Experience Is the Name of the Game

“You’re living in a movie, Dad,” my daughter tells me as we watch together and I predict the next move in Suits, the hit American series that recently topped three billion weekly viewing hours for seven weeks straight.

Slowly she realizes that the plot only “develops” once someone leaves safe harbor, decides to trust luck, takes a “calculated” risk and hopes it all works out…

Not long ago a hot deal landed on my desk from a receiver: a boutique hotel on the island of Zanzibar at a very attractive price. After verifying the figures, cross-checking the information, a Zoom call with the receiver and drafting a term sheet, I sent a confidential email with the offer to my list of 41 investors.

Everyone on that list knows that emails from this address are hot, attractive and first come, first served. Anyone who checks their email only now and then can miss out on great investment opportunities…

This time the reply came from one of our active clients, a boutique real-estate developer whose projects the office handles, and he announced: the hotel deal interests me, let’s move it forward.

Are you sure? I asked. Your expertise is finding, buying, planning value-add, renovating and selling. Why get into an operating business in a field where you have no experience?

The client told me his wife had always dreamed of a hotel in her name in Zanzibar, and on their honeymoon on the island 17 years ago he promised her that her dream would come true.

We went over the details of the deal and I started representing my client in a new transaction.

After another update call and the first documents, we set up a joint Zoom call with the interim liquidator. The call went well and the client put forward his proposed structure for buying the hotel. After some back and forth between him and the liquidator they reached an understanding, and I asked to see a few more documents before we submitted a formal written offer to the court.

Because the company that owned the hotel didn’t own the land, I asked to see the lease agreement. The agreement was slow to arrive, and every day the client called and asked me to just send the liquidator the written offer already.

What’s the rush? I asked.

In two weeks my wife and I celebrate our 18th anniversary, and I want to give her the hotel as a present.

The client has his wishes; the liquidator has his own pace…

Friday, 3 p.m. I’m buried in my office preparing a capital-raising presentation for a meeting at the lending bank in Romania on a residential project, and I hear knocking at the door.

My client had come about the Zanzibar hotel, and right there in the doorway he told me off: I was killing his deal, and because of me he would lose the chance to make his wife’s dream come true.

We went in, sat down, and I explained that I wanted to see the termination terms of the lease before we sent an offer, because there was a risk he would win the hotel but be unable to actually take it over because of the landowner.

“Yes, but I’m buying from the liquidator,” he repeated. “I’m supposed to get it free of debts.”

I explained again, and we agreed that I would respect his decision to go against my advice once he instructed me to do so by replying to the email in which I had set out the risks.

We kept up the pressure on the interim liquidator, and a week later the lease agreement arrived.

“Do you understand what this agreement says?” I asked him.

The agreement included a clause giving the landowner the right to terminate it if the rent wasn’t paid on time (and in this case it hadn’t been paid for more than a year). “I insist that the offer include a commitment from the liquidator to obtain the owner’s consent to continue the lease,” I said.

That same day the offer was submitted, with the clause I had drafted on continuing the lease.

A week later the interim liquidator called me: the landowner was not willing to commit to continuing the lease. I made it clear to the liquidator that for us this was a “deal breaker”, and without that consent we would withdraw our offer.

And the client flew to Zanzibar to celebrate his anniversary with his wife.

Not before texting me: “Thank you for protecting me in this deal. I’m not giving up. Find me a hotel in Zanzibar.”

In this deal too, the grey hairs proved that professional experience, intuition and staying true to myself are my compass. Shortcuts and luck are for Netflix ratings.