Buying a hotel for sale in The United States of America is a huge investment that you should not take lightly. There are a lot of things you have to consider to avoid buying the wrong hotel. You need to take your time and consult with various professionals such as real estate agents, lawyers and so on. Consider the following things before you buy a hotel.
Determine your hotel acquisition criteria
There are different reasons for buying a hotel. For some, it may be a short term-investment to resell the hotel at a higher price. For others, it may be a long-term investment based on the potential of the hotel to generate monetary returns. The purchasing criteria will be unique to each investor. There is no right or wrong reason to buy a hotel.
Identify the right property
Now that you have settled on the acquisition criteria, you should talk to the right people in the real estate industry to see the kind of opportunities out there. You may contact asset managers, property brokers, industry consultants and brands. For those assets that are in line with your criteria, you should arrange a site visit. Following that, a marketing and property analysis should be done and based on the analysis, you should start developing your bid price and business plan.
Manage the bid process
I have seen hotels being sold by an auction process. The process may vary but as a buyer, you should submit an indicative offer for the commercial real estate for sale. If that is successful then a final bid will be required and this often needs to be accompanied by a purchase agreement. Offering the highest price isn’t always your ticket to success. Other factors come into play and these factors include the ability to compete, evidence of funds and so on.
Determine the right price
One of the most important factors to consider when buying a hotel is the cost of the hotel. There are different valuation methodologies for hotels. It is important to work with valuers to help you determine what the hotel is worth. This will help you avoid being overcharged or buying a hotel that won’t benefit you in any way.
Determine the right structure
You have two main options as the buyer. The first option is to buy shares of the company that owns the property and any other assets that make up the business. Another option is to buy from the company the whole hotel property and other associated assets. If you buy shares, all the property’s liabilities and assets that you agree to acquire and assume will be part of the sale agreement.
Generally, buying the hotel for sale in America will be logically more complex compared to share purchases. This is mainly due to the need to transfer every separate asset which forms the business and to get approvals from third parties. It is therefore important to consult with the right professionals and make the right decision before buying the property.
