How to evaluate a small vacation area hotel (40 rooms in OBX, NC)

3 Replies

I live in the Outer Banks of North Carolina. Two small beachside hotels have come up for sale (see LoopNet) and I would like to know if there are any tools other than CapRate and NOI to help me with deal analysis. I have been provided a Pro Forma from the listing broker, and it appears that there is some room for improvement on the numbers, especially vacancy during the peak season. This is a vacation destination and we really only have 3 busy months during the summer. I would like some help in evaluating a hotel, determining what to consider when evaluating and making a decision on purchase price, and I would like to know what sort of "tricks" to look out for. Any help you can provide is greatly appreciated.

@Jason Hathcock while I am familiar with the outerbanks, I am not familiar with hotel acquisitions and management. I would really dig in and find someone that specializes in this area. Trying doing the keyword search on BP. 

https://www.getrefm.com/ - has some great software and spreadsheets. I have used their multifamily spreadsheets before and thought they worked great. They have some hotel modeling spreadsheets as well, maybe check those out to help with the modeling.

Good luck!

Thanks Andrew.  I will check out the website.  I have met with several successful commercial investors on the OBX, however none of them have experience in hotels.  I will keep plugging away.  Thanks again. 

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