All Forum Posts by: Joon Kim

Looking to purchase my first property for STR and looking at an existing STR business.

The seller is asking for 100k on top of the asking price for basically the right to continue using the property as a STR as well as any furnishings in the house.

Is this a typical arrangement for purchasing a pre existing STR? I can understand a side arrangement for furniture that wont be covered by financing but the rest sounds pretty questionable. They operate strictly on VRBO and claim that they can transfer the account and any listings to me. The account has about 30 positive reviews with a annual revenue of about 86k. I havent really looked into the VRBO TOS to see if this is even kosher. The exact language is below:

"Please note this property price is reflective of
a residential unit and not short-term rental. Should the purchaser
like to continue utilizing this property as a Short-Term Rental the
purchaser will agree to pay $100,000 for the business use,
furnishings, and digital media. If property is purchased without
purchasing the business, restriction will be placed on the deed at
settlement to not allow new owners to operate this lodge as a
short-term rental for a period of two years."

I listened to a recent podcast interview you did regarding capital raisers. My takeaway is that people that just raise funds from investors without contributing anything else to the GP are basically brokering/dealing and potentially setting themselves up for SEC complaint/penalties if anything goes wrong with investment.

  https://lifebridgecapital.com/2019/09/ws319-the-dilemmas-of-raising-capital-today-with-amy-wan/

I dont quite understand this practice as I would prefer to go through and have communications with the actual people basically operating and managing the deal.  Im not sure how one cursory phone call makes me locked into their investor pool for life on all future deals from that sponsor.     

I was asked to do this on syndicated deal (go back to the capital aggregator) and just decided not to invest. 

 Those are my exact feelings as well.  Quite misleading and preying on the uninformed investor. 

Ive also noticed a proliferation of more people starting a podcast or being on a podcast to basically becoming a capital fund raiser.  It's not uncommon to receive emails pitching the same deal to me while obscuring whats really going on.  

Thanks for the discussion.  Learned and clarified several things and confirmed my suspicions on some other things.    

Mostly marketing for the actual operator who also raises money from LPs.  I can figure out  who the actual operator is from their descriptions so I find it to be not aboveboard in what they are presenting. 

I guess why would anyone bother doing this rather just going direct with the operator unless the syndicator was providing some element of value add on either reduced fees or a bigger promote. 

I am a passive investor and only have participated in a handful of deals so my question might be uninformed or basic.  

Ive been pitched by various people calling themselves "syndicators" but I find their supposed deals are just repackaged deals from other true syndicators who actually acquire, manage and dispose the asset.     

Is there any reason to invest with these people rather than just investing directly through the real operator?  I find the way they present themselves to be disingenuous when they are really just middle men getting a cut of the GP shares to handle raising capital and investor relations. I also dont find any improvement in terms on the fees asssessed or on the waterfall promote on the backend? If anything I find that there are more fees assessed going through the PPMs.

Please educate me on why anyone would do this unless you were just informed.