How to price out a Lodge for purchase?

[Hans C Hormann]

Hello All,

My wife and I are try to decipher if a property could be a gold mine.  There has been a lodge / small hotel that has 10 rooms for sale for about 2 years for a ridiculous price. Now the owner has dropped it closer to a reasonable price and there might be a possibility of owner financing. That being said we are trying to study the deal to see if it makes sense and/or gain experience by analyzing this deal. We own/manage 3 cabins in the area and I am a realtor but have only really done residential sales. I have done some research and there are not books as the property has basically been a private family getaway for the past 20 years so it stopped function as a lodge back in the 90's. The property itself is in good shape. I spoke with our county and they have no current permits on the property as a lodge due to that face that its been around since the 1920's and I dont think the county was hassling with permits for this area in the 1990's. Now we would have to go get a special use permit and probably some other environmental permits to get the kitchen re certified. Our initial thoughts was to update some of the property to have more amenities to add to the guest experience and to offer it as a wedding venue. We would not want to open the old restaurant but contract with local catering companies to run the bar and food during special events and also offer corporate retreats. So far we had one person that we spoke with us give us some hypothetical numbers but I want to get possibly some other 2nd opinions before we start to think about making an offer. Thanks for any thoughts or Ideas.