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Updated about 1 year ago, 11/30/2023

User Stats

6
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2
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Lindsey Ambrose
Pro Member
2
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6
Posts

Hotel/ Motel Investment

Lindsey Ambrose
Pro Member
Posted

Hello! My business partner and I are considering investing in a 24 room inn/motel that is for sale in our area - this is our first property outside of apartment buildings, so I am hoping to find someone with expertise in the hotel business that could help give me some insight. Is anyone out there familiar? It will just take a few minutes of your time and would be so, so appreciated!

  • Lindsey Ambrose
  • User Stats

    17
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    Replied
    Quote from @Cliff Benner:

    @Mark Zajaczkowski Congrats on building it up! Hoping that you are selling to move on to bigger and better! That was an awesome strategy!


    Thank you! It has not been an easy decision and I know motels don't typically sell fast (We might be in for a haul, but I think our price will be very competitive especially for Colorado). We've definitely improved the property and business-My wife started her own business 2 years ago and I want to help her when I can and hopefully invest in more Real Estate where we live and maybe a 2nd home/rental somewhere warm

    User Stats

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    Replied

    @Mark Zajaczkowski We just came across a 39 room motel in my market. How long it took you to turn around the motel? Was it a difficult process? I’m a single family investor/Landlord not a motel investor. We’re considering flipping it after turn around. 

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    User Stats

    21
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    7
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    Norm Kopesky
    • Investor
    • Neenah, WI
    7
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    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    Replied
    Quote from @Tim Debronsky:

    @Mark Zajaczkowski We just came across a 39 room motel in my market. How long it took you to turn around the motel? Was it a difficult process? I’m a single family investor/Landlord not a motel investor. We’re considering flipping it after turn around. 


     standard disclaimers, market, occupancy, staffing, property condition blah blah blah..

    It takes us about 3 months to scrape out the bad tenants, get a quick tune up and be cash flow positive. once winter hits here in Wisconsin we go through another round of evictions. (10%) a month till we have it truly stabilized... as those units come vacant we upgrade those to the next level of quality. this will always be a class c property though...

    User Stats

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    Thanks! @Norm Kopesky After you stabilize do they cash flow very well? Is a 50% occupancy a conservative number to use for our pro-forma?

    User Stats

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    Norm Kopesky
    • Investor
    • Neenah, WI
    7
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    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    Replied
    Quote from @Tim Debronsky:

    Thanks! @Norm Kopesky After you stabilize do they cash flow very well? Is a 50% occupancy a conservative number to use for our pro-forma?

    The national average for occupancy is about 47% if memory serves, again tons of variables. 

    User Stats

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    Thanks again @Norm Kopesky!

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    Calvin Ozanick
    Agent
    Property Manager
    Pro Member
    • Property Manager
    • Janesville, WI
    293
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    696
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    Calvin Ozanick
    Agent
    Property Manager
    Pro Member
    • Property Manager
    • Janesville, WI
    Replied
    Quote from @Brandon Thurman:
    Quote from @Norm Kopesky:

    looking to restart the thread and get an update from the different members. 
    I currently own 4 motels in Wisconsin 

    1 under contract 

    2 in negotiations

    Hoping to connect with you, Norm. Looking to acquire our first motel soon.

    I would love to connect with the both of you. We operate out of Janesville, WI, but have connections in most of south central Wisconsin! 
    • Calvin Ozanick
    business profile image
    Wisconsin Property Managers
    4.7 stars
    278 Reviews

    User Stats

    110
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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    110
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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    Replied

    midwest moteliers unite!! I have a motel in Menominee Michigan, base of the UP. And I have one in Western Colorado that's a bit bigger. Finding labor and talent is the hardest part of this biz. But it's great cashflow and worth the headache most of the time. @Norm Kopesky where in Wisco are you? 

    User Stats

    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    7
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    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    Replied

    HQ is Appleton, where we have our largest at 31units

    Omro 24 units

    Necedah 22 units

    Racine 22 units

    Oshkosh 12 units

    Talent is an issue for us as well, I’d like to sell the Racine location just because it’s the furthest from home for us. 

    User Stats

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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    110
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    110
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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    Replied

    That's awesome, I have a 8 unit in Menominee MI and a 23 unit in Fruita Colorado, and just bought a 108 site RV park in southwest Michigan. I was actually looking for another motel when I found this mis labeled RV park for a good deal! Do you have onsite managers at each of your properties ?

    User Stats

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    Elizabeth Connelly
    Pro Member
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    Elizabeth Connelly
    Pro Member
    Replied

    This is all great info @Norm Kopesky and @Jonathan Mueller and @Mark Zajaczkowski. I'm just getting the motel bug recently. How to do estimate utilities for pro forma? I'm a data nerd so I try to be tight and very conservative with my numbers. Do you estimate per unit or just overall size of the property?

    It's my first commercial attempt so I'm hitting hurdles I don't have on the residential side finding tax info and such.

  • Elizabeth Connelly
  • User Stats

    21
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    7
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    Norm Kopesky
    • Investor
    • Neenah, WI
    7
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    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    Replied
    Quote from @Jonathan Mueller:

    That's awesome, I have a 8 unit in Menominee MI and a 23 unit in Fruita Colorado, and just bought a 108 site RV park in southwest Michigan. I was actually looking for another motel when I found this mis labeled RV park for a good deal! Do you have onsite managers at each of your properties ?

    I do have onsite managers, that is the key position to the whole project. 
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    User Stats

    21
    Posts
    7
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    Norm Kopesky
    • Investor
    • Neenah, WI
    7
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    21
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    Norm Kopesky
    • Investor
    • Neenah, WI
    Replied
    Quote from @Elizabeth Connelly:

    This is all great info @Norm Kopesky and @Jonathan Mueller and @Mark Zajaczkowski. I'm just getting the motel bug recently. How to do estimate utilities for pro forma? I'm a data nerd so I try to be tight and very conservative with my numbers. Do you estimate per unit or just overall size of the property?

    It's my first commercial attempt so I'm hitting hurdles I don't have on the residential side finding tax info and such.

    I would be requesting actual copies of all docs from the seller, (seller pro formas are dog crap) we have averaged 46-47% expenses at full occupancy, across 5 properties. 
    Depending on region, heat and AC are our biggest expenses by far. Old buildings…
    we are functionally running these places as efficiency apartments to dollar tree tenants. High risk, you have to stay on top of it, we also have not found any third party management that’s interested in hiring on…

    User Stats

    110
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    110
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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    110
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    110
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    Jonathan Mueller
    • Real Estate Agent
    • Park City, UT
    Replied

    I agree with @Norm Kopesky, get docs and past utilities from the seller or get permission from the seller to contact utility company. This is one of our biggest expenses, without info from the past, it's really hard to come up with a number for utilities.