All Forum Posts by: Kyle Davis

@Justin Charpentier No problem, Justin!  Go ahead!

Hey @Pauline Misiak!  Would you be able to e-mail me more details regarding the property?  Last 3 year rent rolls....Profit & Loss Statements....Additional Photos?  Thanks!

Kyle Davis

@Justin Bauer this is still in the works!

Hey @Mike Mankowski, we have a lender already set up.  Unless you can beat 4.25% interest amortized over a 20 year loan with 5 year balloon.  And each person signs a personal guarantee of 125% of their money invested in the project (so the owners are not responsible for the entire loan, just 125% of the cash in).  If you can beat that, I'm open to hearing ideas.

But we are raising private funds from people that want to be partners/owners if you are interested as well.

Thanks!

Hello BP World-  I'm building a franchised hotel and am currently wondering what people that are in the hotel industry usually use as a down payment.  25% down?  20% down?  My bank that I'm going with will let us go forward with having 20% down (which is 800k FYI).  And I found a local gap lender who will borrow us 150k at 3.25% interest to assist with the down payment.  I obviously know the pros/cons of having higher debt so no need to go into those, but I'm just wondering what other hotel investors are doing.  It's in a smaller market, but limited competition so the feasibility study that was conducted came out good along with the pro-forma.  I could just use some insight as I'm almost there raising all the money needed from private investors.  Thanks!

Hello BP friends-  I am in the process of developing a hotel in central MN.  I have a large amount of my ducks in a row including feasibility study, pro-forma (both done by a 3rd party company), franchise selected, contractors selected, and hotel management company acquired.  I have raised $500k so far, and need at least another 300k at a minimum, but hoping for another 500k raised.  Has anybody here had any experience in hiring a private capital raising company to assist with something like this?  Thanks in advance!

Thank you, @Dan Wallace for that input.  I'll delve deeper into those scenarios with the bank and see if we can negotiate further.

@Dan Wallace confirmed with the bank that it is a balloon after 5 years, but, and I quote "As long as their is no new money involved (cash-out refi), we would not need to do a new appraisal.  You would be charged a doc prep fee and that is it."

@Dan Cho  Mine was $13,000 including a 5 year feasibility study.  It took 2-3 months to complete.

@Scott Snow Yeah SBA told me about the ownership of anyone over 20%.  Since nobody at the moment has that amount of ownership in the business, I asked my SBA rep what would happen.  He stated that he would look into multiple people having that personal guarantee.

The bank has prequalified the deal.  They looked at the pro-forma and are happy with it.  They just want to see at least a 20% (800k) down payment.  I'm over half way there with 500k, but just wrestling with getting a gap loan to do the rest.  One company said they would do it with a 150k loan at 3.5% over 10 years which is very attractive, but at the end of the day it is a loan and not straight cash in the project.  So that is my struggle at the moment!

@Dan Wallace I'm double checking with the bank to see if it's just a rate adjustment at 5 years or a balloon.  Hopefully will have answers soon.  I'm skeptical on others coming into the market with another hotel as the town is small and only has 1 hotel at the moment.

Mr. Cho, as far as analyzing the deal my project is a new construction and not a purchase so I did not have 3-5 years of financials to go off from, so I had to hire a feasibility study company to do it for me.  Their names are Hospitality Marketers Inc out of Florida & Wisconsin.  They were very professional and very intricate on everything.  I would give them a call and bounce ideas off their owner, Greg Hanis.  

I raised the money by creating a thorough business plan with a 5 year pro-forma and called almost everyone I know.  I also offered an incentive to other people that if they brought an investor to the table, I would give them a 1% referral fee.  So if a friend brought another friend to the table, and that friend invested $50,000 I would pay the first friend $500.  It may not seem a lot, but all it takes is a phone call.  (And I would love to get paid $500 for just making a simple phone call).