1. Defining your Hospitality Property Criteria.
Before we send a single OM, we want to know three key criteria items: Franchise or Flag scale affinity, geographic markets, and equity available. A Hospitality Property should also include keys/rooms, year-built or post-renovation floor, RevPAR penetration, and willingness to take on a PIP. The tighter the Hospitality Property Criteria, the faster you'll close — and the less refining of the LOIs you'll write.
2. Capital Availability & Lender Pre-Qualifying.
Loan terms drive hotel returns more than purchase price. Decide early whether you're targeting CMBS, SBA 7(a) for first-time buyers under ~$5M, a regional bank, life-co, or bridge to construction-take-out. Get a soft term sheet before LOI — we'll coordinate with your lender so the LOI's financing contingency reflects what's actually achievable. Also, we can recommend our Hospitality creative & flexible Lenders.
3. Underwriting that survives diligence.
Assess Gross Revenues current market multiplier, STR comp set, T-12 with seasonality, payroll burden by department, FF&E reserve adequacy, brand-mandated PIP scope, real-estate tax reassessment risk, and a stabilized year-3 pro forma. We model two cases: lender-friendly (conservative) and operator-friendly (yours). The gap between them is your negotiation room.
4. LOI — Letter of Intent Strategy.
A clean LOI wins. Price, deposit structure, study period length, financing contingency, brand-approval contingency, closing date, and any seller-side carve-outs. We almost always recommend a non-refundable deposit going hard at the end of due diligence period — sellers reward speed and certainty more than they reward to do any extra extension.
5. Due diligence — the 45-day sprint.
Property condition assessment, Phase I environmental, title and survey, franchise transfer (the long pole), liquor license transfer, payroll and accrued PTO audit, advance deposits and group bookings, FF&E inventory, and tax certificate. Plan brand approval to take 60-90 days — start the application the day you go under contract.
6. Franchise transfer & PIP.
Most flagged transactions live or die on the PIP. We help you push for an inspection during the study period so the scope is known before you go hard, and we negotiate brand-funded incentives where the relationship allows. For independents, this step is replaced with brand-conversion analysis if you're contemplating a flag.
7. Closing and post-close.
Closing statement reconciliation includes guest ledger, advance deposits, gift certificates, group room nights, and house-bank cash. Day-one ops change-over (POS, PMS, payroll, OTAs, key vendors) is something we walk through with new operators. Most missed dollars are here, not in the purchase price.
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