Conversion Of Motel To Youth Hostel ... Buy Out Current Tenants?
I am considering purchasing a local motel and converting it to a youth hostel.
Since the property is up for sale by owner ... what does this mean for the potential buyer? Do they have to buy out the current tenants on the lease? (The motel is currently run as monthly apartment rentals). I suppose I shoud have a conversation with the owner to find out how long the leases are for each individual tenant.
Given that the leases are short term ...what are some creative financing options I sould use to get this prjoect underway? I'm thinking something like a master lease option with an option to buy might work in the beginning, until the hostel starts generating enough income to help pay for the purchase. The asking price is around $165,000.
There would need to be some modifications to the property to fit the American Youth Hostels' guidelines. I would need to figure out estimates on that (see a local contractor?) Plus, costs of purchasing rights to use AHI's name and reservation system.
This will be my first market study... so --short of visiting the small business center at the local university ...anyone have any tips on these types of "motel" properties? Never put together a market study for one of these.
I gladly welcome helpful suggestions/tips from anyone with experience in this type of commerical property.
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