How do I go about investing in hotels

Question

So I’ve recently came across a list of off market hotels that my acquisitions team sent me. And I’m thinking of acquiring one of the hotels. I’m wondering how do I get an investor or investors involved that look for these types of deals. And what’s the best way to go about making an offer on the hotel?

Greg Dickerson · Answer

Hotels are a retail business inside of a real estate asset. There is a whole lot to know about hotels and the markets they are in before you take leap much less try to raise investor capital to buy one. One thing is if the Hotels you are looking at are Flagged you need to be approved by the Franchisor or parent company in order to take over the franchise. Some companies are easier than others in this regard.

Start with educating yourself on the space, the markets, the metrics, KPI's, industry language, laws, the different flags and their requirements. You can find a lot of resources online and also speak with some third party management companies in the markets you're looking into.

Account Closed · Answer

@Michael Ealy

Thank you Michael.

Account Closed · Answer

@Gaspare U.

Thank you

Michael Ealy · Answer

Thanks for the mention @Gaspare U.

Demetre, I look for hotel deals all the time. You need to know these numbers:

ADR, Occupancy, MPI

Also, what is the selling price? Why is the seller selling? What are the flags these hotels are under?

Usually hotels are sold through a network of commercial real estate brokers specializing in hotels. And they already have vetted buyers lined up. These hotel deals are not usually available to the public but only to a few investors who already in the hotel industry.

If people are forwarding them to you, and you don't know how to get investors interested in hotel deals, I wonder how good these hotels really are. If these deals are really good, experienced hotel investors would have already scooped them up.

Let me know if I can help.

Gaspare U. · Answer

Perhaps @Michael Ealy can assist.

How do I go about investing in hotels

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