Financial Breakdown of a Small Hotel & Why Small Hotels Can Have Massive Cashflow!

Here's an actual hotel deal by one of my Mastermind members - Johannes Urpelainen.

$620,000 purchase price

$200,000+ gross potential

I estimate that the Net operating income on that $200K+ gross is around $80,000/yr.

What about his cashflow? At 80% LTC (loan to cost) and 6.5% interest (I am assuming interest only), his debt service is...

80% x $620,000 x 6.5% = $32,240

Therefore his cashflow is:

Cashflow = NOI - debt service

= $80,000 - $32,240

= $47,760

At 20% downpayment ($124,000), that means, the cash on cash return on this hotel once it's stabilized is a whopping...

$47,760/ $124,000 = 38.5% cash on cash return!

In other words, Johannes would get his money back in just 2.6 years! Then everything after that is pure profit.

That beats the cash on cash return on my larger hotels. So don't underestimate small hotels for their yield can be MASSIVE.

How do you find hotel deals like these?

What about I give you 20+ sources of hotel deals?

How do you analyze hotels to determine which hotel is worth acquiring?

What about I give you our Hotel Analyzer and have one of my analysts analyze hotel deals with you so you don't get into a bad deal?

How do you finance hotels?

What if I give you the lender that can do this for you?

How do you operate a hotel?

What if I give you good hotel operators so you don't have to manage and operate the hotel yourself.

But how do I get the downpayment to buy hotels?

What if I show you 5 ways to buy a hotel with low or even no money down?

Or if I like your hotel, what if we partner on it?

All these and more will be discussed during the HOTEL Investing Masterclass tomorrow, Thursday, April 6.

Comment below to get the Zoom link. It will be the last Hotel Investing Masterclass I am having...so do NOT miss it!

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