Motel Business Valuation - Posted by Duke(CA)

import · November 27, 2005, 9:03pm

Posted by Don Dion on November 28, 2005 at 23:06:11:

I had the leases, rent rolls, 3yrs Schedule E’s and a YTD Income / Expense Report and a trailing 12 month I/E report

import · November 27, 2005, 9:03pm

Posted by Duke(CA) on November 27, 2005 at 22:03:49:

I realize that financeials are whatmake a deal but what about the areas demographics? How important is the areas employment, income per capita, available rental properties, age, family size etc… in determining the value and how do you apply this information when evaluating a deal?

Glad to have found such a useful site

import · November 27, 2005, 9:44pm

Re: Motel Business Valuation - Posted by Don Dion

Posted by Don Dion on November 27, 2005 at 22:44:25:

During the appraisal process the appraiser will look at the community and the local work force to see if the area is growing, stable or declining.

One local area here that this would present a potential problem is Rockford IL where the Auto Industry is in vary bad shape and effecting the local economy.

I have not looked at a hotel deal there but I have looked at several multi family buildings from 12 units to 48 units in the past 2yrs. I can tell you the rents are down almost 45% from their highs 36 months ago and owners are feeling the pinch. The buildings are not worth what they once were and as you can tell by the nightly news the next few years dont seem to have a positive change in the wind for them. None of the deals have gone thru since they do not cash flow at the current prices they are listed at but I would guess in the comming months the prices will adjust downward to meet what a current buyer would be able to finance.

This is not unique it’s happening in michigan and other area’s of the country also.

import · November 28, 2005, 9:49pm

Re: Motel Business Valuation - Posted by Duke(CA)

Posted by Duke(CA) on November 28, 2005 at 22:49:41:

I would like to be able to make a fairly informed judgement on an area before I get to deeply involved in a deal. Are there sources available to us. What source did you use to find out that the rents are down 45% in the area you mention?

Thank you for your response