All Forum Posts by: Alexis Morleand

Sorry for the late response here. I've had a hard time getting my emailed verified and it stopped me from responding. 

Thanks Ken. The project is slated to be $56 million in total, 96 rooms, FEC on 3rd floor, 17 residential units and 7 Commercial lease units on upper floors.

After posting this however, I discovered the issue.  I wasn’t given the complete feasibility report and proforma breakdown to begin with, which is the main source of my inability to cash flow the investment correctly. After getting the complete feasibility report and comparing with trend report numbers, the deal does cash flow for me based on all data given. 

With that being said, the additional question I had on this was..when dealing with deals of this size, what would you consider most important? Equity, Cash Flow, Cash on Cash Return? 

Thanks 

Thanks Greg. I’ll be reaching out shortly 

Hello Everyone,

Hoping to gain some insight and additional knowledge with this post.

I'm currently in the process of my due diligence on a New Construction Commercial Hotel Project that was brought to me.

I've been provided the Feasibility Report which includes a 5 year Proforma, Project Construction Cost Breakdown and I've also been provided a Trend Report for the previous 5 years as well. Trend report uses comparisons of other Hotel's in the area and showing true ADR, Occupancy Rates, Revenues etc.

The issue I've run into is that the Debt Financing has not been completed and has a range between $30 and $40 million. I'm trying to estimate the Debt Servicing in order to get an estimate of what the project will Cashflow yearly. I want to have at least a strong estimate of the cashfllow before signing any Term Sheet.

Questions

1. Is it standard to sign Term Sheets without debt financing being finalized?

2. Is there a formula of sorts that would allow me to make a quick guestimate as to if the property will cashflow? or at what occupancy rate the property needs to hit in order to cashflow positive?

3. When investing in a New Construction Commercial Deal, what do you considered more important.. equity acquired? cash on cash return? or cash flow? I know this question depends on the investor, but would love to see what the consensus is here.

Thank you and I'll supply as much information as I can if more is need to answer the questions above.

Hello Everyone, 

Hoping to gain some insight and additional knowledge with this post. 

I'm currently in the process of my due diligence on a New Construction Commercial Hotel Project that was brought to me. 

I've been provided the Feasibility Report which includes a 5 year Proforma, Project Construction Cost Breakdown and I've also been provided a Trend Report for the previous 5 years as well. Trend report uses comparisons of other Hotel's in the area and showing true ADR, Occupancy Rates, Revenues etc. 

The issue I've run into is that the Debt Financing has not been completed and has a range between $30 and $40 million. I'm trying to estimate the Debt Servicing in order to get an estimate of what the project will Cashflow yearly. I want to have at least a strong estimate of the cashfllow before signing any Term Sheet. 

Questions

1. Is it standard to sign Term Sheets without debt financing being finalized?

2. Is there a formula of sorts that would allow me to make a quick guestimate as to if the property will cashflow? or at what occupancy rate the property needs to hit in order to cashflow positive? 

3. When investing in a New Construction Commercial Deal,  what do you considered more important.. equity acquired? cash on cash return? or cash flow? I know this question depends on the investor, but would love to see what the consensus is here. 

Thank you and I'll supply as much information as I can if more is need to answer the questions above.