All Forum Posts by: John Corey

@Joe Splitrock I forgot about Doom. I was not into the game personally, so not 'front of mind'. I remember people who were into gaming at the time raving about it.

The company that invented the game, ID Software, did so on a NeXT Computer. Another example of how cool Bill's development environment, NextStep was at the time. Provide great tools to skilled people and magic happens.

Did I mention that NextStep is the core of the present development environment for the iPhone, iPad and Mac? 

Back in the 1980s and early 1990s we used to say that hardware architectures change and evolve fairly rapidly. Doubling in speed and reducing the cost every 18 years; a shift from complex instruction set architectures to RISC, etc. Software architecture tended to last a lot longer for some reason. 25-30 years was what we claimed then. Get the software wrong and you would likely still be dealing with it decades later. Get it right and it would be a joy to work with for a long time.

@Chris Marshall

https://images.app.goo.gl/vF7DawZoPGCo5gJ67 is a short recording by a securities lawyer well know to the BP community. He explains what a security is.

If you google Howey test, you will find other descriptions in text format. There are 4 elements in most lists. The Supreme Court set the test and the SEC uses it. Your relationship to the cash investors does not factor into what is a security and what is not. Even a loan from a friend might end up being a security.

Once you master the topic, you can scale your business. In other words, knowing what a security is and how to correctly raise funds is something to master if you want to grow.

Chris,

Why do you think this is not a syndication? Multiple passive investors seems to be your intention. How are you legally avoiding a state or SEC registration?

There could be an apartment association which is more about landlords and less about syndication. A good place to learn some other details. The stuff other than fund raising.

Mentoring with a pro is one path. A common path historically. Others accomplish almost the same thing by joining forces, taking a job or some other way to work with an experienced syndicator without using the label 'mentor'.

Like most things in life, you can accelerate your life with knowledge that others had to invent a day at the time. Like learning about gravity without needing to sit under an apple tree and waiting to get hit.

Interesting question. Is the work 100% produced by AI or is a lawyer reviewing the results before sending it on to the client. 

At some level I trust the AI to get the details right and a human to understand the context better.

Welcome to BP.

I have spent a number of years at investment banks. Mostly in Europe though my role was to run a global team. I had staff working for me in the USA offices.

Learn by doing. Do not invest in any deals. Just run the numbers and discuss with others when you are not sure what to do or what something means.

 Generally, the cheapest money will come from banks. Or, other institutions. Lots of great reasons why their cost of funds will be the lowest.

When working with private money, you might find things go faster or the investor understands better what you want to do. You would be talking to a decision maker. That said, what out for the regulations.

There is a 4 step test for figuring out if you are offering a security (requiring SEC and/or state registration). A silent partner who is in it for a profit and you are in charge tends to trigger the security issue. The Howey test' I will drop in some text from https://consumer.findlaw.com/securities-law/what-is-the-howey-test.html below. You can use the URL to find more complete info.

So, the more silent you partner is the more likely you will be bumping into the SEC or the state regulators. There are some minor exceptions. Stuff that might work for 1 deal yet does not scale for larger or multiple deals run together.

If you want the partner to do something, it better be material to the success of the project and it better be something the person is competent enough to execute. You would be depending on a judge to form the same view so it needs to be obvious to someone not involved with the project that your partner is really engaged in a significant way.

All text below can be found at the website for FindLaw.

---------------

"The "Howey Test" is a test created by the Supreme Court for determining whether certain transactions qualify as "investment contracts." If so, then under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements."

"Under the Howey Test, a transaction is an investment contract if:

• It is an investment of money
• There is an expectation of profits from the investment
• The investment of money is in a common enterprise
• Any profit comes from the efforts of a promoter or third party"

"Although the Howey Test uses the term "money," later cases have expanded this to include investments of assets other than money. The term "common enterprise" isn't precisely defined, and courts have used different interpretations. Most federal courts define a common enterprise as one that is horizontal, meaning that investors pool their money or assets together to invest in a project. However, other courts use different definitions."

"The final factor of the Howey Test concerns whether any profit that comes from the investment is largely or wholly outside of the investor's control. If so, then the investment might be a security. If, however, the investor's own actions largely dictate whether an investment will be profitable, then that investment is probably not a security."

Old school tech guy who started with RE investing over 35 years ago.

- what do you do in tech

What I did in tech is a better question for me.

1. Degree in computer science - 1982. 

2. Moved from MA to Silicon Valley to work for HP. Co-authored the HP-UX standard (their unix operating system). As part of my day job, I was paid to be online long, long before anyone coined the term social media. Studied AI at Stanford part time. 

3. I switched to NeXT after 8 years at HP. I ran the IBM NeXT project for the NeXT side of the JV. I met a guy there named Eric Ly. More on him later. While at NeXT, I became friends with Bill Parkhurst. He invented the development environment, NextStep. Later, a guy name Tim wanted to use Bill's software. To obtain sign-off to purchase a NeXT Machine (the Cube), Tim needed to come up with a project. Tim Berners-Lee is his full name. The project was the invention of the Web. The first Web service was a NeXT Cube.

4. After NeXT and some further consulting at HP, I moved onto Swiss Bank Corp (SBC), London and worked on the client side of technology. Global projects, large budgets, interesting travel were common. I brought Eric in to Switzerland for a mini-project. Around the time SBC purchased Union Bank of Switzerland (today's UBS), I created a consulting firm. We worked for other banks. Sometime after that, as a favor to Eric, I was a beta user for his latest company. Eric has co-founded LinkedIn by this time so I was an early user.

- how do mix tech and REI

Nothing direct these days. I use or apply tech in innovative ways. FinTech or PropTech advisor. Structure, market, finance rather than the coding.

Over the years I have been online a lot with various RE platforms. This was before there was any BP. And then during the early days of BP. Low tech platforms back then compared to what people use today.

- which part is the side hustle Tech or REI ?

I am full time in real estate. SFR landlord mostly. The last 2 years or so, I have focused on crowdfunding, UK style. Think single-issue IPOs for someone's real estate deal. Way cheaper than what it costs to register with the SEC.

Looking to kick off a side venture (tech side hustle) in the trust space for real estate investors. Eric and I have been discussing what would be needed. Blockchain might be part of the mix.

Maybe going into the syndication world in the USA as I spend more time back in the USA. The main home for a while has been London. 

Portfolio is Hawaii to London with a lot of gaps. Very much a buy and hold sort of guy.