Motel Loan Financing
Motel financing is a niche specialty. Most lenders do not want to do them because of the higher risk involved. It is extremely important to do an extensive due diligence before buying a motel Also these businesses are very difficult to run absentee unless you have solid experience in the industry. However with good management and lots of hard work these businesses can be very profitable. Motels are typically priced on the Ratio of the Price to the Gross Yearly Revenue. This ratio can range from 2.5 to 5. Obviously you want as low a ratio as possible. In high demand areas like Nationwide and New York these ratios will be closer to 5 and get lower as you go to other areas. Another important factor to look for is the ration if Operational Expenses to the Gross Revenue. Around 50% and lower is a very healthy ratio. Condition of the property, trends and quality of management are other factors to look for.
Down payments for purchasing a motel can be as low at 20%. It is extremely important that the Buyer have direct or related experience. We do an extensive analysis of the property and the Buyer qualifications and have some excellent resources for these loans and are able to offer motel loan financing because we had been so long in that business and we know how to get motel properties for very good prices and that helps the buyer to be able to pay the loan quickly and of course it is easier to get motel loans sold with under market price tags.
Motel financing is not so easy and you need an experienced broker to help you with a professional loan packaging and representation. We pride ourselves that our quotes are better than other brokers in nine out of ten cases. After receipt of a complete package we can get you a pre approval within a few business days. In case there are problems with a deal we let you know upfront so you do not waste your time. Unlike most brokers we do not charge any upfront fees.
Do not waste time on negotiating a contract only to find that there are problems with financing. I can analyze these deals upfront and give you some good advice. We will also offer you different solutions to finance your motel and this depends on your financial status and your experience in that particular market. We fund NATIONWIDE. Please call me for a no cost no obligation consultation at 707 355 0642.