Why Real Estate?
Regulation D Resources
Douglas Ruark is Senior Principal for the Denver, Colorado office of Regulation D Resources, Founder and President of Regulation D Resources Enterprises, Inc. Mr. Ruark began his career in corporate finance in 1992 with Heritage Financial, Inc. a company he co-founded that specialized in sourcing commercial real estate and corporate debt financing for commercial borrowers. In 1994 Heritage Financial was merged with InvestCap Partners, a Washington DC based corporate investment banking firm. Mr. Ruark assumed a partnership position in InvestCap Partners and was tasked with managing several areas of corporate finance for the company including real estate syndications, transactional risk assessment, Federal and State securities compliance, and investor relations. In 1999 Mr. Ruark served as a primary founder of Regulation D Resources. The Company was formed for the purpose of providing private placement offering advisory services to corporate clients. Regulation D Resources currently provides SEC Regulation D exempt and Regulation A+ exempt securities offering preparation and execution services. The Company also provides custom software solutions for management of investment compliance processes. Regulation D Resources has provided advisory services for over 5,000 securities offerings since 1999. In 2015 Mr. Ruark was instrumental in leading the team responsible for development of Regulation D Resources Investor Portal Compliance Management application. The web application provides for public promotion of Regulation D 506(c) and Regulation A+ exempt securities offerings and handles all compliance, subscription, and investor verification processes. The critically acclaimed software is now on build v2.3 and has been used to manage compliance processes for hundreds of private placement securities offerings. Mr. Ruark holds a degree in Economics from Elon University in North Carolina. He is regularly scheduled as an expert speaker at various venture capital, real estate and corporate finance conferences with regards to private placement offerings and the syndication of investment capital.
CEO and Co-Founder
CEO and Co-Founder
Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.
Oscar Jofre 00:51
Well, welcome everyone, and happy 2023 It’s great to be back once again, with another exciting year ahead of us, we’re starting it off with KoreSummit real estate, of course. We’re talking about the JOBS act, I think it’s important that we understand all the regulations, the JOBS Act has actually implemented, you know, modified in order to give more of us the ability to raise capital from a larger audience, but more importantly, a playbook, a starting point on how to do it correctly. And then, of course, real estate JOBS Act and tokenization. There isn’t a day that goes by that you don’t see that word flying around on the internet, on articles and blogs, what is all the chatter about tokenization? And what does it mean, I know the terminology that was often used is called liquidity. But we need to be careful with that because we don’t want to mislead anyone that it’s instant liquidity. But tokenization does offer some great ways for investors of Lars to do things they couldn’t do in the past more efficiently. And that’s where tokenization really has its value. But we’re gonna get started this week, it’s going to be Monday, Tuesday, Wednesday, Thursday, and Friday, every day at 2 pm. Eastern Standard Time. We’re going to have some great speakers, and are going to walk you through the regulations, you’re going to learn about how to do this correctly, compliantly. This is the important aspect of everything we do here is to make sure you do it compliantly to make sure you do it in a way. So you don’t have to do a refund of investor’s money or have to explain yourself to the regulators, either the SEC or FINRA for the activities you’ve been undergoing. And it is an exciting time. 2023 is exciting. And one of my colleagues who one of our KorePartners recently came out with an article I think it’s his title is fantastic. Real estate is not an alternative. It’s a core investment in when you look at its size of it. I mean, it’s a $326 trillion sector, which includes stocks and bonds, of course around the world. And so it goes to show you that there is a lot of activity, there are so many different models for real estate, where sponsors can do direct offerings, they can work with syndicated broker-dealers, you can use different regulations. That’s correct. There are regulations that nobody thought were even possible to use for real estate such as regulation CF. And we’re seeing some very interesting models in how that is delivered to clients, and such as ll series model using Regulation A plus. So we’re not only expanding the playfield for everyone, we’re showing you how to do it compliantly. And the experts you will hear from this week from the lawyers, the FINRA broker-dealers, the investor acquisition firms, the SEC-registered transfer agent, the secondary register FINRA, SEC, ATS. You’ll hear from them on how to do all of this in a way that you can help the investors and of course for investors to know as well how this will help them invest in companies and how to spot a company that is doing a legitimate offering to for companies how to prepare, what do you need? What should you be aware of? Why is there so much discussion going on in real estate? So that’s the exciting journey that we will go through this week. And at any time that you have any questions, do not hesitate. Put in the chat there. We have individuals