Scaling from STRs to Boutique Hotels... (+80 STR doors in 1 year)

[Diya L.]

Hi Everyone, 
We bought 3 hotels & motels this year and are quickly ramping up to buy more hotels in this upcoming recession. I started in real estate with househacking (renting rooms in my house out as STR/MTR), then quickly bought 9 STRs without partners (I was an attorney at the time, so used mostly conventional financing), then quit my job to focus on real estate investing full time.

After doing a few creative STR deals (BRRRR STR, wrapped note reselling of STR, etc.) I decided to focus on hotel investing.

We plan on applying the BRRRR strategy to hotel deals, pushing the valuation of hotel deals higher with operating them better (unlike with residential real estate, the hotel valuations is tied to financial performance). 

Most recently, we were able to pull off this deal:
Bought: 48 Keys, $750K acquisition 

Rehab/FF&E: $500K 
Refinancing Appraisal: $2 Mil 
[Bonus Equity Gain: $750K] 
This is without 1 year financials yet, and we have pushed the ADR from $79-89 range to over $200+ during peak season with the renovated rooms. 

We will be using the refinancing to do more improvements to the hotel and push for a $3 mil valuation in a year or two, once we have more financial data. 

BEFORE/DURING: 

AFTER: (these are cellphone pics - we did get pro ones but I'm not 100% happy with them yet!)

There are SO many lessons learned... I've visited north of 50 hotels, underwritten at least 200-300 if not more, and made offers on about 2 dozen of these deals. We tend to be very conservative with our underwriting (assuming higher exit CAP, higher exit interest rate, market average performance even though our track record has been always outperforming market, etc.).

Here are some of the photos of us looking at hotel deals over the last 2 years...