Off Market Motel Deal

[Dylan Domingue]

I am looking for some insight on how to tackle an off market deal. I have a 22 Unit Motel that the owners are "sick" of an I am looking to go at them to see if they are interested in selling the property. They are older and tired of the up keep. If anyone would be willing to mentor me/ give me there input through this process I would greatly appreciate it. I currently own a 4 unit building that is doing very well and my family is involved with a commercial flooring company. How exactly do I go at them to convince them to sell/go owner financed? Structure of the deal? Thanks

[Don Konipol]

@Dylan Domingue

First things first

Most 22 unit motels are management intensive as the revenue is too small to afford a top manager or a hotel operator. So in order to show a profit the owner needs to be heavily involved. In other words this is not a passive investment; motels need management and a small motel doesn’t afford the ability to pay for the type of management where the owner can play the role of passive investor.

It sounds like you don’t really know if the owners are motivated to sell or not. Plenty of people SAY their sick and tired of their investment or business but wouldn’t dream of selling and changing their life.

I think your best bet is to ask to meet them informally. Tell them of your interest in purchasing their motel, and if they’re interested in selling then ask what price they’d consider. When and if you get to an acceptable price, you can make a written offer that includes owner financing. You’ll want to give them a chance to respond and consider the offer; if they seem amiable to carry back financing then you can proceed with more specifics.