All Forum Posts by: Neel Patel

Hello, 

I am a new investor based out of Huntsville, AL. I have never wholesaled before but would love the opportunity to learn how to, I invest in hotels/motels. If anyone here would like to spend some time and teach some of these things, I would repay the favor by putting together deals in hotels/motels. 

Hello,

I am purchasing my first motel/hotel business. It is a leased property and a great way for me to get in the door. I am nervous but the reason for me posting this is I wanted to see if anybody can tell me what questions I should ask to make sure im getting in a good deal. I want to be able to cover all my bases and not have to go back and forth with the leasor and be able to make an educated decision to push forward or drop the deal completely. Please help. 

@David Smith Interested to know if you purchased this property. 

Hello @Andrew Warner:

I have recently decided to change gears and started looking into hotel properties. I have quickly come to learn that hotels are business and real estate combinations. Depending on the size of hotel you are looking at, and flagged/independent, there are a multitude of experiences that follow. While this asset class is much more focus and labor intensive than multifamily apartments, it can be that much more rewarding when done properly. I am in the analysis stage as well where I am looking for properties and making contacts with brokers. Typically I will ask for:

• The current and last 3 years revenues as well as tax returns
• P&Ls 
• If there is a PIP in play or if the Franchise company declared one
• STR reports
• RevPar (Revenue Per Available Room)
• ADR (Average Daily Rate)
• Break down of expenses 
• Economic growth in the vicinity 
• Abilities to increase revenues that the current ownership is not taking advantage of
  • Something like creating contracts with local companies

Over all, with hotel investing there can be tremendous potential for cash flow, tax benefits, natural appreciation, and forced appreciation. One thing to definitely take into account is market timing - which unfortunately it seems as if we are in a sellers market as prices are almost 4x the Gross Revenue and tons of inventory is being added in the market. 

Would love to discuss more and learn from each other!

@Michael Ealy

Thank you for the update! Added to my calendar. You mentioned to email in so we can make an arrangement for a call to brainstorm a little beforehand, If you still would like to, the offer is on the table. I emailed and never got a response back. Just wanted to touch basis. 

Thank you, 

Neel

I estimated the taxes since there are no county records. The estimation was calculated on the Madison County Tax assessor's page. Also, I agree - Vacancies can get tedious in these kinds of areas. I would still give it a Class C, unless my class ranking scale is inaccurate, could you explain why you say that since you're from Huntsville, @Mike S. ?

If I'm being optimistic on this report, what are the tale-tell signs that give-away that notion?  

View report

*This link comes directly from our calculators, based on information input by the member who posted.

So I've come across this Tri-Plex property that's a new construction in a growing part of town. The city has decided to invest $30MM into the infrastucture and 'cleaning' up the area. The property sits in a class C area, market rents are estimated at $700-$800 and has a good possibility to rent out on Section 8. 

The small multifamily market in Huntsville is a little dry and most investors are seemingly making equity moves and some people are theorizing that the small multifamily market is still warming up. 

In theory the property is in a great location and could be capitalized on, but I don't want to force the deal if the numbers aren't working. My team is fairly new and conventional lending may not be an option. I would just like to discuss how investors would approach this deal. Should I be accounting for so much for insurance and repairs since its a new construction? What could be some other potential exit strategies for this kind of deal? 

Hello BP Team!

Our team is new to REI and have our first deal under contract. We have to close by Nov. 25th.

So, let me start off by explaining how our LLC's structure is set up and I'll attach a graphic that might help as well. In essence, Triumph Investments & Holdings is owned by 4 LLCs. 10 people total own the 4 LLCs (broken up by families).

• The lenders have to see every LLC's operating agreement and I will have to use a standing power of attorney in order to close on behalf of everyone else.

This is our first property and out of all 10 of us, no one owns their primary residence, nor have any experience. 

Deal:

• 4-plex
• BRRRR strategy
• Purchase price: $75k
• Rehab budget: $25k
• Currently, tax assessor values land + building for $144k
• No MLS access and could not get in contact with the two rehabbed quadplexes on either side. Tax assessor values them for $142k and $144k, but I don't know if that's before their rehab or not.
• I did NOI - (accounting for vacancies, repairs, and management) / typical Cap Rate = $190k but banks wont use that for 4-plex.
• We've had the title search done as well as an inspection and had an inspector come in with a $17k bid. 

Lender:

• Due to BRRRR, we are using hard money lender.
• Down payment plus fees and what not 
• They are requiring $1500 up front just for appraisal and inspection
  • Is this standard? I don't think we should have to pay for another inspection, since the inspection we had conducted was performed by a licensed inspector.

Questions: 

• The purpose of our structure is to keep individuals anonymous for liability reasons (Created in Nevada). Should I look for another lender that respects this? Or is that standard?

1. Is the second inspection standard? I don't think we should have to pay for another inspection, since the inspection we had conducted was performed by a licensed inspector.
2. Is an $8k buffer enough for uncertainties? 
3. How are inspectors going through hard money deals so fast and with minimal costs?
   

@Michael Jones

I myself am a new investor and agree, the multifamily properties look attractive. Zach and Tim hit it on the nail Huntsville metro area has been too focused on expanding outwards. Value add to larger complexes have seemed to attract many investors.

In my opinion the small multifamilily properties market rents have plateaued and it seems as investors are having a hard time increasing them. You'll be holding C+/B- properties and charging C-/C rents. What are your thoughts? (Everyone please give your opinion, would love to get some ideas flowing)

I'd like to discuss some properties with you and get your opinion.

Looking forward to talking soon,

Neel

@Jacob Emmert

Welcome to BiggerPockets and welcome to the Huntsville area. As a recent grad my self, and new investor, I'd definitely like to connect. We have a local Real Estate Investor Association (REIA). Look up Madison county reia on Facebook and join the group!

Looking forward to hearing from ya.