All Forum Posts by: Michael Greenberg

Research Update:  As an exercise in viability, I have a meeting with a friend of mine who is a CEO of a national bank this coming week.  My goal is to provide him with a financial package of my business with 3-years history and pitch him on selling the business (which would include the real estate).  The goal is the likelihood of obtaining financing for an investor that might want to buy the business.  My thought process is similar to your mention @Benjamin Vail, that selling the business (an LLC) is the correct model, not selling the real estate and hoping the STR is worth something as a separate transaction. To be fully transparent, I will disclose challenges for securing the financing - Understanding local regulations, requirements, and HOA's (this is some heavy lifting). DTI requirements and FannieMae regulations for securing the RE. I will post these results once I have completed this exercise.

 Nice find Andrew, thanks!

Sure Tim! I had an IT Services business for years and had to be strategic when I sold it. I believe this holds true for the business we are currently in. I'm a total data nerd and track my rentals down to the penny. I capture as much information from my guests as well so I can market to them directly, as well as "sell" this when the time comes. I've been working on a set of KPI's (key performance indicators) for my business (by the way occupancy is NOT one of them). I haven't heard back from my CPA yet. I'm sure he's in the throws of tax season, but he's also an STR owner and a creative thinker. I'll post an update here when he reaches out. Cheers and let me know how it goes!

 I believe your distinct knowledge of your marketplace (licensing, restrictions, "hoop jumping") is an advantage and could separate you in an M&A environment Tim.  Think if the "spin" you could put on your RE business.  These "hoops" could be your differentiator.  

Nice posting Lucas!  Thanks for the idea, never hurts to have additional resources.

@Carmen Costescu and @Benjamin Vail You could sell them separately, but wouldn't it be nice to sell the property with the business, e.g., it would be a business sale.  There are business brokers in just about every marketplace, it would just take someone that understood the value of this type of business.  Businesses typically sell for a multiple of "X" (some number).  I sold a business that was 4x EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) but I'm thinking this model may not work.  I'm going to pass this by my CPA and see what he says.  

@Benjamin Vail How are you going to have the property appraised at a 5% premium as @Andrew Narsi indicated?  I sold a property last year that the lender wouldn't allow "furnishings" on the mortgage, so the buyer ended up writing a less than 5% check for these items.  I think there's a model to do so successfully, but I'm not sure it involves bundling the "business" into the real estate.  I would think there is a lot of value in selling the "business", possibly as a multiple of IBITDA or some other model that has yet to be determined.  It might narrow the field of buyers, but they must exist.  I would be interested in having a group discussion about this if there are other interested parties.

Airbnb has been pushing "experiences".  BIZARRE!

Hi @Chris Blackburn! There was just recently another posting under this link by another user who was interested in containers, but I believe is now looking to TH's. I ABSOLUTELY LOVE THIS IDEA and I'm looking into it myself. My challenge has been locating desirable land in desirable locations that have limited restrictions (but I've just started looking). I have STR's in Scottsdale now, reside in Denver. Maybe we can have a conversation as I think we're in similar stages of this idea. I'm going to request a connection with you so we can share some further ideas/details.

Mike