Half Way Motel

Is this a good deal to buying a motel?

A 10 unit motel with a 2 bedroom home for $120,000. No renovation needed. If it is a good deal should i get it and will the bank give me a loan if i already owe them $250,000 off of a loan on my house

Public Comments

1. A good deal and a positive cash flow are 2 different things. Take a look at the books. And Business loans are handled a little different then Home loans, but the bank should give you a loan if the business is making money and your current loan is paid on time. It's considered an investment property. Good luck!
2. You need to see the financial records of the hotel. Does it bring in enough rental to pay a 120,000 mortgage, utilities-including cable TV, insurance, plus grounds maintenance (lawn care, snow removal), plus being able to pay labor to run the place, including housekeeping (24hrs a day?), plus taxes and benefits for those employees, plus a resonable profit??? Are the room rates in line with other hotels in the area I would ask for financial statements prepared by a CPA for 3 yrs and ask to see tax returns for 3 yrs and bank statements so you can make sure everything reconciles and no money looks like it's hidden. As for your home mortgage, would you be moving to the house at the hotel and selling your old house? Would you be running the hotel, or hiring someone to run it and live in the house? These questions would affect the decision and ability to get the mortgage. What kind of people stay there now - businessmen - which would mean pretty regular occupancy year-round, or is it a vacation spot near tourist area where you will only be busy in summer or ski season in fall. Important points to consider