2005 Hotel Purchase 62 Room

[Mike Jacobson]

Investment Info:

Large multi-family (5+ units) fix & flip investment in Rochester.

Purchase price: $1,700,000
Cash invested: $1
Sale price: $4,300,000

Remember when you see a turtle on a fence post, he got help getting there!
We purchased a 62 room hotel in extreme distress. Valued relationships allowed us to get in with nothing down. Over the 12 years of ownership we put in around $1,000,000. Leveraged our family cabin for the initial money to remodel the hotel, $257,000. We are a turtle on a fence post! We had help getting here.

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

Partnership in a previous hotel gave us an understanding of the numbers.

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

I mentioned to a friend that we were looking for more cashflow. Apartment building etc. Then he brought us this deal.

How did you finance this deal?

Cash out refinance of our cabin.

How did you add value to the deal?

12 years of remodeling and serving guests at a high level.

What was the outcome?

12 years and 6 months in the business, 4 hotel of the year awards from Choice Hotels. 2008 to 2017 straight Platinum Awards. (Top 3% in the brand) We are now financially Free!

Lessons learned? Challenges?

It takes time and hard work. Follow leaders in the industry. When your in the trenches sometimes you don't see the equity that is building sell before you get burned out. Challenges: Building a team that understand how to really serve people.
It was a fun run.