My first investment, I want a wedding venue

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My first investment, I want a wedding venue

Stephanie Gundy
Member since 2019 · 2 posts · 0 votes

Hi, I'm looking for some advice, and maybe a miracle.

I have been in the wedding industry for 6 years and looking for my own small paradise to offer ceremonies for the last 3.  And I believe I found it ... a brownstone "mansion" on 5 acres with a barn sitting next to the mountain and surrounded by majestic trees and the sound of water.  

It is a full rehab project and up for auction in 2 weeks, May 18th.  

I have: talked to a real estate investor without getting any suggestions, talked to an investor who said that he will be out of town until after the auction and wished me the best, had a general contractor look at the property but all he said was that everything is fixable, talked to my financial advisor who said that because I also want to live there my self directed IRA can not help me, and lastly my loan officer said that the bank requires that the property be habitable ... it's a rehab without a kitchen.

What am I missing?  If there is never a lack of resources only a lack of resourcefulness what have I missed?   The only person left to talk to is my accountant who is also out of town until next week. Do I need to look at this differently?  I am legally a minister, can that somehow come into play? 

I was excited about the BRRR method but ... any and all ideas would be greatly appreciated.

Thank you so much

- Stephanie

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    7y

    Stephanie:

    You picked a complicated project as a first investment.  I have a friend who was trying to do something similar so have some familiarity but they didn't want to live in the building.  Your concept has more moving parts.

    I'm presuming the biggest problem you have is insufficient capital.  If you don't have a rich relative, the nature of this project requires a complex solution.   I have a way it could be done. Unfortunately, your time frame is too tight for the auction date.  You would need to be able to buy the property with your own funds and try to raise the rehab dollars later.    I can only scratch the surface here, but this is the high-level overview of the process:

    • Develop a business plan that can show any investors your financial projections and how they would get paid back
    • Contact an SEC attorney to create a private placement memorandum so that you can legally collect funds
    • Start networking and raising money for your project, following SEC rules, of course

    That process would take at least a month but eventually could get you there.

    Good luck

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  • Stephanie Gundy
    OP
    Member since 2019 · 2 posts · 0 votes
    7y

    Hello Greg!  Thank you so much for your help.  It really didn't seem so complicated when I started, just me and a big house that needs rehab, on the auction block.  I think I will follow your suggestion and work on a business plan for starters.  

    Thank you! 

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  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    7y

    @Stephanie Gundy

    I think @Greg Scott has the right idea. 

    Just personal taste, but I tend to avoid projects that contain any more complexity than just tenants renting (AirBnB, Event Venues, Wineries, Restaurants, Nursing Homes, etc.). 

    That being said, there are a whole stable of people willing to sacrifice returns to do something that is a bit more exciting. This is the kind of investor you'll want to meet and understand over the next few years.

    You have the right experience to get the job done, and that's one more vote in your favor than I would offer to someone in another industry trying the same thing. I would focus some of your pitch on how the venue will better perform than a vanilla real estate investment in the same place. 

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