More questions :-)
A) So were you able to use a guy would normally do single family home inspections to inspect your motel too? Or is there such a thing as commercial motel inspector?
Yes, our realtor recommended her inspector that she uses. He had never done a motel before, but the inspection went well about $700 and I walked through the entire property with him during the inspection. Truthfully, he just covered all the systems like you would in a home inspection.
B) What about insurance? Were you able to use the same company that you use say for your primary to insure your motel?
Insurance was one of the more challenging parts of acquiring the motel. We tried to use some local companies, but we were turned away by quite a few or the quotes were ridiculously high. We ended up using Biberk (Berkshire Hathaway), they were very easy to work with and commercial space seems to be their jam. We pay roughly $500 a month for our policy right now. We're hoping next year we can shop around more to get this number lower. We had to go with BiBerk b/c we needed proof of insurance by closing.
C) How does property tax look like? Would you mind sharing your PITI and monthly payments you are expected to make to your lender?
Our monthly payments are a little under $1600, I don't have the breakdown in front of me, but that includes principal, interest and taxes. We pay the insurance separately, so around $2100-2200 total.
D) Since you guys are full time teachers, Im expecting you have people (at least a manager/reception and one person for cleaning)? How many rooms is this property? Where in western Colorado are you guys? Im all over Denver, Longmont, Thornton, Westminister and South Denver/DTC area.
Currently, we have one cleaner. The cleaner lives very close to the motel. We are 14 rooms, 2 floors. We are in Collbran, Colorado about 45 minutes away from Grand Junction.
E) Since the previous owners were adventures (accepting cash etc), how would you guys go about ensuring that if you have employees then all the workers compensation and labor related laws are being abided by ie you dont want your employees to take advantage of novice bosses and sue you for some corner case violation? Just as Im asking this question, Im thinking make everyone contractor (thats one thing I have learnt from our friends at Uber/Lyft) lol
So, it is just me, my wife, my business partner and his girlfriend managing the motel currently. We upgraded the doors to keyless entrys and we have an amazing property management software to keep our bookings in line. My wife and I have a couple rental properties, so we are a little seasoned with property management to make our systems/communication more efficient. And also finding a local cleaner has been a game changer for us.
Let me know if you ever head over this way and we would be happy to show you what we're doing.
Jen Taylor (Christi Reece Group) was our agent. I've done a couple deals with her. She is the best (I will never use another realtor and we've recommended her to many of our friends and family for purchasing homes in the Grand Junction area). Also, she is building an awesome campground on the Colorado River in Grand Junction.