that will be moderated to bring those points to the speakers to bring that discussion right there. And then when you want that question to be answered, but the most important thing here is education, education, education. You should be able to walk away from this and say, Okay, I have a real estate project. I know what I need to do. I know what regulations have repetitively used, here are some of the lawyers that I could speak to. And these are the broker-dealers that have a specialty in this area. And this is how I can make it happen on my own terms. And that’s the outcome that we always hope for. So I hope you enjoy an enjoyable week, I hope you’ve stayed and asked questions, as well, I should remind everyone, if you want to meet any of our speakers, just simply go to KoreSummit.io. Click on speakers, you will find their profiles, you will find their LinkedIn links, and their email addresses. So you can reach out to them as much as you like to answer your questions that are very specific to help you in your journey for your real estate project. So without further ado, I have our great friend of mine, a colleague, I believe you joined us you you got the technical issues sorted out,
Douglas Ruark 05:56
Oscar Jofre 05:57
Oh, fantastic. So, Douglas, everyone Douglas Ruark is the president CEO, and founder of Reg D Resources, who has been doing this for 23 years. So I got a question for you, because you know it in the 23 years, is how what percentage would you think real estate accounts to all the work that you’ve done in your firm?
Douglas Ruark 06:26
I mean, easily 50%? Easily 50% is real estate, which is why I think this, this is just going to be such an impactful summit here is, you know. There are so many real estate operators that use these programs to raise capital. And then, you know, add in the tokenization aspect, you know, add in the fact that now, you know, you have the ability to have hybrid securities, like tokens being sold to these offerings. So yeah, it’s very impactful. And I think when you think about it, you know, real estate syndicators, they’re frequently out raising money, whether it’s for a new fund, whether it’s for a new development project, so they’re always using these programs. And, you know, it’d be interesting to pitch the question to Nate Dodson, because obviously, you know, he does a lot of this work as well. And I bet he probably would say the same thing that probably 50% or more of his work is in real estate.
Oscar Jofre 07:17
Yeah, no, it’s. So it is. I mean, when Andrew Corn wrote that article, as he said, it’s the core investment. So it’s, it’s accounting for 50% of individual investors investment dollars are going into real estate, and now different asset classes are being shown to everyone. Or maybe I shouldn’t use that word, I should say that it’s been being given as an opportunity to more individuals than in the past didn’t get a chance to invest. That would be correct, right?
Douglas Ruark 07:46
Yeah, well, I think to that’s where, you know, Reg CF and Reg A+ have become so impactful, because ultimately, it’s it’s giving the entire investing public, the, you know, the ability to invest into these offerings. So CF and Reg A’s, you know, now you can generally solicit you can raise money from everybody. You get that beautiful KoreConX three-minute investment process that we all know and love. So, you know, it really is these offerings, now, we’re reaching an entirely different audience that was, you know, we’re in it used to be sophisticated high net worth accredited investors that would only get access to this stuff. Now, it’s the average everyday person. And I think to real estate really fits in well here because everybody can get their arms around real estate. And so I think far, as far as an asset class goes, you know, it’s that’s where it having a CF or RegA in place, I think really helps because it is gonna give you access to the entire investing public.
Oscar Jofre 08:42
I agree I agree. And for tokenization, I know the chatter or not so much chatter, the amount of information that’s floating out there. One of the things that I’ll tell everybody here, the audience, as you’re listening to this, I think it’s always important to understand that when you look at capital raising, and you look at tokenization, the starting point always must be, it should always be the regulation. The regulation will help you navigate which path you need to take. And I think this is an important message that needs to be getting across rather than, Oh, I want to tokenize I want to use this chain, this protocol, and all that. No, that’s the last space you want to start with. You want to start with, I want to use Regulation A plus Regulation CF. Okay, what’s my starting point, or I want to use Regulation D, what’s my starting point? Because what you’re going to find depends on what regulation you use, you have very different starting points on what you can and cannot use based on the regulation. So this is kind of the unveiling that will happen here. If there’s something we miss and something that comes up during the time that we’re having these panels for you. Please submit your questions. I promise you this. We will cover them in one form or another during this week or with our panelists here. We will get you your answers, we want to truly help you get better clarity in this market. So, without any further ado, my colleague, Douglas Ruark will present the very first panel for today, which is exciting because it, it really does start with, with them, it starts, you know, you got to have a beginning to all of this.
