Funding a $40-50M project with no capital or track record? - hospitality venue

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Funding a $40-50M project with no capital or track record? - hospitality venue

Kaitlyn Hendrickson
Member since 2026 · 6 posts · 3 votes

I’m early in planning a large, purpose-built hospitality/event venue — ground-up construction, total project cost in the $40-50M range. Over the past several months I’ve built a detailed financial model (stress-tested against construction overruns, booking shortfalls, and rate scenarios), identified a specific candidate site to start zoning conversations with the relevant county, and begun early architectural concept work. What I don’t have: a personal track record in real estate development, or significant capital of my own to put in aside from my experience in the wedding/hospitality business.

I understand the general framework — equity/debt structuring, “skin in the game” expectations for first-time developers, convertible notes for early-stage capital, bringing on an experienced development partner to cover the experience gap. What I’m hoping to learn from people who’ve actually lived is this:

1. Pre-Seed Stage (~$150-200K, to fund a land option, real architectural schematics, and zoning work) — beyond personal network, what actually worked for you to raise this kind of early capital with no track record?


2. The main raise (~$28-30M equity, alongside a construction loan) — in practice, is the development partner who solves the lender’s “experience” requirement usually the same person providing the loan guarantee, or are those typically separate roles? How did you structure and actually find investor-partners at this scale — a handful of large checks, a broader pool of smaller ones, or a mix?

3. Has anyone gone from “solid plan, no personal capital” to an actual closed raise?  What did that team process look like? 

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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1mo

@Kaitlyn Hendrickson It sounds like you were educated on syndications. Mind sharing what resources you used? To be completely honest, if you don't have $150K to begin putting the transaction, entitlements etc. together you are way over your head trying to do a $50M deal. I would say the same even if it was a much smaller transaction size.  If this is an area of interest, seek employment working for a company that specializes in this type of asset class, get exposure, build relationships, rise through the ranks of the organization first.

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1mo

    @Kaitlyn Hendrickson It sounds like you were educated on syndications. Mind sharing what resources you used? To be completely honest, if you don't have $150K to begin putting the transaction, entitlements etc. together you are way over your head trying to do a $50M deal. I would say the same even if it was a much smaller transaction size.  If this is an area of interest, seek employment working for a company that specializes in this type of asset class, get exposure, build relationships, rise through the ranks of the organization first.

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    • Kaitlyn Hendrickson
      OP
      Member since 2026 · 6 posts · 3 votes
      1mo
      Quote from @Stuart Udis:

      @Kaitlyn Hendrickson It sounds like you were educated on syndications. Mind sharing what resources you used? To be completely honest, if you don't have $150K to begin putting the transaction, entitlements etc. together you are way over your head trying to do a $50M deal. I would say the same even if it was a much smaller transaction size.  If this is an area of interest, seek employment working for a company that specializes in this type of asset class, get exposure, build relationships, rise through the ranks of the organization first.

      I appreciate the honesty. To answer your question, I’ve done a mix of independent research (industry articles, comparable venue case studies, real lending/syndication standards) plus using AI as a tool to help organize the research, build out and stress-test a real financial model, and pressure-test my own assumptions. I wanted the numbers and structure to hold up to scrutiny before I ever brought them to a real person. AI can only go so far though which is why I’m in here asking for more insight. 

      Realistically, my husband and I could put in a real but modest amount ourselves — likely low five figures toward the land option specifically, not the full $150K. Genuine question: does a smaller personal stake like that still count as meaningful skin in the game if it’s paired with a strong development partner, or does the dollar amount itself need to scale with deal size regardless of who else is involved?


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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1mo

    I fund these kind of entitlement deals .. However I only do those with projects that are By Rite and with very experienced folks in the space.. Or folks that have a lot of skin in the game and they need a gap finance.  

    I dont want to say it cant happen but someone would really have to take a liking to you and be sold on your ability knowledge and the site would have to be a slam dunk.. But for that size a project I am not sure a money person would do more than pay you a modest finders fee. 

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    • Kaitlyn Hendrickson
      OP
      Member since 2026 · 6 posts · 3 votes
      1mo
      Quote from @Jay Hinrichs:

      I fund these kind of entitlement deals .. However I only do those with projects that are By Rite and with very experienced folks in the space.. Or folks that have a lot of skin in the game and they need a gap finance.  

