Airbnb Operator wanting to buy Hotel

[Syed Lateef]

I run an Airbnb short term rental business in Chicago and getting close to 100 units under management. I master lease properties

I have a substantial operation supporting my current volume. 

Guests Services, Operations, Marketing, Pricing, Finance, Cleaning team, Handymen etc.

I am interested in the idea of purchasing a boutique hotel and run it within my current systems.

I have no experience in finding a hotel, market value of them, or anything.

My questions stems from do you think it would be an easy transition to operate the business side of the hotel with the infrastructure i already have in place? 

What would be the best way to find out hotels for sale in Chicago? Theres literally just 1 on loopnet. 

Are hotels valued by the NOI of the business divided by the cap rate? That would over value you the real-estate if thats the case. But i guess i am buying the real estate and the book of business as well
How do banks finance Hotel purchases

What are other things i should consider when looking to get into this type of business/real estate purchase. 

[Storm S.]

@Syed Lateef find a commercial broker with access to costar he can pull a list of all off market hotels in your area. I would help you out but I only have access for California. There may be only a handful of major hotel brokers in your state. A good trusty way to value any properties is a discounted cash flow analysis. If the hotel is stabilized and is not a value add deal you could use cap rates but that just should be used more as a check/ back if the envelope technique.

[Greg Dickerson]

@Syed Lateef Flag hotels are primarily traded on CAP rate valuations. Boutique hotels are typically valued based on NOI as well but the uniqueness of the property and location can also come in to play and skew the CAP rate value.

I think you could easily fold this into your businesses model. I have several friends in this space on the Outer Banks of North Carolina that are having a lot of success with it.

Some other resources to find properties are CREXI, TenX commercial and there are Hotel specific sites as well. Loopnet also owns Biz Buy Sell where you can find the types of poperties.

You may need to go direct to seller. You can search tax data bases and or buy a list form companies like Listsource. There is also Reonomy which is a subscription based commercial properties data base search tool.

[Syed Lateef]

@Greg Dickerson Thanks for the info. I will look into everything you mentioned above