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Updated about 1 year ago on . Most recent reply
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- Rental Property Investor
- Spring Valley, NY (spring valley ny)
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- 56
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Buying a motel at a sheriff's auction
I'm trying to figure out if it makes sense to buy the following property. It's a 2 star motel in a midsize city in the Midwest with more than 100 rooms on over 2 acres of land. It's being sold at a sheriff's auction and the current highest bid is about 3k per room. The owner also owes about 2k per room in back taxes. For an all in of about 5-6k per room I can acquire an operating motel. The downsides are It's a very mediocre motel and leaves alot of room for improvement, it's next to 2 other 2 star motels that are part of national flags that have much better reputations, and most importantly it's a sheriff's auction so it's very hard to get any info on it (P&L, past performance, any other financials). Is it worth going into such a deal due to the low cost of acquisition and upside.
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- Attorney
- Dallas, TX
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What other motels have you owned in the past? If you're not budgeting for major plumbing, electrical, renovations and other six figure costs, then you're taking a huge gamble.