      I dont want to say it cant happen but someone would really have to take a liking to you and be sold on your ability knowledge and the site would have to be a slam dunk.. But for that size a project I am not sure a money person would do more than pay you a modest finders fee. 

      I appreciate your honesty regarding the finders fee.  I’m hoping to avoid that outcome if possible being that this is something I’m very passionate about myself.  It’s been something I’ve been building on for several years in regards to writing out how I want the business to run and what it needs to set itself apart. 

      My husband and I could realistically put in a real but modest amount ourselves, likely low five figures toward a land option deposit, not the full pre-seed number. Does that kind of stake change your read at all, or is the gap still too wide at this deal size regardless?

      And on the ‘by-right’ point, if the specific land I’m looking at is already zoned in a way that permits this type of use without needing a separate approval, does that meaningfully shift things for someone like me, or does it mainly just de-risk the deal for the money side without changing what role I’d actually end up playing?

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1mo
      Quote from @Kaitlyn Hendrickson:
      Quote from @Jay Hinrichs:

      I fund these kind of entitlement deals .. However I only do those with projects that are By Rite and with very experienced folks in the space.. Or folks that have a lot of skin in the game and they need a gap finance.  

      I dont want to say it cant happen but someone would really have to take a liking to you and be sold on your ability knowledge and the site would have to be a slam dunk.. But for that size a project I am not sure a money person would do more than pay you a modest finders fee. 

      I appreciate your honesty regarding the finders fee.  I’m hoping to avoid that outcome if possible being that this is something I’m very passionate about myself.  It’s been something I’ve been building on for several years in regards to writing out how I want the business to run and what it needs to set itself apart. 

      My husband and I could realistically put in a real but modest amount ourselves, likely low five figures toward a land option deposit, not the full pre-seed number. Does that kind of stake change your read at all, or is the gap still too wide at this deal size regardless?

      And on the ‘by-right’ point, if the specific land I’m looking at is already zoned in a way that permits this type of use without needing a separate approval, does that meaningfully shift things for someone like me, or does it mainly just de-risk the deal for the money side without changing what role I’d actually end up playing?

      by right is important in most transactions and in most jurisdictions.. Some areas variances etc are not hard to get in others darn near impossible. So one needs to know the playing feild when it comes to the planning department of the City/County. 

      When I looked at building an apartment building 140 units on land I owned the lenders required about 20% cash into the deal on top of the land for the vertical.. To be real your not going to qualify for any kind of multi million dollar vertical loan given what you have shared with your current experience and Cash position.  

      So you need to build the team. U need to raise a boat load of capital then you need a credit partner and a builder who can bond or a lender trust for such a large project. 

      Can it be done sure, will boil down to your presentation and if you can talk anyone into going into business with you. The folks that I fund entitlement monies for they sell to the big players they are in the SFR niche so they sell to Lennar Holt Toll DR those kind of players who will put up substantial non refundable monies on the larger projects.

      @Henry Clark  Had a good thought maybe start with something much smaller and work your way up.  In addition these things take not months but years to cobble together and go through the process.  The link below is one I funded in Bend Oregon  Lennar is the buyer my clients developed and entitled the dirt Lennar is already going vertical before they own it but they have put up millions in NON refundable money and now have spent millions starting to build. 

      This one took about 7 mil to come out of the ground.. My clients are going to make about 5 mil on it I think is the number and they have been working on it for well over 5 years. They were stuck with the last 1.2 mil funding they needed when they came to me and we were able to provide the capital in a fairly complicated security position to pull them through and get the project started. Lennar closes as soon as their punch list is done the plat they bonded for already so its just down to the city of Bend  signing off on all the improvements. 

      I wish you luck on it however I would personally be very careful not to spend your 401k or your savings on this without have a money partner and credit partner signed up already. 

      PS the link I tried to put on this would not load.. U can send me a PM if you would like me to share the link with you.



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  • Michael K GallagherBusiness Member
    Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
    1mo

    great responses here, don't have any direct experience with these funds but do have a role in some development projects and my peripheral understanding is that the "developer" or whoever is executing on the deal is generally required to have some kind of financial skin in the game up front in addition to some bonus type structures that I'm sure very on project and company.

