I’m really excited because I’m going to be sharing a lesson and a success story in real estate investing. And as a real estate investor, I love to recount some of the wins and some of the lows too, to help give a roadmap and a guide on what’s really working right now, out there in the market. If you’re looking to get into real estate investing, if you’re already a real estate investor, wherever you fall on the spectrum, I’m here to share with you some tips and tactics that I use as a, what I would view as a successful real estate investor and developer to really build my portfolio, to acquire performing properties, to build income wealth and freedom through real estate investing. So today, again, let’s start with a story on again, how I took a hotel acquisition that I just closed on and purchased during a pandemic during this COVID-19 pandemic here for starting to get to the other side of it.
This has been recorded in June of 2020 and how I moved forward with that and a time of unprecedented uncertainty, anxiety, fear, and concern. When a lot of people would think that I’m crazy would say, why would you buy a hotel right now?
Why would you get into the hospitality business, especially when the travel and hospitality sectors have taken such a hit?
And I want to go through the strategy behind this acquisition, how it started the timeline, the investment, uh, you know, objective and my plan at the property to operate in and renovate it, and why I continued to move forward because I was bullish and confident in both the short, medium and long term of this region and of this property and of this sector. And most importantly of us as a people, Americans, and our ability to rebound, to persevere and to recover from what has happened during this very extraordinary event in our lifetime and in our history.
So quick backdrop, backdrop, and background. This property is 19 rooms. It’s located in upstate New York in a ski mountain town, five minutes from a major mountain, very close to, uh, area lakes and hiking and golf and fishing in the Hudson river. And it’s a four season town area with a lot to do. So it draws people from really all over the Northeast upstate New York cities, such as Albany, Syracuse, Utica, as well as downstate, uh, tristate area around New York city, Connecticut, New Jersey, and also Pennsylvania and some from Massachusetts and Connecticut as well.
So it really has a big footprint draws from a lot of different areas up to six hour, drives people from all ages and demographics, again on the low end, early twenties, all the way up until the sixties and seventies, uh, singles, couples, families with kids, families, without kids, you name it, it’s a broadly appealing property.
It’s one of the top properties already to stay in the area. It’s got a solid track record, a great reputation from the former owners that renovated everything about 12 years ago, it was totally falling apart and put a lot of care, time, effort, and money into the renovation. And today it really just needs a light refresh or remodel. And we’re doing just that. And I’ll go a little bit on the details of what our plan is at the property here that we’re entering week two, since I purchased it as a new owner.
So I originally approached the sellers about having interest in purchasing this almost a year and a half ago.
Persevere and remain committed to your vision, not losing focus or interest because oftentimes real estate investors will do just that.
The one, a quick deal, a quick turn flip, but they’re not really in it for the long run. They’re not really looking beyond the moment or the quarter or even the year. They’re not really seeing what’s on the other side of the possible transformation, market shift, et cetera.
“I firmly believe that all of the value of real estate investing, isn’t the ability to see beyond what something, the state of something that is currently in to look beyond the time to look beyond the current status of the property of the market and of the trends.”
Keir Weimer
Real estate investing value does lie is being able to see beyond that around the corner, being able to create a new experience, improve upon a good one that’s already established and to put faith and confidence behind that. And so that’s exactly what I did is I saw this region bouncing back strongly.
I saw people wanting to get away after the pandemic from urban areas and coming to the mountains, there’s clean air, it’s safe, and they can get outside after they’ve been basically pent up, um, you know, and holed up in their apartments and in their homes for the better part of the spring. I also realized that most of our guests were traveling by car, not by plane. So that further protects the demand of this property.
And we saw that there wasn’t a big run on deposits or a lot of refund requests, meaning I came into the property with almost $30,000 a week or, um, in deposits with no real refunds for the summer. So that suggested that people weren’t really scared and trying to get out of their summer travel plans. Another thing that boded well for it. And I also think too, knowing this region and knowing how beautiful it is, how many people it attracts a year and activities that you can do here, the lifestyles that are available, I just knew that it was going to come back and bounce back and sure 2020 was going to be a down here, but it was going to be down here for pretty much every business, unless you were in online sales, like Amazon or a tech company, right?
