Purchasing Newly Renovated 20-door motel to turn into Sober Living thru owner finance

[Katrina Dividina]

Hi, 

I have 4 SFH and a 4plex doing LTR and MTRS in New Mexico, now, I have the opportunity to talk with a motel owner who is willing to do owner financing. His motel has been shut down since COVID-19 for not being up to code, now, he has renovated it and water/electricity is running. He is asking for 800k, 25% DP, and 9% interest which I think is ridiculous for owner financing. I am a nurse and I have an addiction MD partner planning to turn this 20-door motel into nonprofit sober living which the area is in desperate need of. Medicaid will pay for each client/tenant.

I tried to call several appraisers but 2 of them who responded refused to do valuation. Its hard to find appraisers to service this area. They usually have to travel 2.5 hours.

My questions are:

1.) Does it have to be specifically a hospitality appraiser or can just a commercial appraiser do it? One of the appraiser has been asking for rent rolls but the motel has been shut down since covid. 

2.) What documentation do I have to do during this 1st part of my acquisition before I do my whole due diligence? Letter of intent to the owner? 

Can someone tell me the step-by-step? My partner is a member of Andersons Advisors, I just want to have an Idea of how can we work around this deal.

Thank You

Katrina