Stock Market Alternative – Hotels
Sometimes people think the only alternative to the stock market is buying real estate. Alternative investments like this one give you an easy way to diversify, without all the labor of owning a physical piece of real estate.
This particular investment is in hotels.
The fund raises money, purchases and renovates hotels, then manages the hotels for the fund.
The idea is to make quarterly income from hotel operations and final income on the appreciation as they sell the hotels in 3-5 years.
Here’s why I like it:
- A large amount of the owner’s money AND their friends and family are invested in the fund. You invest differently when your own money is at stake.
- Buying and renovating hotels is their only business and they’ve been doing it for a long time, as a group.
- Until they’ve made enough to pay the investors their earnings + their principle, management doesn’t take an income.
- They pay their marketing fees from outside the fund, giving the investor more return.
Since you might not read a lot of these deals, let me put this in perspective – most other offerings pay outrageous marketing fees (8-9%!), make 20% but only give their investors 5%, and they make money even as you’re losing it.
Not only do I like the above, but one of their first hotels was purchased under market value, so the ending return could be much higher than normal. They got a great deal.
I also think they’re in it for the right reasons.
Most people start off a conversation with how much I can make in fees, these guys seemed to be operating their business and needed another avenue to get capital, so they created a fund. Their main business and passion is hotels. Not all types of real estate.
The major risk investing in something like this is you’re putting your money with one company and if that company goes under, your money goes with it.
Final Details To Note:
Investing in something like this a 3-5 year commitment, longer if the market goes bad. They’ll hold the hotels until it’s profitable to sell them.
The minimum investment is $50,000. However, since I don’t make commissions, you can get a $50,000 investment for $46,000.
This investment is offering a preferred rate of return of 10% to the first investors.
*I’ve intentionally left the name of the investment out of the article for legal purposes. If you think this is something for you, please feel free to contact me.
I hope you find this helpful. Feel free to forward this on to anyone you think would find this interesting.
Have a wonderful day!