Category Archives: Case Studies

Colorado hotel loan; repeat client buys nearby property

We were happy to close a Colorado hotel loan for a repeat client of ours. This partnership group has found success in the Mountain states. They were eyeing a property not too far from a successful hotel that they previously purchased with a GRP-supported loan. In addition, they discovered that there was an absentee owner. Savvy business owners often target businesses held by out-of-town owners as potential purchases. Often, these properties can be extracted for more revenue. In this case, our clients will be able to manage this hotel along with their other hotel, pooling staff and using similar operating procedures.

GRP Capital Managing Director  Krishan Patel led our team to close this loan. Patel stated, “I know this client group well, as we have closed loans with them before. They are excellent business owners and managers and know the hospitality industry very well, particularly the Colorado hotel business. We supported them through the challenges of purchasing from an out-of-state owner. Now they are ready to have even greater market penetration with their two nearby properties.”

Things to remember when purchasing from Absentee Landlords:

• Who knows this business the best? Out of state (or country) business owners vary in their ownership style. Some really understand all of the properties in their portfolio. Others defer to their management team and know very little. If you are considering purchasing from an absentee landlord, determine if they know their business well and if not, get the contact number of the person who does.

•  Determine property condition Again, depending on the style of the owner, properties without ownership nearby can have deferred maintenance issues. Utilize the appraiser or even your own third party hires to determine the property condition. Be sure to include any needed renovation or upgrades in your loan package, especially if completing these would lead to greater revenue.

•  Get a solid understanding of the financials Even before potential lenders underwrite the loan, you should have a good sense of how the business is doing. What are its challenges and strengths? What kind of management is needed? Most importantly, will you be able to give the attention and oversight needed to make this business profitable?

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Self Storage Units are Strong Investments

A self storage loan may be a good fit for you and your business portfolio. What are some reasons that lenders are eager to fund purchases, refinances and even construction projects for self storage? We have even been successful getting cash out with a recent refinance.

A Self Storage Loan is a great bet right now.

• Self Storage facilities tend to be easy to maintain. Unlike homes and other businesses with more complex infrastructure, self storage facilities are designed for stuff and not people. There is limited water onsite. There may be a mix of temperature controlled units and those without. Even the electricity can be very minimal in these units, typically to prevent renters from doing projects onsite and spending too much time onsite. The most critical components of maintenance are typically security and lighting.

•People need storage during lifetime transitions.  Most people need some sort of storage options at some point. Whether customers are downsizing, moving to retirement communities, taking over the belongings of a loved one or changing locations for any reason, changing jobs or moving in and out of university settings, self storage is an affordable short term solution. Therefore, every community needs storage options of a variety of sizes and types.

• People store for longer than they anticipate. Storage customers typically rent as a stopgap measure. However, they tend to underestimate how long they will require storage. In addition, storage is so easy and the prices can be quite competitive. As a result, short term solutions often become long term patterns. This is great for owners!

Self Storage Upgrades:

If you already own a storage business or are looking to purchase one, there are some key upgrades that add value to the company:

  • Setting up automated security. Security is one of the key expenses and the most important amenity for most renters. Gate security and onsite cameras protect your investment and make your renters feel safer.
  • Enabling features that facilitate timely payments: There are excellent platforms that remind customers by text and email of upcoming payments, utilize an app to make payments and help customers set up automatic payments. These features increase on-time payments and do not require staff intervention to track down regular on-time renters.
  • Climate control. Depending on the marketplace, there may be a demand for a certain mix of climate control units. Upmarket storage may also include humidity control, even more secure locations and special units for vehicles.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Self Storage Loan Closes; Cash Out Too!

Congratulations to our Texas client who recently refinanced his self storage loan. He worked closely with Senior Associate Ryan Dumas and the rest of our team.

Ryan Dumas enjoyed getting to know our client, who managed to fit in getting us documents quickly, despite a very busy work schedule. Ryan noted, “I was very pleased that we found a great match for this self storage loan using our lender network. We found a competitive loan with fixed rates for a ten year note. My client got a decent amount of cash out, just from the terms of the loan. But even better, when the appraisal results came in and they were so favorable, we worked with the lender and got even more cash out! My client has lots of plans to continue to maintain this business and preserve his profitability. ”

A Self Storage Loan is a great bet right now. Why?

