Boutique Hotel on Country Club Plaza

[Logan Freeman]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $2,250,000

Cash invested: $55,000

This is the second boutique hotel on the Country Club Plaza. This is one of the most well-known bed and breakfasts in the city with a strong rental history and a top of the line brand and presence.

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

The riches are in the niches. This is our second hotel and actually were targeting this asset before our first purchase. We have the team to manage this asset class and the real estate alone was worth the purchase price.

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

Off of the MLS - I actually sourced this deal by simply getting on the phone and calling the listing agent. After digging in and receiving the financials, I knew I had a diamond that others were passing over. We sat down with the owners directly and negotiated it.

How did you finance this deal?

Community bank with owner financing.

How did you add value to the deal?

The property currently has 13 units.
However, there is an opportunity to add an additional 2 units.
Unit one: Originally a room that was converted into a common space.
There is ample common space, so the unit can be converted back fairly easily.
Unit two: This is storage in the garage of the carriage house. It can either be
expanded (sleeping more guests) or converted into a separate unit
depending on which direction supports the best economics.
The storage can be moved to the basement.

What was the outcome?

We have been operating for about 6 weeks.

Lessons learned? Challenges?

Syndications are not as "easy" as all of the books tout them to be. Working through the funding process needs to actually be a process and set beforehand. Also, give AMPLE time for your PPM and do NOT start your raise until you have it. Have backup investors. Have Plan B ready to go if (and when) Plan A doesn't pan out. Have extensions for your closings. Give enough time to work through operating agreements. Get on the phone with your investors attorneys. Hold a conference call to cover concerns