Case 5 · real-estate investment abroad

Getting an investment out of a dead-end real-estate project in a foreign country

Real story
A real deal, real people, real numbers. Only the names are hidden.
The question

Out of money before construction, and everyone looking at him

An investor (I was his adviser) had put money into a real-estate project in a foreign country, and he was stuck. The project ran out of money before construction had even started.

All the other investors said they had no resources to put in more and couldn't bring in money from anywhere else. So they all looked at him to add money.

Trust was gone, and he didn't want to keep pouring money into the project. He also didn't see any way to get his money out. And it was a foreign country: he didn't speak the language, had no business contacts to ask for advice, and couldn't trust anyone.

His question was simple: how do I get out of this?

OTHER INVESTORS "no more money" "you add money" the investor I advised Out of money before construction began
What was really going on

Not even a small cash flow was possible

I went there and met the management and the investors.

I wanted to find out whether we could set up even a small cash flow to stop the money burning, for example by renting out the buildings that already existed.

It wasn't possible.

THE FIRST IDEA existing buildings rent out small cash flow no success no way to stop the money burning
What we did

Turn his shares into a secured loan

I proposed restructuring his investment into a loan, with an above-average interest rate and other assets pledged as a guarantee. In exchange, he gave his shares back to the company, so the other investors could bring in new partners and give the project a fresh start.

THE NEW DEAL The investor before: a shareholder after: a lender The company gets the shares back free to find new partners his shares go back to the company so it can bring in new partners and a fresh start a loan at an above-average interest rate guaranteed by other assets
What I did myself
  1. The structureStructured the deal.
  2. The lawyersHired the lawyers.
  3. The guaranteeChecked the assets offered as the guarantee.
  4. Everything elseHandled the rest of the deal.

None of that is a big deal on its own. It becomes one in a country where you don't know how deals like this work and can barely trust anyone.

The result

It worked. The loan was repaid in full, with interest.

4 years
to repay the loan
In full
the whole investment came back
+ interest
at an above-average rate

He got out of a project he saw no way out of, and his money came back with interest.

Case 5 · real-estate investment abroad

Getting an investment out of a dead-end real-estate project in a foreign country

Real story
A real deal, real people, real numbers. Only the names are hidden.
The question

Out of money before construction, and everyone looking at him

An investor (I was his adviser) had put money into a real-estate project in a foreign country, and he was stuck. The project ran out of money before construction had even started.

All the other investors said they had no resources to put in more and couldn't bring in money from anywhere else. So they all looked at him to add money.

OTHER INVESTORS "no more money" "you add money" the investor I advised Out of money before construction began

Trust was gone, and he didn't want to keep pouring money into the project. He also didn't see any way to get his money out. And it was a foreign country: he didn't speak the language, had no business contacts to ask for advice, and couldn't trust anyone.

His question was simple: how do I get out of this?

What was really going on

Not even a small cash flow was possible

I went there and met the management and the investors.

I wanted to find out whether we could set up even a small cash flow to stop the money burning, for example by renting out the buildings that already existed.

THE FIRST IDEA existing buildings rent out small cash flow no success no way to stop the money burning

It wasn't possible.

What we did

Turn his shares into a secured loan

I proposed restructuring his investment into a loan, with an above-average interest rate and other assets pledged as a guarantee. In exchange, he gave his shares back to the company, so the other investors could bring in new partners and give the project a fresh start.

THE NEW DEAL The investor before: a shareholder after: a lender his shares goback to thecompany so it can bring innew partners a loan at anabove-averageinterest rate guaranteed byother assets The company gets the shares back free to find new partners
What I did myself
  1. The structureStructured the deal.
  2. The lawyersHired the lawyers.
  3. The guaranteeChecked the assets offered as the guarantee.
  4. Everything elseHandled the rest of the deal.

None of that is a big deal on its own. It becomes one in a country where you don't know how deals like this work and can barely trust anyone.

The result

It worked. The loan was repaid in full, with interest.

4 yrs
to repay the loan
In full
the whole investment came back
+ interest
at an above-average rate

He got out of a project he saw no way out of, and his money came back with interest.