Looking in to purchasing a small 20 room boutique hotel in need of major renovation ($1-1.5m). The property holds contributing historical designation, so will have renovation constrains to take into account. This would include taking the property from a 20 room down to 12 to allow each room it's own bath, which will cut into nightly profits. Looking for guidance from others who have taken on a project of this scale, worked within historical property renovation and operation of the hotel once completed. Also curious if anyone has had success with any grants on historical renovations, or similar programs to assist with cost.
Find a CPA and a attorney that has did one of these before they will walk you through the process.Do not start any rehab before you have it set up correctly it could cost you.
I have never done one but Sat through a presentation at a local exchangers meeting yesterday.
@Erin Hogue congrats on deciding to get into hospitality. It's a tough, but rewarding, business.
The economics of this deal might be difficult, depending on the service level you are targeting. A 12-room hotel will operate more like a bed & breakfast, and you should be prepared to be the manager.
Assuming you have a good handle on the financial model, I would agree with @Justin Bauer . You need a skilled team - attorneys, architects, designers, and accountants - to effectively navigate the historical renovation. You'll also need an engineering study to determine the building basis if you plan to apply for historical tax credits.
This project is not for the faint of heart. You will learn a lot, but it will definitely be a challenge.
Thx @justin bauer, will go in and check out Tax Incentives you have listed. Very much appreciate your guidance.
@Erin Hogue Did you end up making this work? I’m interested sun how this worked out for you.