Motel investing what are the pros and cons?

[Jack McWatters]

Hey guys I recently came across a 18 room motel for sale, but I don’t know anything about motels and I probably won’t end up purchasing this one in specific but what are the general things to know about a motel? Are you able to convert a motel into apartments? For instance transform a motel into 18 1 bed one bath apartments?

If you were to keep it as a motel, and ramp it up updating things inside and out, how do you estimate the numbers per month? In theory they seem decent, but that’s based off amount of vacancy.

Anyone that’s purchased a motel can you spread some light on the whole process you went through and what are the pros and cons?

[Lynnette E.]

You won't be able to make an 18 room hotel into 18 one bedroom apartments.  To have an apartment that is classified as one bedroom, you need the separate bedroom, a bath PLUS the kitchen and living room.  It would take 2 hotel rooms to make a one bedroom apartment.  One room for the bedroom and bath and the other for the living room and kitchen.

You could make it 18 studio rooms if the rooms are big enough to make a small kitchen.