Share This Info:  

Choosing The Best Motel For Sale: A Guide For Motel Business Buyers


How To Buy A California Motel Hotel

When you are looking to buy a motel, you must do your due diligence

As you know, not all businesses are worth what the owner is asking so it is important that you one, know what makes a good motel and two, understand how it should be priced.

Going into the transaction knowing the difference between a great opportunity and an ok opportunity could make a big difference in your bank account so here's what you need to know to choose the best motel for sale.



Hotel vs. Motel -- Know The Difference


Many people use the terms hotel and motel interchangeably.  While they are both businesses that operate with the same concept in mind, providing overnight accommodations for travelers, by definition, there actually is a difference between the two.

If you are looking to buy one or the other specifically you need to have a good understanding of what the differentiating factors are.  For starters, look at the location.  Motels are typically located along highways or within a few miles of highway access points.  Hotels are typically found near attractions, tourist destinations or other points of interest.

The next difference is usually the amenities the establishment offers its guests.  Motels typically offer fewer amenities than hotels.  Most motels give guests access to food, cable and other basics while most hotels pride themselves on providing every amenity possible.  When reviewing motels for sale, you probably won't find many that have pools, fitness centers, business centers or any of the options you find common in most hotel chains these days.

The other big difference between the two is that motels are typically not rated on a star system as hotels are and motels are usually rented for less per night.  It important to know the difference between a hotel vs. a motel because you need to understand what you are buying.   You are going to market a motel differently than you'd market a hotel and your expenses will also be different.  Plus, you don't want to pay Hilton prices for Econo Lodge profits!   

Is It What Customers Want?

Part of doing your due diligence is to thoroughly examine the motel you are considering.  Before you make your interest known, I would suggest scheduling an overnight stay at the motel to see what kind service you receive.  Motels that offer poor customer service and have uncomfortable accommodations will not do well without a complete business overhaul.  Also, while you are there, check on the quality of the facility.  For starters, is it clean?  Nothing is worse than a dirty motel!

Next, look at the quality of the furniture in the room, the linens, and the d├ęcor, everything your customers will see.  Determine if it is outdated or in good condition.  Lastly, I suggest you take a walk around the building and see what you can find.  Look for things that would need repairing.  Doing a little secret shopping  will help you determine if the motel you are considering has what customers want or if you'll have to do a lot of work to improve its quality.  Whatever you find, make sure the price you pay reflects it.   

Get A Good Price

It is quickly becoming a buyer's market when it comes to motels on the market.  With the recent economic meltdown, many motels suffered declining sales and profits.  For a buyer, this is actually a good thing because we have been seeing prices for mid-market properties and below, dropping.

When it comes to price, there are several ways values are established in this industry and most often a broker will use several methods before actually arriving at a price.  One popular calculation is the Performance Index Method in which a table is developed that illustrates the:

* Cap rate percentage
* Economic value
* Value per room
* Multiple of room revenue
* Multiple of total revenue

With these figures you can determine the economic value by selecting either the desired cap rate (which in my opinion is the best method) or the per-room rate, or the times room gross or times total revenue to establish a price.    Other calculations commonly used include the income approach, excess earnings, discounted future earnings, discretionary cash, book value or the market value.

Taking each of these items into consideration as well as the quality of the facility, its location and the competition in its market, you should be able to determine if they are asking a fair price for the motel.  I strongly recommend you work with a hotel and motel broker to purchase a motel for sale because as you can see there is no "one size fits all" evaluation method for establishing a price which can make things confusing.

Having an expert in your corner to help you evaluate the opportunity is critical in choosing the best motel for sale.

More Info Regarding  How To Buy & Sell California Motels:

Motels For Sale & Wanted To Buy In California - Requests:

http://www.bizben.com/business-for-sale/motels-for-sale-type-california-ca.php

Business Brokers, Agents Who Assist With Buying And Selling Motels:

http://www.bizben.com/business-brokers/motels-business-brokers.php

Motel Business Resources To Asssist You With Consulting, Financing, Due Diligence:

http://www.bizben.com/business-resources/motels-resources-california-ca.php

Detailed Articles And Blog Posts Regarding Buying And Selling California Motels:

http://www.bizben.com/blog/motels-blog-posts.php

One more thing . . .

