1. Build the buy box
Before we send a single OM, we want to know three things: chain scale and brand affinity, geographic markets, and equity available. A buy box should also include keys, year-built or post-renovation floor, RevPAR penetration, and willingness to take on a PIP. The tighter the box, the faster you'll close — and the fewer dead-end LOIs you'll write.
2. Capital stack & lender pre-flight
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.
3. Underwriting that survives diligence
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 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 study — sellers reward speed and certainty more than they reward an extra 1-2%.
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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