Tag Archives: Florida hotel

First Time Owner Buys Florida Hotel

Our client was ready to be a first time owner of a hotel.

He had already successfully owned and operated several fast casual restaurants. Now he was ready for the challenge and the potential opportunity of a Florida hotel.

Our client had been looking for properties in the west coast of Florida for a while. He knows that market well and it is close to where he lives. He was keeping his eye on several hotels that were rumored to be going on the market. When they became available, with our advice, he made a competitive bid which was accepted. Now, he just had to close by the seller’s timeframe.

A first time owner needs a little more attention. Rick Patel and Krishan Patel worked closely with the client, along with Keren Alpert, our loan processor. We advised him on setting up his corporation. We recommended that he bring in an experienced minor partner, at least at the beginning. We also were a resource in engaging legal counsel and insurance.

The partnership group coalesced and the loan closed. Our client told us, “Thank your team for all the help during the process”. His hotel is ready for the Florida high season.

Tips for First Time Owners:

• Stay within your budget. Just because you are ready to take on this new challenge, don’t feel pressured to spend more than you are able to. As exciting as new ownership is, affordable ownership is your goal.

• Engage your attorney and accountant. First time owners are wise to assemble a team of professionals in addition to utilizing your GRP team. Do not try to save money by serving as your own attorney or accountant. Accountants needs to be on board to provide monthly updated financial reports for any businesses you own. Lawyers can help you in negotiating with the seller (and their lawyer), as well as prepare and review documents and make any necessary changes to agreements.

• Start working on obtaining insurance right away! Obtaining insurance is not super fast for new properties, especially in certain coastal areas. Particularly if you require flood insurance, begin that process as soon as your PSA (purchase sale agreement) is signed. Sometimes you may also need life insurance either because you are a key employee, or because of a collateral shortfall. It can take weeks to obtain the life insurance policy and assignment, so begin that process right away as well.

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.

All Weather Focus: Loan Closing No Matter What

Sometimes a loan closing poses unexpected challenges.

Our Florida-based clients were used to Florida weather.

But they weren’t counting on a hurricane during the underwriting process.

GRP Capital stayed focused during the entire loan process , as loan closing was the key to this refinance and partnership buyout.

As it turned out, the property had minimal damage and only suffered from some short-term power outages. The storm, however, delayed the appraisal and Environmental Site Assessment (ESA) reporting. When there are large storms, appraisers and environmental engineers are in high demand.

GRP Capital stayed in touch with the lender, the clients and all of the third party vendors to make sure everybody prioritized this closure.

GRP Capital President Rick Patel worked closely with the clients and the other stakeholders, too. Rick noted, “This loan closing was very important to the client partners. The ownership of the hotel had changed and we needed new financing with correct guarantors. With our guidance, the loan closed in a reasonable time, despite rather challenging circumstances in the region.”

What to do if your Property Has Damage from a storm?

• Communicate with your lender or ask GRP Capital to: Lenders and borrowers are not adversaries, but business partners in a way. Lenders deserve to know if your business has sustained damage, which will affect your bottom line. Lenders can be your advocates. Helpful lenders can suspend payments, extend a loan or even restructure a loan to include repairs that won’t be covered by insurance.

•  Combine storm damage repair with a PIP:  Believe it or not, storm damage can actually be an opportunity. If you have always wanted some renovation, consider the timing. Renovating during repairs might save you money. .

•  Hire an attorney: An attorney can work with your insurance company to protect your interests. He or she will also review any contracts. Most importantly, attorneys will remove any liens that are placed on your property during the repair process.

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.

Florida Beach Hotel Loan Closes

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.