Let me know if you need any assistance with either buying, searching for, or sell a California motel or hotel - I will point you in the right direction. If you have a specific question about buying and selling a motel or hotel contact me and I will get an answer for you.

About The Author:  Peter Siegel, MBA is the Founder of BizBen.com and the Director of the BizBen Network - Online Community/Forums etc. If you are searching to buy a California hotel / motel make sure you are a part of the BizBen ProBuy Program and get the word out about your search criteria to all business brokers and agents throughout California that sell motels and hotels.  If you have a question about the BizBen Network or BizBen.com's ProBuy or ProSell Programs please feel free to phone Peter Siegel direct at: 866-270-6278.


Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business



  Helpful Resources To Assist In Selling And Buying California Businesses
Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Matt Sadati, Business Broker, SF Bay Area, Northern CA

I have Engineering and Law, JD degree, with over 30 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 33 businesses each having one to 30 branches.

Peter Siegel, MBA - SBA Loans, Non SBA Financing Assistance

For over 25 years I have provided niche business purchase financial advisory and loan placement services with SBA and Non-SBA Loans, Retirement Plan Conversions, Private Investors, etc. Financing amounts available: $20K to $7MM. Call today to get pre-qualified or receive financing: 866-270-6278.

Joe Sandbank, Esq. - Legal Services

I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.

Ryan Clark, Business Broker, Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.

Jack Oh, Business Broker - LA, Orange Counties

Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Selling My Small Business: What Items Should I Have Ready To Be Successful?

When selling a small to mid-sized business, owners should have their paperwork and financial information ready to go! They should also have a short business plan of past history, current operations, and potential for the future. In this BizBen Discussion several advisors and intermediaries weigh in.

Should I Buy A Business That is Losing Money? Feedback From Top Advisors

Are businesses worth taking a look at when they are losing money? Multiple Advisors & Business Brokers weigh in on this topic and say yes! (but be careful) on a BizBen Discussion. Some great feedback on this topic will make potential business buyers (and money losing sellers) want to read this info!

How Many Months Should I List My Business With A Business Broker?

It's important to remember that selling a business takes time. Unlike selling a house, which can be sold relatively fast, a business can take up to six months to a year to sell. Joe Ranieri (Orange County Business Broker) at 714-292-5448 explores this topic from a Business Brokers perspective.

Why Deals Fall Out: Unrealistic High Asking Prices Are Usually The Reason

The unfortunate truth is that approximately 50% of all small business sales transactions fall out. While failed transactions can happen for a many reasons, Peter Siegel, MBA (BizBen Director & Business Purchase Financing Expert) discusses the main reason deals fall through; steep asking prices.

Find Out Why 80% Of California Business Buyers Never Find And Buy A Business

First the dreaded statistic: 80% of all California business buyers looking to buy a small to mid-sized business in California never end up doing so! Peter Siegel, MBA BizBen Founder And Director at 866-270-6278 covers successful tactics all business buyers of small businesses should utilize.

Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Business

The final part of the business for sale transaction is the escrow and bulk sale process by Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) answers questions and describes the escrow and bulk sale process. Peter can be reached direct at 866-270-6278.

Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 866-270-6278 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

What Factors Are Considered In Valuing A Small Business? Advisors Weigh In

Valuing a small business is not guess work. It's not what some other businesses of the same type may have or may not have been sold for, it's not even what a business owner "feels" they want or deserve. It is a formula based on many factors. Peter Siegel, MBA from BizBen & others discuss this topic.

See All News, Tips And Events


Business Purchase Financing SBA Loans
Steve Erlinger Laundromat Broker
Joe Ranieri Orange County Business Broker
Joe Sandbank
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Absentee Run Businesses - A Myth Or Reality When Buying A Small CA Busin...
Read More News
How To Determine Whether The Buyer For Your Business For Sale Is Sincere...
Read More News