I am located in Mexico and have 2 vacation rental properties that I have a acquired through long term leases that I have then turned around and rented short term with the owners permission. The profit has been phenomenal and I would like to expand. My expenses when acquiring new properties consist of the deposit and furnishings, which usually only take about 6 months to get back. I have proven the concept and would now like to set up a business name, website, etc.
My question is this: What is the best way to borrow money so that I can expand more quickly? I have many people interested in the business and would give me money but I want to make sure I am not giving the farm away. Any advice would be greatly appreciated.
Instead of borrowing money, borrow the property!
I would look into owners who are willing to lend you the property on a variable part (you will need to look at the economics of the deal to ensure their upside is bigger than the flat monthly payments). It also has the benefit of lowering the risk of getting a property with a lower return on investment
Many ideas come to mind.
You might book some calls with people you follow on Clarity, to flesh some of these out better.
Start a Kickstarter project with high dollar perks of some number of weeks.
Setup a travel site about how to enjoy your particular part of Mexico (sites, activities, seasonal fruit, festivals) + buy traffic from Outbrain + Taboola to your travel site. Then sell your services as a broker to book lodgings. You will first book out your properties, then charge a fee to other property owners to book out their properties.
There are many spins on the above idea.
For example, cut deals with some City's Chamber of Commerce to do an export seminar, where you charge $5K-$10+ for a 30 day excursion for people to come + learn about products they can import from your area.
Now that I think about it, I did created a set of recordings... geez... must of been nearly 10 years of first one, about generating cashflows in other countries. If this might interest you, PM me + I'll try to find these recordings + resources.
This is a super interesting business, probably listing your properties in Airbnb you can get high quality (high paying) customers.
On the raising for the business itself, I would do a mix of a loan + share of benefits. For example you get X on a 5% interest a year, and if the property makes more than 50% profits over ROA then you give a Y%. This way you make it safe for the people that are investing (with a sure return) plus a nice bonus if everything goes well. If things go bad, then you know the max you might pay is X * (1+5%) which you can diversify between several properties.
This is just an idea, and a way to get the people that give you the money a good deal. Remember that the important part is that everyone is happy, if not, on a model like yours which is low in capital investment, but high in need for cash flow will have limited growth without future investors.