How to Structure a Deal on a Motel
I am looking to purchase a 19 room motel, and we are looking to raise an additional 100K for renovations. What would be the best way to do so? Below are some details on the purchase.
- Purchase price = $900K
-additional $ needed for renovations $100K
-Current owners Net Income 150K a year
-My forecast Net Income 250K after renovations
Since our all in would be one million dollars, if we raised 100K would that investor expect 10% equity, also would they expect 10% of net income each year as well? Should I take a management fee from there equity, since I am doing all the work? I know you can structure a deal how ever you want, but any suggestions on a good starting point for a deal, so we can start propositioning people we know?