Strategies on renovating a rundown beachfront motel

Realtor · Plain City, OH · Member since 2022 · 82 posts · 58 votes

Are you saying that you would gut and renovate units incrementally until all the rooms are done?

Leon Lee

OP

Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes

Quote from @Michael Baum:

Geez @Leon Lee, that sounds both awesome and terrible at the same time. A couple of questions:

Do you have all the funds to completely redo the whole place at once? Can you absorb the loss of revenue while that occurs? Where is it located? Are there some rooms better than others? How far away are you from the property?

Personally I would plan to do the whole thing at once if I could. Otherwise, do a minor clean up in the best rooms and go from there. i would immediately toss each and every mattress in the place and start there. Remove carpets and replace with some kind of LVP on the cheap. Take care of the obvious problems in all the rooms right away. Then pick the worst 2 and start there.

Some pics would be helpful. Good, bad and ugly.

Michael

Thank you for the info, which is very helpful!

We do have funds to completely redo the whole place at once. But we are afraid that with so many units being gutted and renovated, any hiccups or market downturn could put us in a very bad situation. I am 7 hours drive from the property, which adds another lay of complexity. So long distance + major renovations + many units being worked on simultaneously do not sound good to me. That is why we are thinking about to first incrementally improve the condition of the units (to make it acceptable), and then gut them one or two at a time, until all units are being turned. This way, we continue to have cash flow coming in, and if we happen to have a bad contractor or one or two units and/or some permit/regulation related issues, the scale of the damage won't be too overwhelming.

Are there any other points that we need to pay attention to?

Thanks again!

Lee

Leon Lee

OP

Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes

Quote from @James Alderman:

Are you saying that you would gut and renovate units incrementally until all the rooms are done?

James

We have two choices: (1) to incrementally improve all units by replacing mattresses, beddings, furnitures, etc., and then gut one or two units at a time, until all units are renovated OR (2) do not do any improvements on most of the units, except the ones that are being majorly renovated.

Thanks

Lee

Realtor · Plain City, OH · Member since 2022 · 82 posts · 58 votes

I'm sure that you have photos for potential guests to view through the booking platform. Will you wait until all the rooms are finished to update the property photos? I wouldn't want to post photos of the renovated rooms, and then have a guest upset because they get an older room.

You could create "updated rooms" as one booking choice at a higher price point. You'll need to carefully manage the booking allocation as rooms are finished, and have solid schedules that are stuck to, to maximize cash flow. Or only switch the allocation as rooms are finished, lose some of the potential increased rates, but have some happy, surprised guests when they get an updated room after paying for an older one.

I hope that makes sense.

Leon Lee

OP

Real Estate Investor · Atlanta, GA · Member since 2016 · 286 posts · 67 votes

Quote from @James Alderman:

I'm sure that you have photos for potential guests to view through the booking platform. Will you wait until all the rooms are finished to update the property photos? I wouldn't want to post photos of the renovated rooms, and then have a guest upset because they get an older room.

You could create "updated rooms" as one booking choice at a higher price point. You'll need to carefully manage the booking allocation as rooms are finished, and have solid schedules that are stuck to, to maximize cash flow. Or only switch the allocation as rooms are finished, lose some of the potential increased rates, but have some happy, surprised guests when they get an updated room after paying for an older one.

I hope that makes sense.

Yes, that makes a lot of sense: We always listed our other airbnb units individually and we are learning how to handle multiunits in Guesty for this motel!

Thanks again!

Lee

Fllnids Agg

Member since 2022 · 11 posts · 5 votes

Everything what others have mentioned above - but will also add in your timeline. With summer break 3 months away - think of how much you can get done realistically in the hope that you can rent during summer months and slow down in fall and repair more then. Things I would consider in making a decision:

1. Literally everywhere on east coast the most difficult part at present is finding the crew / handymans / companies that can do the renovations whichever route you are planning on taking.

2. Even for LVP - you'll be surprised at low stock / availability of stock based upon your choice. Same for furniture delivery etc.

3. Take into account other issues you'll run into if you start revamping the whole space all together. Piping / leakages / etc.

4. One option could be: take 1/2 the rooms at a time and revamp those with new paint / wallpaper / decor with revamping the current furniture for time being. Of course mattresses etc tossed out, if its tiles, current flooring can be simply painted - if your LVP is taking longer delivery times.
This way, you can rent and see what kinda pricing / rents you get during summer and then go about revamping the remaining items / flooring etc and other rooms in fall - slow season.

All the best!
Cheers

Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

Ok @Leon Lee, everyone here has good points. I have found a ton of new material on Craigslist if you are willing to hunt.

The biggest issue I can see is that if the place looks rundown as you go on until it is finished, you risk the ratings on VRBO and AirBNB taking a hit. You will end up with a 4.3 or 4 stars and it you will see your bookings start to drop off. It is tough to get out from under those 3 star reviews.

At the very least I would really take care of the exterior. Make it sharp first then start on the rooms. Get the best ones polished up and start renovating the rest. Maybe do themes in each room. Sounds kinda gimmicky but that can explain the different finishes or materials in each room if you can't get enough in bulk.

Realtor · Plain City, OH · Member since 2022 · 82 posts · 58 votes

@Michael Baum why not just relist after the rehabs and gain back the SEO boost for a month while grabbing better reviews? If say, the avg review is less than 4.5.

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

Door #2...fully renovate a unit or two at a time...many units at a time during the offseason. Partial renovations are often fully discounted due to unfinished parts.