• Self Storage facilities tend to be easy to maintain. Unlike homes and other businesses with more complex headquarters, self storage facilities are designed for stuff and not people. There is limited water onsite. There may be a mix of temperature controlled units and those without. Even the electricity can be very minimal in these units. The most critical components of maintenance are typically security and lighting.

•People need storage during lifetime transitions.  Most people need some sort of storage options at some point during their live. Whether customers are downsizing, moving to retirement communities, taking over the belongings of a loved one or changing locations for any reason, changing jobs or moving in and out of university settings, self storage is an affordable short term solution. Therefore, every community needs storage options of a variety of sizes and types.

• People store for longer than they anticipate. Storage customers typically rent as a stopgap measure. However, they tend to underestimate how long they will require storage. In addition, storage is so easy and the prices can be quite competitive. As a result, short term solutions often become long term patterns. This is great for owners!

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Texas RV Park Purchase and Upgrade

GRP Capital is pleased to announce a new loan for the purchase and upgrade of an RV park. This facility is located in Southeast Texas.

Our GRP Capital team worked closely with his client, helping to facilitate the financing. Managing Director Krishan Patel said, “The borrowers were great to work with. They are experienced in this sector. With this purchase, we are helping them expand their portfolio. Our entire GRP Capital team consulted with the clients. We worked diligently to steer them towards a loan that matched their financing needs. Even better, we are making plans for the clients’ next acquisition.”

Why an RV Park is a Great Investment:

• Current Travel Trends: Tourism trends in the United State are favorable for RV park usage. Americans are favoring driving over flying and are anxious to arrive at far-flung destinations.

• Pandemic-Proof: Travel in a recreational vehicle or camper and lodging at an RV park make sense during our new normal. An RV park allows for sociability outside, while protecting vulnerable people from overexposure.

•  More opportunities for market penetration : While there are multiple hotels at many highway exits, this sector is not as crowded. An RV park with updated amenities can capture market share. This requires effective marketing, excellent management and maintenance and good decisions on what amenities drive occupancy.

•  Lenders Like RV Parks : Lenders, particularly SBA lenders, look favorably on this sector of hospitality lending. As a result, GRP Capital can find matches for qualified borrowers.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Texas Hotel Owner Closes High Leverage Loan

Our clients already owned a Texas hotel. They were ready to purchase another Texas hotel in the northwest part of the state.

They really wanted to minimize their equity injection.

Each of our clients have different needs. Some are more rate-sensitive, some clients want loans with lenders who will become their primary business relationship. And some, like these clients, are looking for a high leverage loan.

Our GRP Capital Team worked closely with the clients. Managing Director Krishan Patel noted that he was proud of the sensitive guidance during the negotiations of the purchase and sale agreement. He also helped his clients prioritize the aspects of the new loan that were most important to them. “I was pleased that we were able to match these clients with a loan that met their needs. They have great experience in the hospitality industry. As a result, they will maximize the profit of their new hotel. Their ability to keep their equity injection manageable was a critical component of the loan. I look forward to working on other projects with them, as I know their situation and goals well.”

Best Practices for Organizing Your Equity Injection:

During underwriting, the clients worked quickly to provide evidence of their equity injection. The equity injection is the “money down”. If you are contemplating a new loan (not a refinance), here are some tips regarding equity injections.

• Sufficient equity: The lender will require bank statements or statements from stock accounts. These statements must show enough money. Just before closing, clients transfer these funds via wire.

• Dividing it Up: Typically, all of the partners participate in putting money down. Ideally, the equity injection is divided up proportionally among the partners. Most buyers contribute towards the down payment, matching the percentages of ownership.

•  Clean sources of equity : Down payments need to consist of funds that are “clean”. This means that the money has not been recently loaned to you. As you are choosing which accounts will be the source of your equity injection, choose wisely. The lender will “source” any large movements of money into an account (typically more than $1,000). This means you will have to tell the lender where the money came from and often provide a statement (or several) from the source of the transfer.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

Adjacent Hotels: A Great Business Plan

Our south Texas client recently purchased adjacent hotels.

