Hotels are one of the best exemplars of multifamily or multi-property real estate; all of which lies in the commercial real estate designation category. Although the start-up costs are considerable, it is difficult to reap greater dividends from any other real estate endeavor when hotel financing is successful. In the following blog, we’ll see a few tried-and-true methods that can optimize your pursuit of viable hotel financing avenues.

Hotel Financing: The Name is Like Gold

In particular, you want to make sure that the hotel chain you choose doesn’t appear on “flag lists”; which are compilations of user and business bureau reviews. If your hotel is flagged, for example, this is a good thing – it will receive a higher valuation on travel websites, hotel indices, and other places where hotel options are compiled for the benefit of the tourist.

If your hotel name is unflagged, then even proper management may not save it from a lower rating. Therefore, research how to get flagged first in your region, and then in indices worldwide.

Articulate Hotel Management on Form

Make sure everyone can quickly access the competence of the management. Before you even pursue hotel financing, you should have professional templates denoting your management team and their qualifications. This will significantly elevate the confidence that the prospective lender will have. You may even want to hire a property manager for the loan process and afterward.

Property Values and Equity Factors

Although you are the prospective borrower, you should always have the lender request the property appraisal. Your job is to collect all bank and tax statements for the property dating back a couple of years; it can be worthwhile to have a professional auditor ensure that all is in order, too.

As for the equity factor, this part requires legal aid. You will need to be apprised of state laws concerning hotel financing specifically, and commercial real estate in general. Your state might require you to have equity investors to be fully compliant in the hotel real estate sector.

The above just touches the tip of the iceberg when it comes to hotel financing; peruse the Critical Capital Solutions website for more information, or contact us directly.