Posted by zach on October 11, 2006 at 12:59:34:
I’ve sent you an email…
HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Harry
Posted by Harry on October 11, 2006 at 24:13:47:
We are planning to invest in a property in Dallas Tx for $2.2mm. The property needs a rehab of approx $1mm as both exterior and interior needs to rehab and A/C unit needs to be replaced. The project finally will cost$3.2mm. It is already flagged by a franchise with minimal fee of $2500.
The rooms are 173 just very close to the airport. Currently in as is conditions 82 rooms are occupied with an ADR of $25. Our anticipation is with renovations atleast 120 rooms will be occupied with minimum $45.00
Approx $8000 mthly rent is coming from the bar and restaurant. With banquet halls we 're projecting annual gross of $500,000. I’m taking 75% expense without mortgage & taxes/ins is it realistic? Also need an expert opinion
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Will
Posted by Will on October 13, 2006 at 02:12:42:
I hope it’s not the BW off I35.
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Michael Dolan
Posted by Michael Dolan on October 12, 2006 at 13:48:44:
This is the kind of assessment your mortgage source should be making for you. Once you sign a letter of committment to one funder, that person will use computer software to give you an exact picture of the situation
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by zach
Posted by zach on October 11, 2006 at 24:39:56:
What do you mean by this? Please clarify…
“I’m taking 75% expense without mortgage & taxes/ins is it realistic?”
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Harry
Posted by Harry on October 11, 2006 at 24:53:02:
It means that my total expenses to run this hotel will be approx 75% of the gross revenue and that too without the mortgage, taxes & insurance. Am I calculating it correctly or not?
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by zach
Posted by zach on October 11, 2006 at 01:12:16:
are you saying your annual expenses are $375k and that’s not even including the mortgage payment?
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Harry
Posted by Harry on October 11, 2006 at 01:26:43:
Lets say if I’m able to rent 100 rooms (initially)and avg ADR of $46= $138,000 + $8000 from restaurant/club+ $41,666 mthly banquet halls.
The mtg payment will be $42,000 mth on 3.2mm loan.
Gross revenue mthly:$187,000
Then my q’s is how much approx expense should I calculate. According to the seller banquet halls the expense is 25% rest is your profit. But how much shouldI calculate the other expenses? Is the property worth for $2.2mm before renovation and $3.2 after renovation. Please give me your best advice
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by zach
Posted by zach on October 11, 2006 at 01:42:11:
How about asking the seller for an expense operating statement for the last 2yrs. $42k/mnth on a 3.2mil loan seems quite steep.
Re: HOTEL INVESTMENT/Need Expert Advice!!! - Posted by Harry
Posted by Harry on October 11, 2006 at 12:39:19:
The 42K mth includes mortgage/taxes &insurance. The operating expense willbe on old #'s. The mortgage is calculated after the renovation/construction loan. The rate is amortirized for 20 years at prime+1.25%