Return on Investment and Investor Proposal for Small Hotel

[Leslie Beia]

Hi! I'm scaling into a commercial property and starting a boutique hotel. Currently, I'm looking at $2.5M all-in for building purchase, renovations, and business start up. My financial models are showing a roughly $250k net profit, so a 10% annualized return. I have a cousin who funds RE deals and he has a whole network of money people, so I am putting together a business plan to submit along with my financials and an investment proposal.

I am coming from single family residential, and have only ever worked with hard money for short-term loans, and also some smaller amounts of private money. I'm trying to wrap my head around working with investment capital long term, and there's also the potential for some seller financing from the building owners, and my cousin is on the board of a bank which could also come into play. This is a lot to consider! I'm curious what would be some different ways I could look at structuring the deal, and is the 10% return going to be attractive to people who invest in deals like this? Thanks!