Long distance rehab is the riskiest strategy discussed on BP...very hard to find and manage renovation from seven hours a way. Heck, it's hard locally.

2 Reply

Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

Well @James Alderman, people are pretty smart and will recognize a relisted place. Yes you know it is all nice now, but potential guests will figure it out.

I guess I just don't like redoing things.

Realtor · Plain City, OH · Member since 2022 · 82 posts · 58 votes

@Michael Baum I only mean if the rehab is so dramatic that is warrants it one time, and the poor reviews were specifically about the outdated nature (not location, safety, rodents/bugs, customer service, etc.)

No one should ever relist just because of some new paint and sheets. Or to simply "wash away their sins" by relisting.

Tim Hall

Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 463 posts · 237 votes

@Leon Lee ha we’ve just done the same thing. We bought a run down motel in florida. This is what we did. Bear in mind that we have 2 buildings and 20 units. We firstly made everything safe on both buildings. Ours had hurricane damage from Micheal in 2018 and had been closed since then. We attacked one side of it. Doing 10 units at once. Redesigning the units and making everything pretty. We mainly worked with what we had. The layout wasn’t too bad so we kept with it. We added some quirky finishes and kept with our coming of age Americana motorcade theme. We opened that side in late December with a soft opening with family and friends to get feedback on what needed to be changed, added or got rid of. We’ve been fully booked for 2 months and are recouping some money until we start phase 2. Good luck mate and we’d love to connect.

2 Reply

Jon KellyPro Member

Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes

@Leon Lee Option #2. This allows you to earn some $$$ while you're rehabbing. It will take longer but you'll have a very nice motel in 1-2 years.

The only issue you're going to have is attracting guests to pay the higher prices for the newly renovated units WHILE the rest of the motel is rundown.

I would also invest in landscaping and fresh paint throughout the exterior. You need to make it obvious this is under new ownership and bed bugs / moldy bathrooms / stained covered mattresses are a thing of the past.

2 Reply

Tom O.

Chicago · Member since 2018 · 216 posts · 165 votes

Look: bedbugs and ****** mattesses and bedding and you're asking if you should do something about that? Of course you should. You should do No. 1 and then when you get the money do No. 2. You don't really have a choice.

First, get the place cleaned up. Get rid of the bedbugs which will kill a rental. Clean, fix, paint, etc. Do as much cosmetic and remediation short of gut rehabs you can. Get every unit up to some base level of adquacy. Figure out what units are worst or which units will bring the most money. Fix/rehab them first.

This is just advice from a schmuck who only owns long term rentals, however. I don't do STR and don't pretend to know anything about it. This just seems obvious to me.

Jeff Hanes

Rental Property Investor · Albuquerque, NM · Member since 2016 · 9 posts · 5 votes

This is something I would like to do in the future when we move to FL, right now we have both LT and STRs in multiple states. My choice would be to move down

to FL and be the GC yourself. We have allways done our rehabs this way. You can get a lot more done faster when on site. The out of state ones are in FL and took about a week for each house as a STR. We do a lot of the work ourselves and sub out the large jobs. Almost all work can be subbed out

Jason Kudo

Real Estate Agent · Pasadena, CA · Member since 2017 · 276 posts · 255 votes

Quote from @Leon Lee:

Hi, Fellow BPers

I have a question on what strategy is the best on turning a rundown motel we recently purchased and would appreciate your inputs:

This is a 20-unit beachfront motel that has been poorly run in the past 3 years. A few examples include several units with bed bugs; moldy grouts in about half of the bathrooms. Yellow stains are everywhere on mattresses and pillows\ inserts that probably will stop 90% of travelers from sleeping there. But because of the beachfront location, the business is still ok, although it is not profitable. For example, it is still fully booked during the spring break (although a major reason is significantly under priced nightly rates due to lack of experience and pet friendly policy)

To turn this motel, we are thinking about two strategies: the first is to incrementally improve the place, i.e., replacing all these nasty mattresses and beddings, re-caulking bathroom tiles, adding some nicer furnitures, etc.. But kitchen, bathrooms, paint and floor eventually all need to be redesigned and redone. The second strategy is to keep most of the units untouched and operate them as is, to generate some cash flows. In the mean time, we totally gut and renovate one or two units at the same time.

So what will you experienced investors do for such situations. Since it is a long-distance investment, we do want to keep certain cash flow to reduce the risk. Are there major points that I am missing?

Thanks in advance!

Lee

Hey Lee, how is this project of yours going?

Account Closed

Member since 2018 · 58 posts · 24 votes

Do them as quickly as possible, all at once. Shut down 5 or 10 for the contractors to work on (you can still rent the others, but put on all booking sites that a renovention is going on, ss that you don't get noise complaints), then shut down next 5 or 10. When you shut down last group of rooms, raise rates, and market as newly renovented. You want the renovention done as quickly as possible. Plan it out carefully with your contractors before you start. Shut down a couple rooms to store all new furnishings and supplies. Try not to be waiting for something to come in before you can continue. To get bulk pricing on some things, you will order many things for 20 rooms before using them, so think about storage.

I would take 10 rooms out of order, empty out 3 to 5 rooms for storage, renovate 5 to 7 rooms, with those are finished do next 5 to 7. Move storage rooms to renovated, but not set up rooms, and complete rest.

When finished, have a grand re-opening. Think about, maybe changing the name, or other ways of re-branding. With name change you can get new Tripadvisor page to disassociate yourself with old hotel. Don't do things peice meal in the same room. Don't rent out a renovated room until it is complately done (meaning the room is completely done. Don't replace mattresses, and still have to paint).