I have been an investor in real estate syndications for many years. I was always liked these types of investments. Sometimes they are very complex for me to understand, many legal documents, many clauses....
I have some tech background, with some spare time. I started working on software for real estate sponsors that helps creating investment offerings (investment memorandums & PPM's). I'm working on a program that allows sponsors to input their business plan (can even be a single-family home and outputs a nice investment memorandum with a basic PPM for investors.
I'm working on the software (it's a hobby), but I was wondering if there is anyone here with experience in syndications (also as investors) to share some ideas with?
There is already software for this:
I'd recommend you get an attorney on your team if this is something you plan to pursue seriously.
Bryan thanks for the replay.
I took a look at iDisclose, impressive software, thanks for the link :).
Can you share with me your thoughts about these type solution for PPM creations?
Georgia Quinn is a securities attorney and founded the company. Doug Ellenhoff later came in and has one of the most well-known firms on crowdfunding securities laws in the country. They know the law, which is a pretty big issue with writing the software properly.
I haven't used their software, but my impression was that it was designed for Title III offerings where the issuer couldn't afford a lot of legal hours for the size of their raise. This seems like the only logical time you'd want to scrimp on the insurance policy you have as an issuer. I am pretty sure they offer a legal review in addition to using the software to pump out disclosures. I'm not sure how they handle the company agreement with software and to me this is the most important of the three main documents.
Software is good for many things, but I'm not sure it is ready to take over the legal profession just yet.
I haven't used the software either, but I've met Doug Ellenhoff at a lawtech event a few months ago. There are a number of legal software startups out there but iDisclose is the only one that I know of that does boilerplate PPMs online. The thinking here is that there is a ton of boilerplate language that can be tweaked with reasonable customization with the use of some basic questions and inputs. Anthony Zeoli had a nice summary of it: https://crowdfundinglegalhub.com/2015/10/02/idiscl...
I understand why on small offerings you would like to "cut" on the legal fees. It also looks like this is pretty complex software for different types of offerings. I am wondering, on simple real estate deal, do you actually need all that complex flexibility?
In a lot of ways the smaller deals can be more complicated than the larger ones. They often have more custom stuff and are less standardized.
See if you can get a securities attorney partner. I'd steer far clear of developing software without an experienced legal partner. Securities law is extremely complicated. The risk you'll screw it up is pretty high without the proper guidance.
@Tom Ravid You may want to connect with Michael Blank. He does primarily Apartment Complex Syndication. I purchased some software from him a few years ago. I don't know if he's on bigger pockets or not, but if you are interested i can put you in contact with him. PM me if your interested