I think sometimes people just jump right into the market. But more importantly, we’re gonna start with why, and which is what, you know, Douglas and I’ve been doing this whole time it’s talking about the why real estate? Well, we’ve talked about it from the tokenization, the regulations, the first panel, you’re going to incorporate that with the lawyers, the broker-dealer with Douglas, in his vast experience, and call this like Richard Johnson as well. There’s going to be a great discussion in this area, regarding real estate, and of course, tokenization. So I’m gonna leave you with this last few minutes before a panel gets started. Because I think it’s important, it’s one that I get asked a lot, Doug, and I think it’ll, you know, you’ve asked me in the past and in because people talk about it in such a way that, you know, I read recently read an article they’re saying tokenization is the holy grail of real estate. And I get frustrated sometimes because I think, for the audience, I know it can be, it can be confusing sometimes. And I’ve seen that I, I see some of your questions that are coming in. And I understand that. And so let me give you kind of a really quick glimpse of tokenization, how you should separate it, it’s actually separated into three different buckets, you know, this is going to help any investor out there, or anybody looking to tokenization blockchain or anything like that bucket.
Number one, we call this the land titles bucket. So, in the land titles, today, land titles are managed by government regulatory bodies, and although if they adopt blockchain technology, or any form of it, in order to tokenize, that the real estate property and all while by far the biggest game changer of all, are there people working on that? The answer is yes. Is it there yet? The answer is no. Can a third-party company attempt to do it? The answer is yes. But ultimately land titles is owned and governed by countries and jurisdictions. So the likelihood is you’ll need to partner with him anyway. But that is a game changer. If we can start tokenizing every single piece of real estate sold and bought everywhere, boom, it changes, you know, we won’t have the issues we’ve seen where somebody can come and stay, you know, sell your house while you’re away on holidays, which has had, which has happened with Blockchain technology that would be eliminated. The second use for blockchain and tokenization is when you have a property, and you have, you know, rental income from it. And everything is tracked within the blockchain, that immutability, that transparency. So as an investor, you’re getting real-time information. When you tie the two together with land title’s Wow, you got to, you know, you know, that’s the ownership that you got land title’s report, you eliminate the middleware of all the verification. And then on top of that, you have that immutability information on the value and the income that is generated. And the third piece is where it gets confusing. The third piece is, I have this piece of real estate, or I have this project, and I need to raise capital. And people think that you can apply, you know, the same scenario for land titles as he could manage in your operations to this, and you can’t, because now you got to follow the regulations, you’ve got to follow other Regulation D. Which has a limitation of 2000 shareholders. So please hear this one out. Limitation of 2000 shareholders test 2000. And including if you add a Reg S is 2000. So the question then really is question is, what is the benefit of tokenization? If you can only have 2000. Investors know if you are institutional investors, there’s only one, it makes a lot of sense. But if you are, you know, going after accredited investors, the numbers go far, really quickly. So this is the kind of thing that you will be discovering this week, and hopefully, in our panel with our buddy Douglas Ruark as my alarm is going off here. Gotta love this. Douglas, the floor is yours. All right.
Douglas Ruark 14:31
Thank you, Oscar. Well, first of all, we got a really, really good panel coming up. We’ve got some really, really experienced people here. And so I’m excited to get them on board. In this panel, really, I think what we’re going to do is we are going to chat a little bit about the regulations. As Oscar said, that really is where it starts. And then from there, we’re going to start talking about kind of the differences between commercial Real Estate and residential, we’ll get into kind of the legal difference between those. And then we’ll start talking about the process of online capital formation. And then we’re going to work the token angle and because tokens are a hybrid security, they are now being used in terms of raising capital or providing liquidity for real estate assets. And so we’re going to get some feedback from the panel on that. So, so yep, so it’s gonna be an interesting one. And we’ll, we’ll see, Rafael as far as we’ll close this out and get this one started.