network Podcast: Crypto Thaw And Crypto Law

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On this episode of the Consensus Network Podcast, host Buck Joffrey discusses how regulations and laws are affecting the crypto landscape for better and for worse with FG’s Mark Roderick. Here are some highlights:

  • The “Wild Wild West” of crypto ICOs
  • What happens to tokens that violated the SEC rules?
  • What needs to happen for exchanges to become more compliant in the eyes of american securities law?
  • The possibility of a crypto ETF
  • Utility tokens vs. security tokens

Questions? Let me know.

More IRS Regulations On Qualified Opportunity Zones

Skyscraper Buildings Made From Dollar Banknotes

The IRS just issued more proposed regulations under §1400Z-2 of the Internal Revenue Code, dealing with investments in qualified opportunity zones and qualified opportunity funds. Some highlights:

  • In general, a QOF must spend at least as much to rehabilitate a building as it paid for the building itself. But this rule doesn’t apply to a building that’s been vacant for five years. This presents an enormous incentive to acquire and rehabilitate vacant properties (that are located in QOZs).
  • The tax benefits associated with QOFs are available only to an “active trade or business.” The new regulations provide that (1) the ownership and operation (including leasing) of real estate can qualify as an “active trade or business,” for these purposes, but (2) a triple-net lease of real estate is not an “active trade or business.”
  • To qualify for tax benefits, a corporation or partnership must derive at least 50% of its gross income from the active conduct of a business within a QOZ. The new regulations provide three safe harbors and a facts-and-circumstances test to make this 50% calculation.
  • In general, at least 90% of the assets of a QOF must be in the form of “qualified opportunity zone property.” The new regulations allow the QOF to ignore investments made by investors in the QOF during the preceding six months in making this calculation, as long as the new investments are held in cash, cash equivalents, or certain short-term debt instruments This rule will make it far easier for QOFs to satisfy the 90% test while continuing to raise capital.
  • Similarly, if a QOZ sells assets and reinvests the proceeds in other assets, then the proceeds of the sale will be treated as “qualified opportunity zone property” for purposes of the 90% test, as long as they are held in cash, cash equivalents, or certain short-term debt instruments and reinvested within 12 months. Of course, any gain recognized by the QOZ from the sale will be taxed to investors.
  • The new regulations provide that an investment in a QOF may be made with cash or other property, but not by performing services for the QOF.
  • The new regulations provide alternative approaches to valuing the assets of a QOF, both for making the 90% calculation and for determining whether substantially all of the QOFs assets are in a QOZ.
  • A “qualified opportunity zone business” must own “qualified opportunity zone property,” and “qualified opportunity zone property” does not include property purchased from a related party. But under the new regulations, it can include property leased from a related party, under certain circumstances.
  • By investing in a QOF, a taxpayer can defer recognizing capital gains for tax purposes until 12/31/2026. But if an “inclusion event” occurs before 12/31/2026, the taxpayer must recognize the capital gain at that time. Selling the interest in the QOF is an obvious example of an “inclusion event.” The new regulations provide many more, less obvious examples, like giving the interest in the QOF to a charity, or receiving a distribution from the QOF that exceeds the taxpayer’s basis.
  • After holding a QOF for 10 years, a taxpayer may exclude all capital gains from the appreciation of the interest in the QOF. The new regulations provide that the taxpayer doesn’t have to sell her interest in the QOF to benefit from the exclusion; the exclusion also applies if the QOF sells its assets and distributes the gains.
  • A ”qualified opportunity zone business” means a trade or business in which substantially all of the tangible property is “qualified opportunity zone business property.” The new regulations clarify that in this instance, “substantially all” means 70%.
  • “Qualified opportunity zone business property” means tangible property used in the trade or business of the QOF if, during substantially all of the QOF’s holding period for such property, substantially all of the use of the property was in a QOZ. Believe it or not, the new regulations provide that the first instance of “substantially all” in that sentence means 90% and the second instance means 70%.

The new regulations illustrate why tax lawyers so look forward to new tax legislation, and are so popular at cocktail parties.

Questions? Let me know.

The Real Estate Syndication Show: How To Do Crowdfunding Legally

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Raising money without begging investors is no easy task for startups. At times, help from a third-party individual is needed to make it happen. But how do you know if you are legally paying brokers to raise capital and not breaking any law or guides set by the Securities and Exchange Commission?

In this interview, Mark Roderick explains what a broker is, and the legal process that raising money entails. He cites examples of the repercussions of hiring an unlicensed broker-dealer, gives advice on the lessons he has learned in the industry, and touches on his blog that tackles crowdfunding.

 

A Millennial’s Guide to Real Estate Investing Podcast

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On this episode of A Millennial’s Guide to Real Estate Investing, host Antoine Martel sits down with Mark Roderick, a leading crowdfunding, investing and fintech lawyer. They talk about blockchain, crowdfunding, the JOBS act, and how all of these things are going to be changing the real estate industry. Also discussed are the different types of crowdfunding flavors and how each of them work.

Questions? Let me know.

Real Estate Crowdfunding: How Far We’ve Come

 

The JOBS Act was signed by President Obama on May 5, 2012. Last month, a client of mine, Tapestry Senior Housing, raised about $13.6 million of common equity for a project in Moon Township outside Pittsburgh. Tapestry is an affiliate of Tapestry Companies, LLC, a national firm that operates as an owner, manager and developer of senior and multifamily properties. The Moon Township project involved the adaptive re-use of an existing Embassy Suites hotel.

