Anyone investing in boutique hotels?

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Anyone investing in boutique hotels?

Garrett Kroll
Rental Property Investor · Victor, ID · Member since 2016 · 59 posts · 94 votes

My partner and I are actively looking to acquire a ~12 room hotel and utilizing a lot of the STR systems we use in our single family homes. Curious if anyone else has implemented this strategy and is willing to share their experience?

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Chase Hoover
Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
3y

Yessir - 4 boutique lodging properties, about 50 keys.  It's a different beast - make sure you have the right team in place!

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  • Chase Hoover
    Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
    3y

    Yessir - 4 boutique lodging properties, about 50 keys.  It's a different beast - make sure you have the right team in place!

    1Reply
  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    3y

    Mass production of the systems you already have. 

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Garrett Kroll, very interesting. Things will be different as it will not fall into the various STR rules depending on the state.

    I will also say that some systems won't work as well. Are you planning on offering kitchenettes and the like?

    Daily cleaning services? 

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  • Garrett Kroll
    OP
    Rental Property Investor · Victor, ID · Member since 2016 · 59 posts · 94 votes
    3y

    @Chase Hoover in your experience, what does the right team look like? Also curious what you think the key size threshold is for needing more on-site management?

    @Michael Baum one of the big draws for me is actually the potential security from STR regulation. In terms of amenities and services, I have no exact plans yet since it will depend on the what the specific property and area could support. I do think there's opportunity to rethink this space quite a bit though.

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  • Chase Hoover
    Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
    3y
    Quote from @Garrett Kroll:

    @Chase Hoover in your experience, what does the right team look like? Also curious what you think the key size threshold is for needing more on-site management?

    @Michael Baum one of the big draws for me is actually the potential security from STR regulation. In terms of amenities and services, I have no exact plans yet since it will depend on the what the specific property and area could support. I do think there's opportunity to rethink this space quite a bit though.


    We partner with a third-party management company who handles all cleaning, maintenance, etc. Others choose to self-manage and source/manage these vendors themselves, however we've found it beneficial to pay a bit more for outsourcing this which has allowed us to scale quicker and enjoy our weekends! The biggest we have without OSM is 22 units - not sure I'd go much bigger than that. The security from STR regulation (commercial zoning) is one of the biggest reasons we scaled up to this model as well.

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Garrett Kroll, will you be looking your area? Around the gateways to Yellowstone?

    Could be a good opportunity to focus on fishing and other outdoor activities. I grew up in Idaho, both Pocatello and then Coeur d'Alene so I am pretty familiar with the area. 

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  • Garrett Kroll
    OP
    Rental Property Investor · Victor, ID · Member since 2016 · 59 posts · 94 votes
    3y

    I'm looking at all markets that are within 10 hours of me, Yellowstone country included. I'd love to get something nearby but the price points will likely push me to other markets. As an angler myself, I'd love to find something that I could renovate for that customer base! 

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    What is your pricepoint? The Alpenhof is for sale. Teton Village area.

    https://www.alpenhoflodge.com/

    Seriously though, a quick search through Loopnet showed a few places for sale, but most are well over 1m and most are over 3m. Those are currently operating lodges/resorts/hotels.

    Some are really cool like the Alpenhof, but crazy money at 50m.

    Are you willing to relocated to run a bigger place? The SBA could be a plan for a loan if you want the whole thing up and running.

    0Reply
  • Garrett Kroll
    OP
    Rental Property Investor · Victor, ID · Member since 2016 · 59 posts · 94 votes
    3y

    Under 2m is where we're focused - so just a hair under 50m :)  That limits inventory quite a bit so we may end up widening the 10 hour circle, we'll see. 

    Definitely not looking to relocate, but the SBA is great call I'll look more into that option. I've also noticed a few listings with retiring owners so I'll be polishing up my seller financing talk track.

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Sounds good @Garrett Kroll. I am looking forward to seeing how it shakes out. Good luck and keep us posted!

    0Reply
  • Tyler Garcia
    Investor · Tampa, FL · Member since 2020 · 20 posts · 4 votes
    2y
    Quote from @Garrett Kroll:

    My partner and I are actively looking to acquire a ~12 room hotel and utilizing a lot of the STR systems we use in our single family homes. Curious if anyone else has implemented this strategy and is willing to share their experience?


    this is awesome, congrats! I've been watching a ton of Blake Dailey on Youtube around the entire Boutique Hotel Investing subject and it's been really helpful tbh. I'll put his channel below incase anyone's interested 


    https://youtube.com/@BlakeDailey

    0Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    2y
    Quote from @Tyler Garcia:
    Quote from @Garrett Kroll:

    My partner and I are actively looking to acquire a ~12 room hotel and utilizing a lot of the STR systems we use in our single family homes. Curious if anyone else has implemented this strategy and is willing to share their experience?


    this is awesome, congrats! I've been watching a ton of Blake Dailey on Youtube around the entire Boutique Hotel Investing subject and it's been really helpful tbh. I'll put his channel below incase anyone's interested 


    https://youtube.com/@BlakeDailey

    There's also Rich Sommers and Micheal Sjogren's social media and youtube channels.
    [email protected]330-557-3021
    0Reply
  • Cliff BennerBusiness Member
    Accountant · Denver, CO · Member since 2020 · 394 posts · 183 votes
    2y
    Quote from @Michael Baum:

    What is your pricepoint? The Alpenhof is for sale. Teton Village area.

    https://www.alpenhoflodge.com/

    Seriously though, a quick search through Loopnet showed a few places for sale, but most are well over 1m and most are over 3m. Those are currently operating lodges/resorts/hotels.

    Some are really cool like the Alpenhof, but crazy money at 50m.

    Are you willing to relocated to run a bigger place? The SBA could be a plan for a loan if you want the whole thing up and running.


     What type of SBA loan should one be looking for if they want to do this and live on site?

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    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    2y

    Hey @Cliff Benner, there are a few options and I am no expert on the subject.

    You should contact an SBA lender an see what is available.

    I will say that if you are doing something like a duplex or triplex then SBA will not be for you. Even a 50 unit apartment building would be tougher.

    You would need some kind of commercial hospitality business like what I posted about.

    For example we thought about doing a nice B&B in New Hampshire years ago. Buying an existing B&B was the plan and the SBA lender we spoke to was OK with it. That was years ago.

    1Reply
  • Cliff BennerBusiness Member
    Accountant · Denver, CO · Member since 2020 · 394 posts · 183 votes
    2y

    @Michael Baum I appreciate it.

    Sounds like find what I am looking for then call lenders until i figure out a loan.

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    0Reply
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