How Do I Valuate a Motel?

[Joseph M.]

hi,

I am interested in buying a motel in a tourist destination but I am not sure that I am valuating it well.  I am interested because I think I can increase their income because there are so many obvious things that they are not doing. e.g online marketing, a website, social media, etc. 

Here are the numbers:

1. asking for 1.3m
2. Price per room 84k

3. CAP Rate 11%
4. Debt Coverage 2.3
5. NOI 158k
6. Gross for 2016 was 251k and occupancy was 36%, ADR 108 Rev PAR 39
7. Gross for 2015 was 199k and occupancy was 25%, ADR 122 Rev PAR 30

8. Gross for 2014 was 149k and occupancy was 24%, ADR 95 Rev PAR 23

I intend to run it myself (the seller has been managing it himself and is retiring and he is willing to train me as long it takes).

thanks