This was the largest raise in the history of the CrowdStreet platform and, in my opinion, an important milestone for the Crowdfunding industry.

Not long ago, real estate Crowdfunding was limited to single-family fix-and-flips. At the annual meeting of NAIOP in Denver, in October 2014, I moderated a panel on Crowdfunding with Adam Hooper of RealCrowd and Darren Powderly of CrowdStreet, as it so happens. The audience for our panel was the smallest of the conference — but at the same time probably the youngest and most enthusiastic.

The size of the deals grew and high-quality sponsors like Tapestry began to notice. Now, when word gets out that someone has raised $13.6 million of equity, I believe we’re going to see a spike in interest from a broad spectrum of sponsors in every industry sector.

You can’t raise $13.6 million for just any sponsor and any deal, of course. Tom LaSalle, Jack Brandt, and their team at Tapestry have a remarkable track record in the senior housing space, and this was their third deal on CrowdStreet. CrowdStreet itself has a terrific and well-deserved reputation as a premier site. Put a great deal, a great sponsor, and a great site together and you get a terrific result.

But let’s not forget the most important factor of all (besides the lawyer, I mean). In the Moon Township deal, Tapestry and CrowdStreet gave about 280 accredited investors from all over the United States the opportunity to participate in the kind of investment once reserved for the wealthy. That is now, and will continue to be, the most important ingredient for success. When we talk about Crowdfunding as the democratization of capital, that’s what we mean.

Tapestry raised $13.6 million from 280 investors. There are close to 10 million accredited investors in the United States alone. To my mind, that means that the opportunity for growth, even within Rule 506(c), is practically unlimited.

So hats off to Tapestry and CrowdStreet, and on to the next deal.

Questions? Let me know.

Crowdfunding & Fintech for Real Estate Podcast

CF and Fintech for Real Estate Podcast

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Technology has made it easier to raise capital for real estate deals. Since Crowdfunding has grown exponentially, John Casmon, host of the popular Target Market Insights podcast, invited me on his show to learn more about crowdfunding and fintech (financial technology).  On this episode, I talk about different ways to use the internet to raise money and the impact new technologies will have on the way we buy real estate.

Key Market Insights

  • Crowdfunding is raising money on the internet

  • Two versions – donation based (think Kickstarter) and equity based

  • Crowdfunding is online syndication with 3 flavors: title 2, title 3 and title 4

  • All crowdfunding falls under the JobsAct

  • Title 2 is very similar to 506c for accredited investors

  • Title 3 is very different, can only raise $1MM annually

  • Title 4 can raise $50 million

  • FinTech – any technology disrupting the financial services industry

  • Many believe banks should be a disintermediary

  • Roboadvisor apps are apart of FinTech

  • Online syndication is not more risky than traditional syndication

  • Anytime you take money, you can be sued

  • When done properly, you should not be exposed to any actual liability – even if they lose money

  • Blockchain technology could disrupt the real estate industry

  • Blockchain is a database or ledger that cannot be changed and has no central authority – everyone must consent

  • Title companies and other “middle men” could be pushed away through blockchain

Questions? Let me know.

Crowdfunding Demystified Podcast on Equity Crowdfunding

CF Demystified

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Interested in equity crowdfunding? What about understanding how to raise money from the crowd? In this podcast, I do a complete brain dump on all of the regulations impacting raising funds online.

You’ll discover how crowdfunding regulations differ, how to do an online securities offering, and what makes a successful campaign.

The goal of this episode is to bring you accurate and quality information so that you can go out there and raise money from the crowd, be it for real estate or a new business venture.

Questions? Let me know.

Tokenization: The Legal Take on Jobs Act Equity Crowdfunding and Security Token Offerings

Podcast: Regulation A+ Crowdfunding

Tokenization podcast MSR

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If you’re a entrepreneur, you’re probably looking for some way to raise capital. You probably have heard of crowdfunding, but you may not have heard of the Jobs Act of 2012 and how it relates to crowdfunding – which is significant because its potential is enormous. Besides Regulation A+, Reg. CF, and Title II crowdfunding options to name a few, now investors and issuers can take advantage of the “tokenization” of assets via Security Token Offerings based on blockchain technology. However, there are complicated rules associated with all aspects of crowdfunding, which is why it’s so important to have legal representation throughout all phases of the process.

In this podcast episode, we interviewed crowdfunding attorney Mark Roderick from Flaster Greenberg PC who gave us many insights on crowdfunding in general, plus his take on tokenization and what security tokens can actually do for issuers and investors alike. Forget what everyone says about raising money. As stated on the podcast, crowdfunding is a marketing business, but it’s smart to have legal counsel at all times too – which is why anyone thinking of getting involved with crowdfunding on any level would be wise to contact Mr. Roderick and read his crowdfunding blog where you can find hundreds of posts with excellent information dedicated to legal crowdfunding success. See that? Sometimes lawyers can be your friend!

And speaking of crowdfunding, according to Mark, about 90% of the Reg.A+ crowdfunding deals he’s seen is regarding real estate. You know what most of the Reg.CF deals are? (here’s a hint).

Questions? Let me know.

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