One hotel was a small, independent property. And on the adjacent property was a Best Western.

GRP Capital worked closely with the buyers, the sellers and the lender on two separate loans that closed on the same day.

Senior Associate Ryan Dumas shared his clients’ vision for the adjacent hotels. “My clients were poised to take ownership of these nearby properties. They will be able to continue to have excellent market penetration on the San Antonio to Houston corridor. They have solid business plans; having two adjacent hotels will make certain aspects of hotel ownership easier for them.”

The Benefits of Owning Adjacent Hotels:

• Reaching More Customers . When one business owner owns two adjacent properties, they have double the opportunities to attract guests. The two hotels can have different rate structures and different amenities (pet friendly or not?). In reservation aggregator websites and the websites for the two hotels, the business owner can differentiate and reach out to a greater variety of customers.

• Staffing Issues:  Many hotels are still struggling with finding and retaining employees. In addition, hotels that have a high and low season are sometimes unable to offer stable employment. However, owners of adjacent hotels can utilize one group of staff members to do the same work in two places, which guarantees more work and therefore greater job stability. The owner can shift employee responsibilities between the two properties as needed.

• Same system; different address. Experienced business owners quickly establish efficient business practices. Setting up employee protocols, cleaning regimens, checkin and checkout procedures for two properties is not appreciably more difficult than setting these up for just one location.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

From Renting to Owning: Client Now Owns his Office Space

Many of our small business owners want to move from renting to owning. We think, if it is affordable, now might be the time to make that decision. Rental prices for commercially leased properties are moving up in many markets. Transforming from renting to owning allows you to control your bottom line. Your mortgage payments will remain relatively constant, depending on the terms.

Our client was renting his suburban Dallas office space. He was ready to make the move from renting to owning. However, he had never purchased commercial real estate. Our team, along with Business Associate Niraj Zaveri, worked closely with him to make the process as transparent and smooth as possible.

Is this the time to move from Renting to Owning?  

• Lease payments vs. mortgage payments : We will help you compare what you currently pay in leases to what your potential mortgage payments might be. GRP Capital finds a variety of lenders and presents clients with several different options for financing. Clients can then compare all of the aspects of these term sheets before making a decision. We help crunch the numbers so you can determine what is best for you. We will also try to forecast what your future lease rates would be if you continue to rent. Will you have additional space to rent? If so, we will help you determine a reasonable market rate for that income.

•  How Long will you be occupying the space?: Changing office locations can be disruptive to your core business. In addition, making plans to “flip” office space may not make sense in every situation. If you are planning to stay in the office for a while, you will realize greater financial stability. This gives time for the start up costs and any equity injection to be offset by lower payments.

•  What do you have in Place to be an Owner? When you become the owner of your office space, you will have more responsibilities. These include taxes and insurance, but also maintenance and upkeep. Do you have the time to take on these additional responsibilities or have you created a team to take these on? Ownership should allow you to take control of your office space and your payments, without taking you away from running your business.

Niraj Zaveri on closing this loan stated, “I was thankful that my client could work with the experienced GRP Capital team. He was nervous as a first time commercial real estate owner, but we were able to guide him from receiving term sheets to closing and funding his loan.“

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer or refinancing a current loan, we can assist you.

Tip for smooth closing: partner with professionals

Everybody wants a smooth closing, including our GRP Capital team! GRP Capital recently closed a loan for a purchase of an 86 unit franchised hotel on the west coast of Florida. GRP Capital Managing Director Krishan Patel as well as GRP Capital President Rick Patel worked closely with our client. They also worked with his team of highly competent and trusted professionals. As a result, we closed quickly and without too many hiccups.  

Smooth Closing: How we can partner with your professionals: 

• Accurate and Appropriate Financials : While many small business owners prepare their own financials, lenders prefer professionally prepared financials. For this loan, we worked carefully with our client’s CPA. Together we analyzed the financials of the hotel being purchased. We also pre-underwrote the financials of various businesses owned by our client. We wanted to show the lender the true potential revenue value of the hotel. In addition, we demonstrated the ability of our borrower to make payments on a new loan.

