Taking the leap from limited partnership to general partnership in a hotel investment deal involves more risk but leads to higher rewards in the long run. And talking about the lessons learned along the way is a valuable way to spread the message of hotel ownership.
On this episode of the Next Gen in Lodging podcast, host Davonne Reaves gets hotel owners Acquania Escarne and Amina James, Ed.D., to open up about the highs and lows of their hotel investment journeys from limited partners to general partners.
Escarne and James formed the AJA Investments platform with three other general partners: James' husband Norland James; and Richard and Janelle Howard. AJA Investments bought the 120-key Wyndham Lake Charles in Lake Charles, Louisiana, earlier this year in a deal Reaves called “historical.”
“You are literally changing the face of how deals can be done,” she said, referring to the fact that AJA’s principals are Black owners and three out of the five are women. The hotel is operated by a Black-owned management company. The deal was facilitated by a Black female broker, the vast majority of the project’s investors are Black, and funds were raised on Reaves’ own Vesterr crowdfunding platform.
Escarne, James and their partners worked with Wyndham’s BOLD (Black Owners & Lodging Developers) program to help advance the deal, but it was their own personal experiences as hotel investors that propelled them into the general partnership seat.
James and her husband, Norland, founded Duke Ventures and invested in their first hotel deal as limited partners in 2019, but it wasn’t all smooth sailing.
“The deal ended up not going through, we lost our investment money, and from then on we decided to learn everything we could about hotel investing and ownership,” James said.
They got involved in some hotel projects as passive investors, then purchased the Quality Inn Memphis Northeast as general partners in January 2023.
Escarne founded her real estate investment company, RRD Investments, in 2015 to focus on local real estate investments, primarily residential, along with financial literacy for people of color and low-income communities.
They came together with their partners in AJA in part because they recognized one another’s strengths.
“I am Acquania, a.k.a. 'Moneybags,' because I have a large network and I like to raise money, I like to talk about money, I like to find money,” Escarne said. “And Amina is a natural-born leader, a.k.a. 'The Captain,' because she and [her husband] had already been GPs, they had a leg up on being able to understand what was normal or not normal … so we could financially prepare our purse strings. And Janelle [and her husband] are really good on logistics and admin support, offering a second opinion or different perspective.”
The group’s strong personal bonds and faith connection helped them through all of the critical go or no-go points, Escarne said.
“We can talk about the deal, and then talk about what our kids are going to do on the weekend,” she said.
Both underscored the lessons learned by participating first as passive hotel investors.
“People try to skip that step because they’re just so excited about the sexiness of being a hotel owner, but they need to focus on the foundation, learning, getting to know people, what to look for and what not to look for,” Escarne said.
And never underestimate the power of the network.
Both said they followed hotel investors and owners on social media from the start, to pick up on ideas and trends and meet like-minded investors. And they recognize the value of education.
Escarne hosts webinars and other social education outreach via her wealth strategy platform, The Purpose of Money.
"So many of our investors are first-time investors, and they don't understand how hotel investing works, how dividends work, how long their money will be tied up," she said. "These are questions people don't know to ask and they've never even considered, so they're not going to give you their savings on something that doesn't make sense to them."
For more from Reaves, Escarne and James, listen to the full podcast at the link above.
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