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  • G. Brian DavisPro Member
    Investor · Hatboro, PA · Member since 2016 · 2k+ posts · 842 votes
    1mo

    At $40-50M, I’d be looking for an experienced development partner before I worried too much about raising the money. The model can look great, but investors and lenders are going to care a lot about who has actually done this before. You know the wedding and hospitality side, which is valuable. I’d want a partner who has actually taken a ground-up project of this size through zoning, construction, financing, and completion. I think having that person involved would answer a lot of your other questions, including how to structure the raise and who needs to provide the guarantees.

    2Reply
    • Kaitlyn Hendrickson
      OP
      Member since 2026 · 6 posts · 3 votes
      1mo
      Quote from @G. Brian Davis:

      At $40-50M, I’d be looking for an experienced development partner before I worried too much about raising the money. The model can look great, but investors and lenders are going to care a lot about who has actually done this before. You know the wedding and hospitality side, which is valuable. I’d want a partner who has actually taken a ground-up project of this size through zoning, construction, financing, and completion. I think having that person involved would answer a lot of your other questions, including how to structure the raise and who needs to provide the guarantees.

      This is really helpful, thank you. Makes sense that the partner would answer a lot of the downstream questions — raise structure, guarantees, all of it. I do have real hands-on experience on the hospitality/wedding side specifically, so I’m hoping that’s a meaningful piece to bring to that partnership rather than showing up with just a vision. Any thoughts on how someone in my position would realistically go about finding and vetting the right development partner before the raise even starts?

      0Reply
  • Kaitlyn Hendrickson
    OP
    Member since 2026 · 6 posts · 3 votes
    1mo
    0Reply
  • Kaitlyn Hendrickson
    OP
    Member since 2026 · 6 posts · 3 votes
    1mo

    @Account Closed - Would love to hear more, mind sharing a bit about your background and what kind of projects you’ve been involved in? 

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    1mo

    Start small and Make Your Big Mistakes Early.

    How confident are you? Your asking someone else to put up $50mm.
    Cash out both of your 401ks.  Ask your parents to mortgage their houses. Ask all of your friends to invest $50k each.  Are you that confident?

    Did you do wet or dry fire suppression?

    What ADA features did you design in?

    How long did you finance interest only during construction period and rent up period?

    What parking lot ratio to sqft did you plan?

    $50mm other decisions.  

    All of us have to make mistakes.  No way to skip.  You can speed the process up with mentorship programs but you have to find a good one.  

    Step back.  Do a $2mm venue.  

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    1mo

    Kaitlyn, for a $40M to $50M ground-up hospitality project with limited development track record and little personal capital, I’d focus first on making the team and deal credible enough for institutional capital.

    The biggest move may be bringing in an experienced development partner or co-GP who has completed similar projects. That can strengthen the budget, entitlement plan, lender package, guarantees, operating model, and overall investor confidence.

    For the pre-development raise, I’d also involve securities counsel early. Once you’re offering ownership or investment returns, the way you raise capital matters and should be structured properly. The developer, guarantor, operator, and equity investor also do not necessarily need to be the same person.

    On the tax side, I’d plan for cost segregation while the project is being designed and built. New commercial construction can create meaningful opportunities to identify shorter-life components and land improvements once the property is placed in service.

    But I would be very careful not to promise blanket tax savings to potential investors. A cost-seg study may create substantial accelerated depreciation at the partnership level, but the actual benefit to each investor depends on their ownership allocation, basis, at-risk position, passive-loss limitations, and individual tax situation. The tax story should be modeled and presented as a potential benefit, not a guaranteed investor return.

    For a project this size, I’d build the experienced team first, then structure the capital and tax strategy around that team.

    Happy to connect!

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1mo
    Quote from @Kaitlyn Hendrickson:

    I’m early in planning a large, purpose-built hospitality/event venue — ground-up construction, total project cost in the $40-50M range. Over the past several months I’ve built a detailed financial model (stress-tested against construction overruns, booking shortfalls, and rate scenarios), identified a specific candidate site to start zoning conversations with the relevant county, and begun early architectural concept work. What I don’t have: a personal track record in real estate development, or significant capital of my own to put in aside from my experience in the wedding/hospitality business.

