This week in our “Meet the Founder” series we sat down with Doug Cerson, Founder and Chairman of Sentry Group, the company behind SG REOT (Sentry Group Real Estate Opportunity Trust). We were keen to learn more about Doug’s plan to build 500 homes in 5 years, backed by 500 investors. Check it out!
What was the inspiration behind SG REOT?
Low priced land in parts of Ontario which have a surplus of jobs. People move to where the jobs are. Plus it's the “Grey and Grey” decade ahead. Our locations and home designs appeal to all categories of home buyers. Those relocating for jobs, recreational or lake living, retirement at a reasonable price. Our properties suit all the above, plus our homes are built to be sustainable, smart and healthy.
Tell us a bit about your background in the industry.
I started in 1992 as a Financial Planner and quickly moved to achieve my professional designations and then into management. My team has managed assets for investors exceeding $200M over the last 25 years. When 2008 hit our economy hard, I worked with private equity groups looking to capitalize on real estate, mainly in the southern states and a few choice locations in Canada. During this time I had the privilege of conducting Due Diligence on over 100 projects which also allowed me to look under the hood and behind the scenes of not only the project, but the management team.
What’s been the most surprising thing about founding SG REOT?
Validation - we believed we had the right properties, especially those along the great lakes. But we thought we would have to explain “sustainable building” to our investors - more people want a smart, healthy and green home than we first anticipated.
And the most challenging?
Time - the time it takes to put an offering together seemed unreasonable as each day passed. We wanted to ensure our offering had as many investor protections in place as possible. Assembling a structure which keeps investors’ best interests and representation by 3 Independent Trustees takes time and resources.
What do you do when you’re not at work?
Anything outside. I own a couple acres on a river just outside of the city which is connected to 200 km of trails. Whether I am on one of my 4 bikes or taking friends out kayaking - I need to be outside as much as possible.
Had you tried to raise money before using FrontFundr?
Yes. We have raised funds across Canada for various projects using traditional platforms and private individuals. We wanted to make a move to a more modern approach to doing business, mainly eliminating sales people from the process. This is a securities transaction and we know how important it is for people to understand the transaction process, they don’t need the pressure of commissioned sales people.
How did it go?
We have been successful in the past raising funds, but as noted above it did not come without other challenges. It was also nearly 3x the cost to business and that comes straight out of investors’ returns.
Why are you now running a crowdfunding campaign?
Our SG REOT will build out over 500 homes during the next 5 years. That means we need more than a few investors. We also need 500 people to buy these homes. Every investor in our SG REOT has the first right to buy a lot or home at the release price ahead of any public (MLS) listing. Bottom line - we need lots of people to see our business model!
Due Diligence. My career has been focused mainly on roles where our team is consulting on Private Investments. There are other “Portals” - this is the one that we choose based on our research and it meets our business needs.
What do you hope to achieve as a result of your campaign?
500 Investors and maybe 500 home purchasers!
Where do you see SG REOT in 5 years’ time?
Our business plan and the SG REOT offering has a 5 to 7 year hold period. In 5 years we will have returned our investors the majority of their funds at risk along with substantial profit sharing. We hope to still be delivering additional profit distributions to our investors. By this time we also will have created SG REOT #2.
SG REOT’s campaign is now live on FrontFundr. Head over to their campaign page for all the details!