10 MILLION NETWORTH&NO CASH - Posted by Bob Fl.

Posted by Harvey Carroll, Jr. on March 22, 2001 at 23:39:36:

I agree with this guy. I spent the past decade working to obtain a BBA in Finance and Real Estate and a partial MBA. I also was a student of Trump and have spent thousands of hours crunching numbers in spreadsheets to package and sell the big deals.
The problem I have is that Lexington, Kentucky has no big deals. So, if you guys have some big deals and can offer me part of the action I can do the analysis and help package the deal…
JR

10 MILLION NETWORTH&NO CASH - Posted by Bob Fl.

Posted by Bob Fl. on March 20, 2001 at 21:01:07:

I am an expert at locating super deals and high equity acquisitions,but recognizing the application of very good terms is where I flunked out. With small projects up to $50,000.00 I dont have a problem locating cash, but I can’t seem to get the nack of attracting the investors with the millions. Example: Hotel,$7.2 mil. price,10% dwn, needs $2.2 mil. fix-up, 90% owner finance,equity-just under
$1mil. Example 2)Mobile home park,value-$1.6 Mil,price negotiated-$1mil,equity-@half a million. I’ve been laughed out of too many marble floored executive offices. I know there are investors out there with cash, but where are the
really rich ones. The pain of investing time and energy on high caliber deals like this that will not bloom because of lack of cash is absolutely excruciating. My problem is actually my asset,I am a stubborn,thick-headed non-quitter,
who doesn’t quit but doesn’t succeed either. (WHEW!) that was tough but I feel better now that it’s in the open.
Any advice for a "down and outer?"
Thanx, Bob

Re: 10 MILLION NETWORTH&NO CASH - Posted by Harley-CA

Posted by Harley-CA on March 21, 2001 at 19:42:07:

Bob,

To give you an example of how a deal of this type is put together “before” ever approaching investors, I’ll offer the following scenario:

Investor finds a great deal, let’s say on a high-rise appartment building that has gone belly-up before it could be completed. Let’s say it’s located on a prominent beach in Florida’s Gulf coast.

The investor feels that this could be a winner but isn’t sure until she gets some hard facts. Here are some of the things big money investors will want to know:

Demographic studies
Amount of cash needed
Who the management team is and their experience
Neighborhood statistics
Competitive analysis
Marketing strategy
Exit strategies
Contingencies
Work that needs to be done and the cost (broken down)
Time involved in rehabbing
Holding costs during repairs
Etc.

These are just a few of the things that investors are looking for. This is usually submitted in the form of a business plan or “prospectus.” Basically, you’re letting them know EVERY possible detail of the project including licensing fees, attorney’s fees, etc.

The process is involved but how hard are you willing to work for a couple of million dollars.

By the way, the scenario I suggested above was a Donald Trump deal in which he went to Lee Iococca for the money. Needless to say, Trump was 120 million in debt at the time he approached Lee. They did the deal and made about 40 million on paper on the deal in less than a year but the analysis was rock solid before Lee was approached with the deal.

This is another league altogether and one that can be profitable if your ducks are in a row.

Do some internet study about business plans and how to create them. They are very involved but whatever one human being can accomplish, so can you.

Hope this helps.

Harley-CA

Re: 10 MILLION NETWORTH&NO CASH - Posted by DanT

Posted by DanT on March 21, 2001 at 06:28:24:

Ditto to Nates comments. I know a couple of money guys and if you don’t bring them a 15 to 25% return you don’t need to talk to them. And as Nate said, you better know the deal and the business backwards and forwards. Do you know how to run a hotel? I worked in that industry for 7 years and I can tell you its a lot more than just renting rooms. 10% equity on investment? What about operational costs, bottom line, market share, market penetration. You get them picture I am sure. Nate’s right, move up to the next rung, not the next ladder. DanT

Re: 10 MILLION NETWORTH&NO CASH - Posted by Nate

Posted by Nate on March 20, 2001 at 21:15:03:

Bob,

You probably don’t want to hear this, but I have never been one for stepping around the sides of an issue.

As Ray Alcorn likes to say, “opportunity, without the capacity to capture it, is an illusion”. And I think that applies perfectly to you.

It sounds like you have grandiose plans, but do not have the capacity to carry them out. Frankly, based on your post it sounds like the reason is that you are a little bit out of your league. The information you posted about these deals is in no way sufficient for an investor with a lot of cash to determine whether or not it is worth their time.

Believe me, the people with lots of cash do not want someone who kind-of knows what they’re doing bringing them deals that they then need to fix. If you brought someone a deal of this magnitude, summarized like you summarized it in this post, I imagine they probably would laugh you out of the office.

I don’t mean to be harsh, but you’ve got to learn to walk before you can run. You said your experience is in putting together deals of $50,000 or less. Maybe you could move up to $100,000, or $150,000, and then move up from there. Making the leap from $50,000 to $7,200,000 is like trying to fly when all you have done is crawl.

Good luck, and keep plugging. If you are as tenacious as you state, you will eventually get there. Just don’t be in such a hurry.

Nate