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International Buyers can also purchase a Hotel or MotelThe stability of foreign investments in U.S. properties combined ...
04/11/2019

International Buyers can also purchase a Hotel or Motel

The stability of foreign investments in U.S. properties combined with gorgeous weather and International flavor, make Florida the number one choice for many Foreign Investors.

Viewpoint Commercial Realty has considerable experience working with individuals from many countries as they make plans to immigrate to our country. Working with Foreign Investors has become a major part of our real estate business.

We collaborate with local Immigration Attorneys who possess an in-depth knowledge of the Immigration process and can recommend which of the following Visas will be the most appropriate for you to meet your objective of purchasing a Hotel or Motel in Florida.

Different types of Visas: Green Card, Entrepreneurial Program, Regional Center, Temporary Nonimmigrant Visas, Tourist/Business Visitor (B-1/B-2), Treaty Trader/Investor (E-1/E-2), Educational/Training Visas (H-2A /H-2B), etc.

The Attorney will take you through the entire process.

Valuing a Motel:Collectively, the lodging business is worth more than $500 billion, and motels comprise a healthy portio...
04/11/2019

Valuing a Motel:

Collectively, the lodging business is worth more than $500 billion, and motels comprise a healthy portion of this by capturing the frugal traveler demographic.

What this business venture lacks in glamour it makes up for in profitability.

Motels are up against many unique operational roadblocks that other lodging options don’t have to contend with. Chief among these challenges is providing customers with a hospitable stay on a shoestring budget.

Here are some Rules of Thumb for valuing Motels:

* 2.25-3,5 times annual sales, up to 5 times for resort properties

* 10-12.5 percent Cap Rate

* Location, age, structure, franchise or independent effect value

Limited service operating expenses - 50-65% of Gross Revenue

Questions to ask Seller:

Is there a "Punch List"? (corrections/updates)

Any new highway or road closures nearby?

Review any contracts with the Franchisor?

Age of the equipment?

Here are some "Rules of Thumb" in valuing a Hotel:Independent older exterior corridor properties are frequently are pric...
04/11/2019

Here are some "Rules of Thumb" in valuing a Hotel:

Independent older exterior corridor properties are frequently are priced at 1.5-2 times annual room revenue. Moderate level Franchises 30-70 rooms 2-3 times room revenue. Larger, well known, franchise properties with 70+ rooms 4-5 times room revenue. (Beach properties typically go for 3.5 to 5 times total sales)

Hotels should be priced only after taking into consideration the (FF&E) furniture, fixtures and equipment reserve of 4 to 5 percent of gross revenue. Plus add an allowance for repair and maintenance for a total of 8-9% of total sales.

Whether or not the property is an extended-stay business hotel or resort will also affect value.

Anticipate third-party financing of 60-70 percent of the purchase price and a debt coverage ratio of 1.25-1.5 Some banks will lend based upon ADR and Occupancy and others will lend on some base times gross revenue factor.

The trend is toward Limited Service, manageable properties under 80 rooms. They are able to be Owner Operated with limited staff. Also, changes in the economy do not affect these properties as readily. The economy segment is projected to achieve the highest increases in value.

Tip: Many properties turn a mediocre profit. The appreciation in property value is usually the benefit. Many buy a property, maintain it for 3-5 years and then sell.

Final Note: Nice economy franchises are in demand as well as independent properties. There is less need for a pool and restaurant on site. Most people are busy and just need a clean place to lay their heads and then be on their way.

Address

Clearwater, FL
33756

Telephone

(813) 843-7193

Website

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