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| Again. You advance one more excellent thought.
However, these boys think they can get their $$$ a bit faster..add value in big, big chunks, or eat a loss....in resorts with 5-star hotels..luxury bungalows selling on lots of $500K or more each...my friend has a strip of ocean front (several miles) he picked up in the sixties for about $100K in the Islands....thinks its worth now about $35 Million but does not want it appraised for a variety of personal reasons...needs folks who understand that unique market and will proceed without an appraisal--for a project which includes high profile golf courses & etc. as his wife is not willing to sign onto a mega-loan to develop it & don't blame her, nor does he. However, these guys are very willing to look at anything....has to be in the form of a well prepared business plan with all i's dotted & t's crossed & then they send a group of German CPA's out to investigate....if it makes that cut....you jump on a plane to Frankfurt....if they like all the principals and the deal still survives their expert investigation...they fund it. Not quite that simple as their concept is unique. Among their wide array of investors they have folks who've invested in all sorts of projects and have been through the start-up & etc....for example, an ethanol facility, of which they seem to have some interest...they already have folks in their group with experience in those investments and the sort process would include those fellows. These are not Ivy League theory -Ivory Tower guys, these are knowledgeable & experienced fellows who've made money in other industries. I've been through these deals before, not with these particular folks, but it usually requires about 6 months to either make the cut or get a 'no thank you.' My friend knows one of these boys & the reason for their thorough approach...they do non-recourse deals in many cases. The general idea is to get a project operational.....then profitable...then convert the debt to equity & take to either the Frankfurt stock exchange, which has a lot of USA projects on it,..or the over the counter market....that's where they make their big bucks. Debt to equity conversion. That's when the other folks with pension money & etc....buy it in the form of stock & hope for the best. A little bit like buying soybeans at $9...might go to $15....might go to $5...just have to hope for the best. But, when dealing with folks with bi-weekly pension money coming through the bank, and every month and in big chunks....they feel they can afford to miss one occasionally. | |
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Money Guys
