Extended Stay Motels--bust Or Boom?

does any one have experience or knowledge in the extended stay motel business model?

[ Edited by rphonthego on Date 11/16/2007 ]

Comments(4)

  • commercialking7th November, 2007

    Well a couple of questions first.

    How much money do you have now? Is this $200,000 in 9 years starting from a balance of $0 or is there some investment fund now?

    The second question is give us some idea of your current financial condition. Employee? Self employed? Annual income? Do you own the house you live in? Do you have other investments?

  • cjmazur8th November, 2007

    I would think that w/ 21K you could get some form of fractional ownership.

    Make sure your investment is liquid and or for a fixed timeframe.[ Edited by cjmazur on Date 11/10/2007 ]

  • rphonthego17th November, 2007

    the rental market in dallas, tx for SFH is good. buy a SFH 3/2/2; 20 to 30% under market; buy at a price you can get 200 to 300 net (in your pocket) every month; keep in mind rents under 1000 a month will be leased more quickly;

    for example: house valued at 100,000
    sale price 70,000
    down+rehab+closing 10,000
    200/month * 12 = 2400 net profits/ year
    2400/10,000 = 24% cash on cash

    in nine years you will have 30,000 + principle pay down
    and 2400 * 9 = 21,600

    (right now you have enough to buy 2, but buy the second only after the first has been rented)

    if you save as much as you project, you can buy 1 or 2 a year, and in 9 years you will have a lot more cash than 5% a year.

  • commercialking18th November, 2007

    Well for starters forget about 5 to 7 caps, those are excellent investments for people who already have a lot of money.

    Think about how active you want to be in the management of this property. Many of the investors here are very hands-on and their advice tends to reflect that orientation but i have the intuition that you want a more passive situation.

    Partial interests may be the correct formula for you. Find a hands-on guy to invest with who needs money or credit and partner with that fellow in one way or another.

    No need to wait 10 years to get started. BTW if you think poker is actually good training for the stock market you probably should read THE INTELLEGENT INVESTOR by Grahm and Dodd.

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