All Forum Posts by: Patrick Philip

I want to get into hotel investing, but I don't want to be on site all the time. I notice some hotels have the owner on site every day, while others do not. I want to buy a hotel where I can hire managers to be on site.

What is the main difference between these two types of businesses? Is it just a matter of size? The larger one can afford to pay managers because they take in so much more revenue? Is it ever possible to convert a "mom and pop"into a hotel where you hire managers?

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Did you purchase it as-is? Improve it? Build from scratch? Is it flagged or non-flagged?

Do I have to build a hotel to the specific companies specifications if I want to flag it? If so, doesn't that mean I'm kind of "stuck" with one company?

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Here are two examples of the type of thing I'm talking about...

1. I was the property manager of a trailer park beginning in April 2015. When the new owners bought it, they had to get a permit from the Health Department for a Mobile Home Park. When we went to do this, we were informed that we were unable to obtain this permit until we move all of the trailers at least 5 feet off the fence. The previous owners had been exempt from this due to a grandfather clause. How would we have been able to know that ahead of time?

2. I recently got a listing from a wholesaler of an apartment complex being sold off-market. In the listing, it said that the County was making them put in 2 new parking spaces before allowing anyone to live in the complex. The only way I know this is because the wholesaler told me in his listing. But what if he did not?

Is there any way to know these type of specific things ahead of time?

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For single family residential. I've seen FHA purchases with periods of just 30 days. So is there any good reason to ever go longer than that? I would preferably always like to close as fast as possible. Is there any reason I shouldn't be able to get it done in 30 days every time?

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Originally posted by @Steve Vaughan:

It sure is common here. The standard PSA has a blank space in the financing addendum.. Seller To pay $____________ towards buyers borrowing costs and pre-paids. Of course they put in $4,000-$5000.

The first one I sold got me. My other 2 I specifically stated if they had a realtor or wanted an assist to add them to the price. They did!

I noticed the first time several months ago, the realtor tried to sneak it in like I wouldn't notice.

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I got a potential buyer, but he says he wants me to pay half his closing costs. He says he's deciding between my house and 1 other, and the other seller is willing to do this. Honestly, I probably will because I just want to get the equity out and move on to the next one. This house was built in 1954 with exterior wood construction. I should have never bought it.

But this is actually the second time I've been asked this. Every potential buyer I've had has been an FHA buyer, so maybe they are scratching themselves thin to be able to afford the houses, so is this something I should expect in the future?

Maybe in the future, I'll buy houses that are newer and will generate so much interest that I won't have to worry about shortage of potential buyers so I can have more leverage.

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Originally posted by @Jim Adrian:

Originally posted by @Patrick Philip:

Originally posted by @Jared W Smith:

Originally posted by @Bob Okenwa:

As long as there are the proper markings for plumbing, room dimensions, electrical, HVAC, footers, windows, etc. it should be sufficient. You'd probably have to have the plans set on a plot map to show the dimensions of how the home would sit on a property and what the setbacks would be to see if it met city regulations before construction began.

All in all, you'd more than likely have to meet with someone in the planning department of your city and submit the floor plan, your permit application, and your plot plan.

Actually No. Depending on where you build (excluding rural areas where building rules are very laxed) the building department will not accept generic building plans and a plot plan/site plan. Generic plans are possibly a starting part, if the plans are very good/detailed. Most building departments aren't going to be able to hold your hand through the process especially for a commercial building. They will give you general info on their permit process and point you to the building codes and zoning ordinance. You will have to decipher what's required and produce it or more than likely engage and hire an architect/engineer.

I called an architect this morning. He quoted me at $1.50/sf. For an 1800 sf house, that's $2700, which seems like a good price to me.

But in the case of a large hotel, which might be 90,000 square feet, that would come to $135,000. Is it normal to have some sort of "bulk discount?" Maybe get that number down to $40k or $50k? Especially if most of the rooms are identical, or if the hotel is built with modular construction?

An architect won't touch a hotel for $40k and if he does that's the last guy I want on the project. Either they are cutting corners and you will be in trouble during construction or a lot of things will be out of scope of work and will be asking for more money.

Hotels are typically built by chain companies ie Holiday Inn. Those companies come with their own set of plans to be site adapted. This is part of their brand identity. You simply can't build a generic hotel and have a company take over. This only works for a mom and pops place to my knowledge. But I could be wrong.

My quick dirty math says 135k is a good price and to take it. One thing people don't realize is how long it takes to create "The Specification Book" aka "Project Manual" for the contractor. Typically I start with 30 different spec sections (architectural only) on project. I budget 1.5 hrs to edit them and this is lean. This translates to how fast can you read 800 pages? Can you research product information, make decisions and edits all in 45 hours. That's just over 3 minutes a page on average if you are following along at home. The architect is responsible for about 65% of the project specs. This excluded Division 01 specs handled by the project mgr or the architect.

So you're saying it's unlikely that a major chain would let me flag my hotel with their brand unless it was built to their specifications?

I'm not sure if I would have wanted to do that or not.

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Originally posted by @Jim Adrian:

Originally posted by @Patrick Philip:

Originally posted by @Jared W Smith:

Originally posted by @Bob Okenwa:

All in all, you'd more than likely have to meet with someone in the planning department of your city and submit the floor plan, your permit application, and your plot plan.

I called an architect this morning. He quoted me at $1.50/sf. For an 1800 sf house, that's $2700, which seems like a good price to me.

Yea I suppose $135k sounds like a lot, but when you consider it would probably take over $10 million to build a 90,000 sf hotel, it's just a drop in the bucket.

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Originally posted by @Jared W Smith:

@Patrick Philip

1- Your architect is talking about construction cost which usually doesn't include Architecture/Engineering fees, land acquisitions, Building department fees or holding cost. ALSO.. it's not $1.50/SF.. it's $150.00/SF. This is an average based on the locale/state. SO that's $270,000 to build a 1800 SF house. Architect/Engineering cost is a different animal.

2- I think you're missing my point and putting the cart before the horse. You are far removed from really talking about pricing. You have much to understand about the industry and construction first.

No. He said he would draw the plans for $1.50/sf. He was not talking about construction costs.

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Originally posted by @Jared W Smith:

Originally posted by @Bob Okenwa:

All in all, you'd more than likely have to meet with someone in the planning department of your city and submit the floor plan, your permit application, and your plot plan.

I called an architect this morning. He quoted me at $1.50/sf. For an 1800 sf house, that's $2700, which seems like a good price to me.

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All Forum Posts by: Patrick Philip

Patrick Philip has started 262 posts and replied 908 times.

Post: Main difference between mom and pop hotels versus larger hotels?

Post: Anyone here own a hotel?

Post: How to run due diligence on specific things?

Post: What is a normal closing period?

Post: Common for buyers to request seller to pay part of closing costs?

Post: Common for buyers to request seller to pay part of closing costs?

Post: What's the first step to building something?

Post: What's the first step to building something?

Post: What's the first step to building something?

Post: What's the first step to building something?