    I understand the general framework — equity/debt structuring, “skin in the game” expectations for first-time developers, convertible notes for early-stage capital, bringing on an experienced development partner to cover the experience gap. What I’m hoping to learn from people who’ve actually lived is this:

    1. Pre-Seed Stage (~$150-200K, to fund a land option, real architectural schematics, and zoning work) — beyond personal network, what actually worked for you to raise this kind of early capital with no track record?


    2. The main raise (~$28-30M equity, alongside a construction loan) — in practice, is the development partner who solves the lender’s “experience” requirement usually the same person providing the loan guarantee, or are those typically separate roles? How did you structure and actually find investor-partners at this scale — a handful of large checks, a broader pool of smaller ones, or a mix?

    3. Has anyone gone from “solid plan, no personal capital” to an actual closed raise?  What did that team process look like? 


     A lot of good comments on this post. First thing that comes to mind for me is to get it entitled and sell it. When I ran a MF division for a developer, at first they were acquiring property and once entitled closing on it and then building the project. Over time they started partnering with more experienced operators and splitting the deals to eventually realizing the time and risk was notworth it and they would get the property entitled and then sell it to the more experienced operator. did they give up some upside, absolutely but they were getting money years ahead of when project was completed and not taking on allthe risk.

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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    1mo

    OP let’s work this backwards forget the details.  Make it operational.

    Change these numbers as you see fit.

    P/I payment- say on $38mm at 7%_25% down.  20 year term.  5 year balloon.  Off the cuff $3.5mm per year.  If investors they will want say 12%.

    Property tax.  Say on $50mm.  $1.5mm per year.

    Insurance $400,000

    Payroll not including caterers.  $1mm.

    Utilities $200,000

    Just the above costs high level.  $6.6mm per year.  Not including income taxes.   Assume the customers pay any sales tax.  Use $8mm as a revenue number.

    $8mm divided by 200 days rental.  $40,000 per day average.  

    For that type of cost it will need hotels nearby or attached.  An extra entertainment pull nearby.  Which means high dollar land.  Select customers for wedding venues or corporate seminars. 

    This isn't a REI investment for your portion it would be a Job. You're not bringing enough to the table as an investment. And unless you have run these the investors won't hire you.

    Start small.   Build your portfolio of experience.  

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1mo

     What you should know you're up against:

    1. You selected one of, if not the most difficult asset classes to raise capital for. 

    2. You selected an asset class that traditionally attracts the lowest leverage debt, meaning more LP equity needed.

    3. There is minimal appetite for hospitality assets outside of those with proven track records. Even those with proven track records are more inclined to get involved with hospitality projects that part of a larger development strategy that incorporates diversified uses and income streams rather than a standalone venue concept. We are talking hotel, offices, apartments, retail etc. etc. The venue becomes a smaller portion of the overall revenue model and becomes easier to attract financing.

    4. Assume 5% minimum equity contribution, but the true cash outlay usually far exceeds this with heavy reimbursements only if the project is funded and moves forward. 

    5. You mention you do not want to pay finders fees, I don't believe that's even a plausible option. Those with real equity connections are not risking their relationships or reputation on this fact pattern. Expect to pay a salaried employee and spend some serious cash on marketing to get in front of the least sophisticated people because that's who you have to market to. I really do not believe even a 506(c) would work because accredited investors are not going to buy in. This means Reg A so you can market to non-accredited investors.

    6. Even if you are trying to attract a more seasoned GP, the person who has the means and wherewithal to be the GP and lead this type of project is rarely interested in your preliminary diligence. There is so much more nuance to this type of asset class than many other asset classes that have more uniformed pre-development and diligence standards.  They are going to feel the need to complete their own.


    I'm currently advancing some turn key restaurant concepts which are part of mixed use projects and previously worked for a larger hospitality REIT and would be happy to share more about my personal experiences in this space.

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    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      1mo

      @Stuart Udis to add to this - a regulation a+ offering would cost you $50-100k to get launched and then expect to spend $4-6M ti raise the 40M+ 

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1mo
      Quote from @Stuart Udis:

       What you should know you're up against:

      1. You selected one of, if not the most difficult asset classes to raise capital for. 

      2. You selected an asset class that traditionally attracts the lowest leverage debt, meaning more LP equity needed.

      3. There is minimal appetite for hospitality assets outside of those with proven track records. Even those with proven track records are more inclined to get involved with hospitality projects that part of a larger development strategy that incorporates diversified uses and income streams rather than a standalone venue concept. We are talking hotel, offices, apartments, retail etc. etc. The venue becomes a smaller portion of the overall revenue model and becomes easier to attract financing.