The real estate investing sector is taking a hit on the revenue, but if we manage our costs appropriately and we position ourselves, we can emerge from this and then oftentimes stronger
So our plan at the property is on light remodel and refresh:
- Change the brand aesthetic
- Keeping the name, Alpine Lodge
- Change the website
- Update social media
- Update the logo & Brand Colors
- Landscaping & seal coating of the driveways
- Additional outdoor furniture
Alpine chic meets Scandinavian meets rustic luxury Adirondack
We’re really excited about that and adding some other elements to the rooms, we’re doing some paint, some additional furniture, new throw rugs. We’re going to new comforters and linens and sheets and towels to really elevate the experience and the feel because that’s what a lot of people who book a hotel room are looking for is a nice feel, a great sleep. Right? First and foremost, they’re sleeping in the room that want to have a really nice luxurious sleeping accommodation.
We’re also really upgrading it, overhauling IT at the property.
The first smart hotel in upstate New York and Adirondack’s
And what I mean by that is it’s going to be voice first technology first from the streaming apps on the TV, all brand new TVs to low energy lights, voice enabled lighting to voice enabled music and ski conditions and data and everything through Amazon Alexa devices through again, charging USB stations and other things that really make the rooms tech forward and smart in this internet of things where devices speak to one another and enhance the stay of the guests. That is our goal. So it’s interesting too, because we’re kind of a juxtaposition here pitting the smart hotel that tech forward property in the most least assuming places in the mountains of upstate New York.
And you wouldn’t really expect that, but that’s, what’s kind of cool too. So rustic elevated luxury meets smart hotel, fully technology equipped meets Alpine chic, kind of a cool vibe and aesthetic. So that’s our plan and strategy. We should have all the work and the renovation and remodel project done this summer.
So the first three months were really kind of fast-tracking yet we’re already booking up and getting busier and busier, and I’m really bullish again on the strength of this area and the ability of the market to recover and have the prospects of this property. As we continue to really build on the strong tradition that the former owners were able to create there. A little bit too on the capital strategy on this because of the fact that I bought this during a pandemic, an unprecedented time, and, uh, kind of beginning of a recession of sorts in our country here.
The Deal
Most of which the ramifications and impacts is yet to be seen is that I was able to negotiate really favorable terms with debt, meaning using the SBA program, having the political winds behind me, I was able to negotiate 85% loan to value 3.1% interest rate fixed over 20 years. And I’m eligible for no principal and interest payments for the first six months.
Think about that. That is really, really attractive debt in terms very, very hard to get that, especially in a hospitality property and more, especially during a pandemic. So it made this deal even more attractive and gave me more confidence to move forward with my original plans that I put together with the acquisition model and the business plan before the pandemic even hit.
So this is a story it’s an example of when you can see around the corner, when you get really comfortable in your underwriting, your plan of attack, your market, research, your knowledge of the property and the area, the general macro market, that you can sometimes create a lot of value and have the confidence to take a calculated risk when everybody else is swimming in one direction and you swim against the current and the other, because that’s where a lot of real estate investors create value that’s where alot of successful real estate investing creates wealth is by doing that and going against the current and the grain a little bit.
And that’s exactly what I did here with this property. I’m very excited and bullish on its prospects on the future, both of the property, the region and real estate investing itself. And we’re actually continuing to look for other hotels and resorts as possible acquisition opportunities here as we come out of the pandemic in the summer of 2020.
So hopefully this was a value is a little story to break that again, or my thought process, my investment strategy and thesis, the capitalization strategy on this recent hotel acquisition that have added to my personal portfolio. And if you have any questions at all, please leave a comment below. If you are somebody that likes to share value with others, please share this with somebody, send around the link posted to social. And again, hopefully this added some value and helped you understand the lens of real estate investing in a crisis and in a challenge during a possible recovery or sorry, recession, excuse me. And what are some of the implications? What are the sort of the things that we need to be thinking about before we take that calculated risk? So thank you so much to your success and happiness. I’ll talk to you soon.
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