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Tagged as: Invest, Investors, motel, private, profit, rennovation, they
{ 3 comments… read them below or add one }
By taking a percentage of the profits of the hotel for a certain period of time as defined by the lending agreement.
All investors everywhere, investing in anything do so because they are of the opinion the rate of return/risk on their investment will be more favorable than the rate of return/risk on other investment options.
This true whether you are investing in a motel, gold, stock futures etc. etc.
Since the selling price of a motel is usually based upon a figure like x times the revenues it earns, when you renovate it and increase those revenues, you exponentially increase its selling price. So you could buy low, fix it up and sell for much higher after raising the per night pricing.
Jeff
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