•  Saving Our Clients Time: The lender requested many documents. Being able to work directly with the CPA allowed our client to run his businesses. Furthermore, he trusted us and his CPA to work on his behalf. As a result, he didn’t have to be involved in every email or conversation.

•  Excellent Attorneys Make for Excellent Closings:  We notice that having a trusted attorney at closing makes a difference. They look out for our clients’ interest and are able to amend documents quickly. If necessary, they can run title and even escrow funds. We recommend that all of our clients engage an attorney. Clients are often spending a lot of money when seeking financing. Paying for an attorney is an investment towards a smooth closing and protects client’s interests.

Rick Patel upon closing this loan stated, “We know this client well and have worked with his professional team, too. They are very responsive to our phone calls and e-mails not just from me, but from Keren Alpert, our loan processor, too. As a result, our client trusts that we are doing the work in the background, so he can run his business.“

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer or refinancing a current loan, we can assist you.

Independent Texas Hotel Loan Closes

Our clients were ready to purchase a small, but profitable independent Texas hotel. It was adjacent to another franchised hotel, which they were also in the process of purchasing.

GRP Capital worked closely with the buyers and sellers. We paid particular attention to the specialization required to obtain loans for independent properties.

Senior Associate Ryan Dumas was pleased to close the loan. He remarked, “This independent Texas hotel is perfect for creating two market price points for my clients. The loan is affordable and stable and will allow them to continue the profitability of the current hotel.”

Special considerations regarding Independent Hotels:

• Hotel statistics . Franchised hotels utilize reservation and check-in systems that generate hotel statistics. These statistics include occupancy, ADR (average daily rate) and RevPAR (Revenue per available room). Independent hotel operators may or may not utilize sophisticated programs. Thus, generating this important information (needed by both lenders and appraisers) can be a challenge.

• Sales and Occupancy Tax Records Required:  Most independent hotels do not participate in STR reporting. In addition, they are not using franchise check-in software. As a result, it can can be difficult to ascertain their revenues and profitability. Lenders and appraisers will accept two different third party reports: either business bank statements or sales tax receipts that show the revenue basis of monthly occupancy taxes. Sellers of independent hotels should be prepared to provide one of these sets of documents.

• Financials. It’s our job at GRP Capital to comb through seller financials. We want to make sure they match up with the hotel statistics and the taxes. Then we can provide a very clear picture to lenders and appraisers. We want all of the stakeholders to understand the current profitability of a property and its potential.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

GRP Closes Liquor Store Loan in Arizona

GRP Capital is pleased to announce the successful closing of a liquor store in Arizona. Both Ryan Dumas and Vijal Suthar worked closely with our clients to close this loan. 

GRP Capital secured a fully amortized, 25-year permanent loan for the borrower. The loan closed with additional working capital in addition to covering all closing costs. 

Associate Vijal Suthar noted, “Our clients benefited a lot, because we already knew their business situation well. We had previously helped them apply for SBA emergency loans for their various businesses, loans that became available through the CARES ACT. As a result, we understood their situation, including some distinct complexities.”  Ryan Dumas added, “This new loan not only brought down our clients’ monthly payments, it also saved them six months of payments. Because we were able to close the loan prior to the SBA deadline of September 27th, the SBA pays for six full months of loan payments.”

Lenders are eager to fund liquor store loans, both purchases and refinancing. Liquor stores have continued to be profitable throughout the pandemic. They have required only modest modifications to assure the health of customers and employees. Most importantly, liquor stores have not experienced significant losses of revenue during the recent pandemic and many have actually increased their revenues, due to the limits and closures of bars and restaurants.

The GRP Capital team specializes in finding the right lender for each project. We save our clients time and provide options, as we research and apply for different funding sources. Our experience allows our clients to execute on funding within our proven lending network.

Closing this loan demonstrates GRP’s ability to secure funding for business owners in expansion even in these uncertain economic times. To be sure, business conditions are experiencing a “new normal”. However, business loans post-COVID 19 are possible under the right conditions.