It is acctually a Motel/Hostel having 11 Motel units and a 60 bed hostel.
The deal is financed at 6.5% for 30 years with a 2 point fee.
The Lender loves the idea all I had to do was show him the 5 year projections. The key to this property is it was bought to be torn down to build condos in 2004. The plans to build the condos took 3 years to get approved by the local Gov. By that time no one wanted to invest in the condos as property values were droping. The Property was just running, No advertising, Deffered Repair status, and only operating from 9am – 9pm at night. The Motel Part runs great at 80% but the hostel runs at a low 21% rate occupency. The plan for the Hostel would be to go on 2 year marketing campaign to raise occupency. If that fails I will start closing down Hostel rooms and converting them over to Motel rooms. The current owner started to fix the property up and has it starting to raise in profits it currently grosses about 588,000 a year. Neting about 275,000 of that. But as I said before the area which the Motel is located is in PRIME tourist area.