Investors Were Paying for His Cabo Trips
In this monologue, Bob Fraser describes a private land‑development investment that promised investors a 20% return. The deal’s structure allowed the operator to bill any and all business expenses—staff salaries, office costs, marketing, due‑diligence, and even personal travel such as all‑expenses‑paid trips to Cabo or Cancún—to the investors before any profit distribution. Because there were no caps on these expenses, the operator could essentially fund a lavish lifestyle with investor money, turning the investment into a venture‑capital‑style arrangement where investors pay to run the operator’s business. Fraser highlights the misaligned incentives, the risk of the “first 20%” being consumed by expenses, and warns that such expense‑allocation loopholes are a major red flag for due‑diligence.
