Closed our most recent International Syndication in Belize, Opening our next one now - Lessons learned

[Eric Tait]

Hello Everyone, 

I just wanted to give some insights into our experience with raising capital for an international resort development project.   

We used a Texas based LLC to give the investors a sense of security that a U.S. based company will be owning the property as opposed to setting up an off-shore entity to hold title to the property.

Our project is individual lots with multiple units of new construction on the lots within a master planned community where we are building hotel inventory to be held for long term (3-5 years) cash flow. 

Some of our observations are:

1) The majority of investors will come in at the minimum investment amount.

2) Investors need 3-5 touches before they even understand what it is that you are offering them. Even after sitting down with people for an hour individually, it took email updates and follow ups before many investors had a clear picture of the Project and investment opportunity.

3) High level education about the market is key: judicial and political structure, growth drivers, safety, etc... are huge front end educational points.

4) Some people thought that they needed to see the property - we were able to overcome this through the presentation and juxtaposing this investment with their stock holdings and their lack of knowledge of their paper asset portfolio. 

5) Owning a piece of a hotel vs. a time share - this may be peculiar to our deal in the way that we are developing the property, but it took an explicit highlighting to make investors clear that they were owning a piece of a hotel (land, structures, fixtures etc...) as opposed to a time block.

6) Strike while the iron is hot - If someone is ready to invest, TAKE THEIR MONEY!!! Time dissipates energy and enthusiasm.  

7) You need 2-3 times the verbal commitments than what you need to raise - People will tell you that they are going to invest, and then back out. Better to get over commitments and create a waiting list then to get verbal commitments for what you need and fall short.

For those of you with syndication experience this is old hat I am sure, it was just surprising to me how moving into a new market these things pop back up as speed bumps.  

Would love feedback on other impediments that people have had to their own syndications in general and how you all overcome them.

[Jackie Lange]

Since this is held in a Texas LLC, hopefully you ran the whole scheme by an SEC attorney. Syndication has lots of rules and regulations in both the Texas SEC and the US Federal SEC.

Did you provide a performa?  That is required for this kind of investment.   

Is your company registered with the SEC in Texas and the US SEC? 

You should only work with accredited investors.  

Hopefully you also disclosed that Belize defaulted on their debt and the whole country is in serious financial problems.