We are in need of financing for a $16.9 mil hotel.
It's right off a major freeway.
Located 1.4 miles from the International airport, sitting on 5.4 acres. It has all the whistle's and bell's.
It's a half mile from a major sports arena and coliseum. And surrounded by 5 other hotels and numerous fast food eateries.
In addition, it has it's own large restaurant and bar.
Formely a Holiday Inn/Clarion.....Hotel is immaculate.
We come with high credentials

Everything else is in place, we just need financing in the range of $16.9mil
We have 10% down.

Oh yes........no "Up fronter's" please.......... Thanks anyway.

Assuming experienced operators/mgt co. will not be an issue. We handle these but most larger than $14 million are conduit/CMBS. Most of the conduit guys will issue a letter of intent or commitment subject to successful enviro/engineering examination for which you will be expected to be fork over the $10-20k cost upfront. If we can help you, feel free to email/PM state, acquisition cap rate, occupancy and RevPar. Thanks! Naj

Lattae,

I am new to the forum so this message may be a little out of date for what you need.

That type of loan is down the middle of the fair way. There will have to be an extraordinary story to get 90%+ financing on a construction deal for a hotel. If that is the case, there are 100% financing groups out there is cash is a problem. They can even offer partial or limited recourse depending on the sponsorship. Those types of groups are more expensive, but far less so than an equity partner. Without good sponsorship and a great story, 90% would be tough. If you are still playing with it give me a ring.

Thanks,

AM

Gail:

I would try a conduit lender associated with a hedge fund, but your first option is to restructure the deal away from that 90% Senior Loan request! - raise the purchase price or borrow against something other than the real estate.

I have lent my own money (not my company's money) on a hotel before. Plus, I have worked on well over 50 hotel loans and the process of attaining financing on a hotel has been proven with what works and what does not work.

Hotel loans may have guidelines similar to the following:

Purchase, Construction, or remodeling w/ SBA - 85% Financing of purchase price
Conduit Lenders (no VC, Hedge Fund, nor private money associated) - 75% Purchase, 70% Cash out (assuming it is a flag or franchise)
Banks - 80%+ Subject to an approval process and typically full recourse.

If the lender asks for non-refundable upfront fees, I would run. I would assume with any hotel lender, due diligence will be requested and "upfronters" are more common than you would think. However, the borrower should have a good lawyer that can recover escrow funds as these upfront fees should be fully refundable (subject to appraisal and third party costs already incurred).

Your loan will require creative financing.

Some creative ideas for working this deal may include:

-consider the overall value and negotiate the equity difference between the purchase price and the value so that a check is written out to the seller at closing if they are willing to issue a silen seller second,

-working capital for the business to be applied for real estate acquisition,

-other property of value inside the real estate,

-other assets of the borrower

Once a borrower asking for 90% breaks the $2MM-$3MM range, the deal gets a lot harder, especially if it is not apartments/mixed-use. The reason for this is that apartments are considered less risky as the tenants are there for extended periods of time, longer than hotels for example. In turn, the lender wants to share the risk more with a hotel.

The deal sounds challenging, but doable.

Good luck.