Hi, there a Keir here coming to you live from Lake Placid, New York in upstate New York in the Adirondack mountains, home to two winter Olympics, 1932 and 1980. If you haven’t been highly recommend, it’s a really cool part of the world I’m actually going on a hike later today, beautiful region filled with lakes and mountains and communities that are worth exploring.
So today I want to talk about how to buy, renovate and reposition a hotel during a pandemic. Are you interested in real estate investing? Are you looking to become a real estate investor looking to diversify and add residual sources of income? Build freedom, income and wealth into your life? Real estate investing is a great way to do that. A lot of our members and audience here at Sophisticated Agent and Sophisticated Investor are in tune and uniquely aware of the benefits of real estate investing. They are looking for new strategies, new ways to get into it, or to expand their portfolio and holding.
So I hope that this brief mini case study today, on again, how to buy renovate and reposition a hotel during a pandemic will be a benefit to you. So I’m probably one of the few people that are actually buying hotels right now. And I’ve created a little bit of a model on how this can really work and be successful. And right now there’s unprecedented support by the government with the small business administration, the SBA, 504 loan program, and other things available through the federal government through guaranteeing and providing access to low interest rate, fixed debt for the long term, and even doing a six month forgiveness period.
They’re literally paying my new mortgage for six months, not deferring it, paying it. So right now there is a lot of political wind and a lot of capital market wind behind the sails for enterprising entrepreneurs, developers, and investors to put deals together. However, just because of that, it doesn’t mean it’s always a good time to put a deal together, meaning buy a hotel right now in a market that is only accessible by plane, such as an Island in the Caribbean. It’s probably not the best idea. With these resorts suffering and being down 60, 70, 80% of occupancy from their normal time and normal levels of revenue from last year in 2019. So we need to be careful, right?
Real estate is always a local business, very local, but the hotels that I’m purchasing and renovating and repositioning are ones in markets that are fed mostly by people driving within three to five hours of those markets, which puts us within striking distance of the New York city metro area, Boston and Philadelphia. So we have access to over 50 million people, again, as a target market to come and vacation at some of our mountain properties and upstate new York and Adirondack mountains.
Know the dynamics of the local market, and make sure you feel good about the fundamentals
Make sure that you can weather the storm. As things start to pick up and reposition for this new world, this new economy here coming out of the pandemic, but there’s still opportunities out there. There’s also opportunities to find and creatively finance deals. There’s a lot of distress out there too. That’ll be coming up in the next 12 or 18 months. As a lot of hotel owners, won’t be able to weather the storm. It’s not a time to take advantage of that, but it’s a time to put deals together and find a way to give a seller a way out where you can get into a property at a discount at a lower cost basis, do some renovations, reposition, and really be able to reap the benefits of the upswing here as our economy returns to its former strength.
So again, couple of deal specifics on what I did with this one. Found this one, about a year and a half ago had kept a relationship going with the sellers. They weren’t quite ready to sell initially. They became so later on, then the pandemic hit in February, when we were under contract ready to close in a month or two, everybody gets skiddish. Didn’t know what the deal was going to fall apart. I believed in the market and in the future and that it would rebound. I knew we’d be in a good position to basically capitalize on all the people that needed to vacation to a safe place in the mountains, away from the cities. And I’m really glad I did because in July, August and September now we’ve surpassed revenue from 2019 during an unprecedented pandemic and lockdowns.
And while we’re renovating the entire property, which is remarkable. I’m really, really excited by that fact, by that success that my team and I were able to accomplish has really provided confidence for me to continue to do this, to find good deals that make sense in solid markets. Where we can attach very attractive debt. We have a clear reposition strategy and investment thesis. We’re already finding market leaders in their market and we’re making them better. We’re implementing new IT strategies to give them state of the art technology. This is the first smart hotel in the entire Adirondacks in upstate New York, which is pretty cool. Voice enabled rooms, you know, lightning fast, high speed, broadband smart TVs, low energy lighting, USB chargers, imports, device galore. You name it. This hotel in a little mountain community up by Gore mountain has it all really, really cool.
We were also able to make it a really nice aesthetic. We went for that Alpine chic, elevated luxury modern luxury meets kind of rustic charm of the Adirondacks. And we really, really struck it. I think we hit it out of the park with this one, been getting great reviews. People love the new amenities. We’ve renovated the great room and lobby with all the new amenities and exterior activities we’ve added on the property. It’s been a huge win. We completed this entire turnaround renovation project in the less than two months. On a tight timeline mandated by the SBA so that we can qualify for the six months of payment of our mortgage principal and interest, which again is unprecedented, never heard of that before. So the Alpine lodge in North Creek, New York by Gore mountain, this was a huge success.
It’s been three months now, since we closed, we’re officially launching the brand new Alpine lodge. New logo, new website, new design aesthetics, with all the new renovations that we’re highlighting, all of our new marketing. I’m actually going to be sharing with you guys here, a property video so that you can see all the changes we made. See how this property went from where it was to where it is now as we kind of relaunch the Alpine lodge. So hopefully this was helpful as a little mini case study on how to buy, renovate and reposition a hotel during a pandemic, some things to look out for, some things to keep in mind and how you can be successful in hotel and hospitality investing in developing, even during trying economic times like this recession in like this pandemic.
If you got value from this, shoot me a message. Leave me a comment or a light or share this with somebody that would also benefit from it. And again, to your success and happiness, we’ll talk to you next week.