      4. Assume 5% minimum equity contribution, but the true cash outlay usually far exceeds this with heavy reimbursements only if the project is funded and moves forward. 

      5. You mention you do not want to pay finders fees, I don't believe that's even a plausible option. Those with real equity connections are not risking their relationships or reputation on this fact pattern. Expect to pay a salaried employee and spend some serious cash on marketing to get in front of the least sophisticated people because that's who you have to market to. I really do not believe even a 506(c) would work because accredited investors are not going to buy in. This means Reg A so you can market to non-accredited investors.

      6. Even if you are trying to attract a more seasoned GP, the person who has the means and wherewithal to be the GP and lead this type of project is rarely interested in your preliminary diligence. There is so much more nuance to this type of asset class than many other asset classes that have more uniformed pre-development and diligence standards.  They are going to feel the need to complete their own.


      I'm currently advancing some turn key restaurant concepts which are part of mixed use projects and previously worked for a larger hospitality REIT and would be happy to share more about my personal experiences in this space.


      I missed the wedding part of this.. My wife brokered an old mansion that the buyer converted and when I lived in the Napa Valley one of our neighbors converted his barn and then did upscale landscaping. world class location though that Napa valley is.. so maybe look for something like that wiggle in on a lease and launch it.
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  • Dominic Mazzarella
    Investor · Hendersonville, NC · Member since 2016 · 498 posts · 285 votes
    1mo

    Lots of good advice already. I’d be careful treating capital as the first problem here. At this size, capital is probably one of the last things to show up, after the team, site control, entitlement path, construction plan, guarantees, and operating story are credible.

    Your wedding/hospitality experience is valuable I'm sure, but on a $40-50M ground-up project it probably does not replace a development track record or balance sheet. If you want to stay in the deal instead of just ending up with a finder’s fee, I’d think hard about a smaller first version, a lease/control structure, or partnering with an experienced developer where your role is tied to the hospitality concept and operations. That may be a more realistic path to ownership than trying to raise the whole capital stack around a first-time development. Just my 2 cents.

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  • Michael Eskenasy
    Investor · Pacific Northwest · Member since 2026 · 511 posts · 290 votes
    3w

    I think the biggest issue here is that you’re treating this as a capital-raising problem before it’s really a capital-formation problem.

    At $40–50M, nobody serious is funding the concept just because the model is detailed. They’re funding a de-risked project with a credible execution team, site control, entitlement path, validated demand, realistic construction pricing, operating assumptions they can independently verify, and a capital structure that survives downside cases.

    So I’d separate the two raises completely.

    The first $150–200K should not be thought of as “seed money” in the startup sense. Its job is to buy information and eliminate uncertainty.

    That money should get you things like:

    site control

    zoning/entitlement analysis

    real schematic work

    preliminary civil/site feasibility

    credible construction pricing

    market/demand validation

    operating assumptions tied to evidence

    an experienced development partner

    and a clear list of what still has to be true before institutional capital becomes realistic.

    If that first tranche is spent correctly, it should either kill the project cheaply or materially increase its probability of being financeable.

    That’s valuable either way.

    For the larger raise, I would also be careful about assuming the “development partner,” guarantor, equity source, and lender-facing sponsor all need to be the same person. They can overlap, but they are solving different problems.

    One person may bring the development track record.

    Another may provide balance-sheet strength or guarantees.

    Another may lead the equity.

    Another may actually operate the venue.

    The key is making sure the team collectively covers the execution risks instead of trying to find one mythical partner who solves everything.

    The question I’d be asking now is not:

    “How do I raise $30M?”

    It’s:

    “What would need to be true for a sophisticated investor to believe this project is actually executable?”

    Then work backward from that.

    If you can get from:

    concept → site control → entitlement path → validated demand → credible budget → experienced team → financeable structure

    then the capital conversation becomes much more real.

    Without that sequence, you’re probably trying to raise money against assumptions that investors will immediately want to re-underwrite themselves.

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