20-unit hotel in TX

[Matt Barge]

Investment Info:

Other buy & hold investment.

Purchase price: $275,000
Cash invested: $129,000

20-unit hotel, was abandoned and had sat on the market for 3 years. Highway hotel on busy 35 highway. 19 hotel rooms plus owners apartment, large laundry room with commercial washer and dryer, large parking lot, front desk, lobby, roadside sign. Bought for $275k, seller finance, renovated $135k. Renovated in 1 month. Currently operating and cashflowing, listed for sale

What made you interested in investing in this type of deal?

Underpriced, underperforming, value add, 20 units, cash flow potential, low risk

How did you find this deal and how did you negotiate it?

Loopnet, seller financing

How did you finance this deal?

Seller financing

How did you add value to the deal?

Renovation, operational infrastructure

What was the outcome?

Hotel is open, we had a grand opening, we've been doing good and cash flowing. We got one offer late last year, still listed for sale but content to keep operating and cash flowing

Lessons learned? Challenges?

One challenge was getting the hotel occupancy up after renovation since no one had booked or stayed in years so there was no existing guest base. Once we lowered the price to $1 less than everyone in town we filled right up. The other challenge is selling it, there is a smaller buyer pool for hospitality in a small market but that was known going in

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Scott Hogg with Coldwell Banker