Why I Invested Into a Wedding/Golf/Hotel Resort

This past week I invested into a wedding/golf/hotel resort business in New Jersey: LBI National Golf & Resort. Here is my thought process behind this investment, analyzing it with the 4 factors of risk, return, time & turn. 

The operator, Accountable Equity, isn’t in the golf business - they are in the wedding business. They acquire distressed properties that can be turned into wedding destinations. Golf fees, hotel, food, & drinks are all ancillary revenue drivers around the primary wedding business. 

You earn money in direct correlation to the value you create. Accountable Equity creates a tremendous amount of value by taking a property that does little/zero in weddings and turning it into a destination that generates millions per year.

Risk

When breaking down the risk of an investment I start by considering: 

1. Trend

2. Operator 

3. Asset

A) Trend - it’s much easier to make money when the wind is behind your sails then forcing your way through it. Like death & taxes, you can count on people getting married every year. 50% of people then get divorced and 80% of those people remarry. 💰💰💰

In addition to the weddings, golf is also not going anywhere. Thanks to COVID the golf’s popularity has increased:

So with weddings + golf we’ve got the wind behind our back

B) Operator - When looking at the operator I want to see a solid track record of success with similar deals & a team of rockstars. 

The sponsor has Accountable Equity checks both of those boxes. They have a rockstar team led by Josh McCallen. This is the 3rd property acquired that will be following the same business plan as their other two: 

Renault Winery in New Jersey

Kent Manor Inn on the Maryland Coast. (I invested into this one in 2020)

The operator also runs the hospitality company called Vivamae controlling 100% of the guest experience.

C) Asset - stocks are tanking, multi family & self storage are way overpriced. Inflation is out of control, interest rates are skyrocketing. Investing into businesses is the way to diversify and battle all this. LBI National is both a real estate & a business investment. 

As a real estate investment we benefit from depreciation, appreciation and principal pay down. 

As a business investment we benefit from the ability to keep up with inflation and for the cash flow to grow exponentially from multiple sources - weddings, golf, hotel, food & drink. 

Return

Accountable Equity offers a few different ways to invest depending on your goal: cash flow or appreciation. 

They have one share class that acts like debt. You get a fixed monthly payment and all your capital is returned within 5 to 7 years. This option is lower risk but your returns are capped with no participation in the upside appreciation. 

They have another share class that offers a preferred return plus participation in the upside. For this class the projected return (IRR) is 20% per year. 

Since I’m in a growth stage in my life I’m choosing the option that provides the greatest opportunity for appreciation. 

Time

How much of the investment’s success is predicated on my personal time? 

My favorite, zero! From time to time I will have to drive up there to make sure the golf course is looking good and to make sure the beer is nice & cold. 

Turn

How long will my money be tied up before it returns to me? 

Many syndications follow a similar business model:

1. Acquire 

2. Renovate 

3. Increase NOI

4. Sell in 3 to 5 years, returning capital + profits  

5. Find a new syndication to repeat 

Accountable Equity plans on operating these properties forever. Their model is:

1. Acquire

2. Renovate

3. Increase NOI

4. Refinance in 5 to 7 years to return capital 

5. Hold & cash flow in perpetuity

I like having a diversified mix of assets & strategies. LBI National is a long-term play, one that will pay dividends for decades.

Learn & Grow 

Due to the recent market volatility lately I get a lot of people asking where should they should invest. My first piece of advice is to read Morgan Housel’s book The Psychology of Money. For most people investing is a long-term game. If you are playing the long term game, what happens in the short term means nothing & you should ignore it.

For those who want to break the chains of Wall Street then start learning about “alternative investments”. Unfortunately due to lobbyists and the SEC’s desire to keep all your money in Wall Street many great options, such as LBI National, are restricted to only accredited investors. 

If you aren’t accredited yet you can still invest actively & passively into real estate & businesses but it takes some more work. You have to find smaller joint-venture opportunities instead of syndications.

Now is a better time than ever to learn about syndications, alternative investments & passive income. The more you learn the more you will grow. 

Business with Beers

Every week on my podcast I bring you the stories of entrepreneurs about building their business, wealth & passive income. Most 2 recent episodes:

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