Our clients were looking for a Florida beach hotel. When this one came on the market, they were ready to pounce. The hotel is on a small island with very few other hotels in direct competition. The clients have retained the current management. However, they have set up new incentives in order to increase occupancy and garner even better online reviews.
GRP Capital President Rick Patel worked closely with the buyers, as well as many other participants in the loan process. These included the insurance agent, the accountant and the various attorneys. Rick stated, “This hotel was a high value property because of its position in a limited marketplace and its potential for profit. With these larger transactions, there are even more details that we needed to be on top of. I was proud of our team for closing the loan as quickly as possible, locking in the interest rate. I know our clients are happy with their new business and are ready to capitalize on their acquisition.”
Issues Unique to Beach Hotel Loans
• Staffing and management : Some beach properties are far from affordable housing and some are not. Be aware that you will have to find staff who can afford to live within commuting distance. Some business owners are even reserving housing for key staff members as an added benefit.
• What’s the insurance claim history of the property? Many coastal properties have a history of moderate or even significant damage from storms and flooding. Find out about any recent insurance claims. Make contact with the current insurance agent to obtain a quote and compare that with any from an agent you are currently using. Make sure you factor in the insurance costs when you are evaluating financial statements and expenses.
• What happens during the off season? Many properties with high tourist occupancy have a high season and a low season. What is the occupancy “out of season”? What can be done to increase occupancy and maintain ADR?
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 for purchase, refinance and construction loans. 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.
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