All Forum Posts by: Jason Chen

Applying for the HELOC first and getting approved for that and then having it available (but dont take out money yet), and THEN getting that truck loan wouldve been a better choice. It may now be hard to get that HELOC approved for as much as you could have beforehand (did you get it first already)?

Someone tell me I'm wrong if I'm wrong. I believe that there is a certain way you gotta play the credit game.

wooden floors was a nice touch. so was the color chosen for the walls. good job

no, its nowhere nearly as brutal as you think. they have tons of free time, and they are allowed to leave the property later on during the day. the lack of stress from being able to pay rent or mortgage is big for them as they live there for free.

anytime you buy a motel, keep in mind that you are not only buying a motel with X amount of rooms, but that it is also X amount of rooms + 1 good sized apartment unit, so there is some extra value there

 It would be considered part of the appliances. If you do it right and spend just the right amount, it should pay off. Just gotta make sure that they are responsible if they break it.

$1,000,000,000 a month in passive income is basically when i will retire

 I am usually never at home so i gotta type everything on the phone, otherwise i would more easily be able to get into more detail.

now the amount we pay the manager is not very much at all, but that is ok because the manager gets a huge perk: they get to live in the manager's quarters which pretty much all motels in the united states have. the managers quarters is connected to the front office and consists of a 2 bedroom, 1 bathroom apartment with an adequate spacious kitchen and spacious living room. an older couple who is retired, about to collect social security checks possibly, and has a minimal and quiet social life is most desired for this position. they get to live rent-free and utilities-free, and i get a manager for minimal expense. its a win win situation and i often become good friends with them. most managers only stick around for 1-2 years, but some are willing to basically stay for decades even.

the motel business is a seasonal business, but not an extreme one. typically around march-may, business slows down an observable amount, and after that it picks right back up to 90-100% occupancy on every night. several nights a year, we have to turn away guests at nighttime because we have no rooms left to sell.

the budget motel is a peculiar business, but then again its really not. your average person might struggle to understand how this business requires a decent amount of hard work, yet is simultaneously one of the most laidback businesses you can get into.

we remain super competitive, to the point where its not even competitive anymore for us. the reason why is because i have placed a 40 inch tv in every room, along with a full sized refrigerator and a real kitchenette. for $190 total per week and free housekeeping and wifi, who wouldnt want to stay there vs. renting at an apartment that requires all sorts of documentation and an application fee? most of our customers are locals who become long term, and sometimes super long term guests.

even during the slow season, it is not really "slow" because of the amenities we offer vs. the other motels that essentially nickel and dime you to death, and give you little in return. can you imagine paying $50 total per night for a room with a full sized refrigerator and 40 inch tv? not even the hilton has that. can you even imagine your typical budget motel operator spending an extra $1000 on room improvements such as these?  the floors we have are also tile floors, so you can forget about bad smells and disgusting things lying in the carpet. also makes the room super easy to clean. ha! the customer is always first.

my only gripe about the 15-50 room motel industry is that the barrier to entry is quite high, and not just for pricing reasons. very few are for sale as most owners simply just dont want to sell, and most are too stubborn to list them for a reasonable price. in a way, i guess it benefits me because that means less competition...but i dont know. 

 any experienced investor who seems "good" at this gig is someone who will tell you that EXCITEMENT is the #1 most important factor when it comes to finally judging how high quality the buy is.

you may be excited because the numbers might make you excited (always a great reason obviously), or it may be because of the potential of the area (also numbers), whatever it is.

if youre not excited, theres always a reason why for that too. sometimes we are tempted to get into a marginal deal because there hasnt been any action to be  had lately. this is a bad idea just about every time. its always better to wait...

...but dont go on a vacation just yet because a great deal typically arises as soon as you go on vacation.

Don't forget, putting a big 60 inch curved 4k screen TV in your $900/month rental will make people want your 2/1 a lot more than that other guy who is also charging $900/month, but doesn't have one.

Topic.

I remember a deal my dad tried to make where a 4 plex was for sale in central florida for $110,000, and it needed maybe $20,000 in repairs tops. The catch was that there was no hookup for the washer/drier units. Each unit was a 2/1.

Long story short, a much better deal showed up, and someone else offered $115,000 so he had to walk away from that deal. Looking back, we were glad that it happened. The deal from beginning to end felt a little like straw-grabbing for a new deal.

always assume that big claims are baloney, but research and inspect anyways

the real estate game is won by acting like you weren't born yesterday (because you arent)