No Hotel Loan for You!Written by Cameron Brown
Meeting requirements to get a decent hotel loan from your local lender can be difficult but not impossible. Let's face it, what lender wants to put money up for a roach infested dump in downtown Detroit? You'd have to get a separate loan just for insurance.
Most lenders will only finance hotel properties that are "flagged". In other words, most banks, public and private lenders will only provide hotel loans to individuals who are starting a franchise under certain major hotel/motel chains such as Best Western, Hilton, Super 8 and other well-established hospitality brands; Sid's Sleep Shack need not apply. In addition to being a virtual nation-wide brand, particular establishment in question needs to show a profitable operating and occupancy history.
Even if you want to build a new hotel/motel from ground up, forget about starting your own brand; most lenders will only provide hotel loans to build same "flagged" hospitality companies as they will for purchase of an existing property. Besides having a well-known flag, getting a hotel loan for a new property is possible provided it is well located and can be provided with strong management.
Lenders reserve best hotel loan rates and terms for properties that are well cared for, attractive, and have pleasing amenities like pools, wireless internet, cable, and complimentary continental breakfast buffets.
Hotel loan terms will, of coarse, vary from lender to lender, but most banks and other investment capital institutions provide 5, 10, or 20 year loan terms for amounts up to $2,000,000. These loans can carry an interest rate ranging from 7% to 8% and typically carry a recourse clause, although some lenders are more flexible than others in this regard.
Just a brief note on recourse loans; this type of loan hold your personal assets liable in event you default on hotel loan-seriously bad news if your franchise doesn't turn out to be as successful as you originally thought. This is lender's way of protecting its assets by separating those who are serious about hotel business from those that just want to try something new. If you're not familiar with details of this loan, you should either educate yourself thoroughly first or look around for a non-recourse loan. The terms of a non-recourse loan simply hold hotel, or whatever else you spent loan funds on, liable in event you default.
Acting as Your own General Contractor when Building your Dream HomeWritten by Robert Kempe
This article is intended for DIY (Do It Yourself) home builder; however, it is very useful information for new home buyer to understand what processes you can monitor even if you are not acting as general contractor and hiring a general contractor. For inexperienced DIY home builder, acting as a general contractor is one of most stressful things anyone can undertake. After that statement, you ask yourself ďWhy would anyone really want to be general contractor for their new home?Ē Well number one reason is to save money, and in our society itís all about money isnít it? It doesnít necessarily mean that you are building home (but with this approach sweat equity has a whole new meaning), you are only managing sub-contractors. Successful general contactors are either born good, or have been trained to be good. You, as your own general contractor, do not have time to be as good as a contractor who makes their living building homes. For this reason, I will give you some guidelines to help you out and feel a bit more comfortable managing your new dream home as your own general contractor:
Define Your Project; I have published an article on very effective ways to decide on a dream home floor plan. I recommend that you read that along with this article. The article is called Home Floor Plan Designing for Your Future Home by Robert Kempe. Once you have decided on floor plan and all associated up front planning projects, such as finding right plot of land, gathering information on building codes and permits, having signed construction drawings, etc. you have to apply for building permits. With homework of gathering all this information prior application process and having your construction drawings drawn to comply with city, county and state codes this process is just a paper work issue. If you have not properly done this entire process prior to application, this will slow your time frame down considerably. Most DYI builders wait for building permit application to find out what is needed. Make it easier on yourself and do it first.
Execution of Project; Now that you have a clearly defined project you can get accurate quotes from contractors. The construction disciplines you will need are as follows: Electricians, Plumbers, HVAC (Heating Ventilation Air Conditioning), Framers, Concrete, Drywall, Finishers, Painters, Roofers, Siding, Landscaping, Windows and Doors, Garage door. Etc. Keep in mind that most contractors will have multiple disciplines and will try to combine them as much as possible either with their own work force or they may hire out subcontractors as well. This is how you execute project. Do your homework on contractors that you will want to work with on your home. Ask people who you know that have recently built homes who they have used as contractors. Actually any resource on contractor evaluation is helpful. Have them evaluate experience. With this process you can then get three to five contractor references from trusted resources without involving any salesmen. Have a set of construction plans ready for each of contractors that you are going to have bid from list you have generated. Make sure that all disciplines will be bid upon.
Deciding who to hire as your subcontractors; You do not always have to take lowest bid! You want contractor that is most qualified and most prepared to build your home. It is highly suggested that each of contractors break down categories and itemize how they arrived at their price. This is best done by communicating this up front before receiving their price. Once you have all this information, evaluate prices according to their breakdown. Rate contractor on their responses on a scale of 1-10 with 10 being highest rank. If bids are close then itís a matter of what contractor you favor most. If there is a large gap in prices, you need to determine why. This is where your breakdown of work performed and associated prices can help you determine this. This is also where you find out which contractors are most serious and most qualified and which contractors are easier to work with. This might lead you to conclude that best contractor isnít always lowest price. You get what you pay for!