Oil Investing Update – 20% Return in 90 Days – Principal Guaranteed
For those of you who’ve been following my blog, you know I’ve been working on some secretive deal regarding some oil deal. Well now its that time in the process when the rubber hits the road. The bank we’ve been dealing with has agreed to lend us $20 million. However, we need to show up in person in Connecticut pretty soon and deposit $200,000 with their attorney. The deposit is to make sure we don’t waste their time and money and then decide to go with a cheaper lender. Anyway, we’re going to be borrowing the money from private investors at a generous rate. Here’s the official spiel.
20% Return in 90 Days – Principal Guaranteed
We are in the process of closing on a $20M loan for a large oil and natural gas investment opportunity. We need $200,000 to be used as deposit to ensure that we will not go with another lender. This is a no-risk loan as the funds will never be used and will only sit in an escrow account during the entire closing process (this is the reason we can guarantee the principal back in case the project does not fund).
The full principal will be paid back within 45 days in case the loan does not get funded. For all purposes, we are 99% certain the loan will fund as all of the documentation and due diligence work has been provided and completed. The only remaining steps before closing are a face-to-face meeting with the lender and a site inspection visit of the mineral lease location. We are offering a 20% return over 90 days (80% annualized return) with full payout when the project gets funded. The minimum investment amount is $25,000.
If you’re interested, shoot me an email but more importantly wish us luck!
Incidentally, several people asked me how I came across this deal and what due diligence I did.
The short version is that it included being in the right place in the right time, asking a lot people a lot of stupid questions, flying out to the middle of freaking nowhere to look at a stupid oil pump & recognising that when commodity brokers and lenders are salivating at the prospect of giving a $20 million non-recourse loan, its probably a good deal.
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March 9th, 2006 at 7:19 am
How much are you and your partners hoping to make out of this deal? What are your downside? Are you looking at potential buyers to flip this to also?
Come on!
.. good luck.
March 10th, 2006 at 4:48 pm
WOW good luck… But an oil plant? Why not like entanol fuels? Wouldn’t that be booming right now?
Like an emerging market?
March 12th, 2006 at 11:29 am
basically there’s a LOT of oil down there. The lender has said they’ll lend up to $70 million based on the reserves. If we flip this it’ll be at a discounted present cashflow value so it’ll be in the mid-9 digits!!!!
We’re going to meet the lender this week in Stamford, CT to talk about the terms of the loan. Our loan broker says the loan is a done deal – all we need to agree on the terms. lets see if thats true.
don’t think plant fuels will help out. once plants are used as a replacement for expensive oil, their price will spike causing food to become more expensive!
March 13th, 2006 at 4:53 pm
I really do wish you the best of luck! Need a $100 investor?
March 15th, 2006 at 9:58 am
Kirby
How would you go about doing “due diligence” on an investment like this? There’s no physical security, just the promissory note, and the “promise” of the partners.
March 15th, 2006 at 12:34 pm
actually the money will be held in the lender’s escrow account. [you can wire the money into there and it can be released from there too].
once we get funding, if we decide not to pay you the promised interest, you can sue the company for its assets[which should be substantial, otherwise the lender would be lending us any money, right?]
March 15th, 2006 at 4:52 pm
Man… Who said there was oil? A third party? Is that third party hired and held liable if there isn’t?
I dont know all the details so from my point of view it looks risky
Wish you a lot of luck