Turning a motel into long term rentals?

Question

I found a small 12 unit motel with 5 RV hook ups that needs quite a bit of work. It’s about a 30 minute drive from me. It’s in a small west Texas farming town about 30-45 minutes away from any real “big city”

The motel aspect doesn’t make sense to me but i thought maybe turning them into small 1bed/1bath long term rentals?

Does anyone have experience in doing this?

Andrew Syrios · Answer

We have a 32-unit apartment that I am all but 100% sure used to be a motel back in the day. The biggest issue would be you need to add kitchens and all the units would be small. You will also likely need to get the property's zoning changed. And small towns can always be a bit risky too so make sure there is sufficient demand. But it definitely can work if all of the above makes sense.

Andrew Postell · Answer

@Kyler Smith thanks for posting.  Always great to hear from a fellow Texan.

I see you have some responses here but this forum is more for BRRRR method questions.  The BRRRR method is more of a residential technique.  This type of a question would be more in the Commercial and Multi-Family forums.  When you do this there will be several things to consider - navigating zoning changes, permitting process, contractors that are in this area with experience with this type of work, sustainability of this type of a multi-family in that market, and then there's financing which you would need to provide entirely by fundraising as no institutional investor would provide...probably a few other things to consider as well.  But try posting in the commercial forums for more responses in this area.

Joe Mivshek · Answer

@Kyler Smith. Have not done that yet but great idea and more and more small motels are struggling

Jerry Puckett · Answer

Hello @Kyler Smith

It has certainly been done before. I have some first hand knowledge: this link shows how one of my clients did this in Myrtle Beach.

I've also worked directly on a similar project, though it was for a specific type of tennant (Seniors) that included some services as well.

I can also tell you that there is currently a lot of interest in "affordable housing". I've had an unprecedented number of people lately looking at everything from mobile home parks (which are making a huge comeback) to subdividing land for more density, and even spaces for "tiny homes". So this is definitely an effective model. But as with anything RE, you have to do your due diligence and get your numbers right. In this case, you might want to check county zoning to see if it's permissible (Texas is just about the most landlord friendly place on earth).

Hope this helps. If nothing else it will sharpen your number crunching skills!