All Forum Posts by: Norm Kopesky

Quote from @Elizabeth Connelly:

This is all great info @Norm Kopesky and @Jonathan Mueller and @Mark Zajaczkowski. I'm just getting the motel bug recently. How to do estimate utilities for pro forma? I'm a data nerd so I try to be tight and very conservative with my numbers. Do you estimate per unit or just overall size of the property?

It's my first commercial attempt so I'm hitting hurdles I don't have on the residential side finding tax info and such.

I would be requesting actual copies of all docs from the seller, (seller pro formas are dog crap) we have averaged 46-47% expenses at full occupancy, across 5 properties. 
Depending on region, heat and AC are our biggest expenses by far. Old buildings…
we are functionally running these places as efficiency apartments to dollar tree tenants. High risk, you have to stay on top of it, we also have not found any third party management that’s interested in hiring on…

Quote from @Jonathan Mueller:

That's awesome, I have a 8 unit in Menominee MI and a 23 unit in Fruita Colorado, and just bought a 108 site RV park in southwest Michigan. I was actually looking for another motel when I found this mis labeled RV park for a good deal! Do you have onsite managers at each of your properties ?

I do have onsite managers, that is the key position to the whole project. 

HQ is Appleton, where we have our largest at 31units

Omro 24 units

Necedah 22 units

Racine 22 units

Oshkosh 12 units

Talent is an issue for us as well, I’d like to sell the Racine location just because it’s the furthest from home for us. 

Thank you for your counsel. 
Norm

Thank you, is there a holding period we need to establish before engaging in the conversion, 12months, 2 tax returns etc?

I am part of a joint ownership structure on a large multi family property, several of the owners have used 1031 funds to join our project and we are wanting to roll that project into 1 LLC, with all of the original owners as members of the LLC.

The intention is to hold the project indefinitely, but to streamline the cpa side, and add additional liability protection. 

Can we do this?

I hope to get a feel for the answer while I await a response from my intermediary and cpa. 

Norm

Quote from @Tim Debronsky:

Thanks! @Norm Kopesky After you stabilize do they cash flow very well? Is a 50% occupancy a conservative number to use for our pro-forma?

The national average for occupancy is about 47% if memory serves, again tons of variables. 

Quote from @Tim Debronsky:

@Mark Zajaczkowski We just came across a 39 room motel in my market. How long it took you to turn around the motel? Was it a difficult process? I’m a single family investor/Landlord not a motel investor. We’re considering flipping it after turn around. 

 standard disclaimers, market, occupancy, staffing, property condition blah blah blah..

It takes us about 3 months to scrape out the bad tenants, get a quick tune up and be cash flow positive. once winter hits here in Wisconsin we go through another round of evictions. (10%) a month till we have it truly stabilized... as those units come vacant we upgrade those to the next level of quality. this will always be a class c property though...

If you can find good management that would be my vote

Is there quality management in your region?