Buy a hotel or go into IB?
Have a chance to buy an 8 million dollar hotel with accumulated cash over 4 years investing (30%) + having equity partners (70%). Would plan to be an owner operator and grow in the hospitality space. I’m in my mid 20s now.
Other option is pursue B school and transition to IB. In a corporate engineering role today.
Hypothetically, if you were me, what direction would you take and why?
One more thing, we plan to use debt for 80% of the purchase price. I don’t have a couple million lol
Have you ever operated a hotel? It is significantly more difficult than you may expect and I would strongly encourage you have someone in the industry get your numbers to ensure they’re realistic.
What’s the business plan for the hotel? Is it a value add with a renovation component? Have you ever managed a renovation before?
A hotel is truly an operating business, real estate is really only a minority portion of the value there. Just make sure you’re comfortable and that your investors are and that they understand the potential risk of losing all of their money.
^^This right here.
Hospitality is a tough business and hotels are not high margin. Unless you and/or your partners have experience doing this, would not suggest.
I would pursue MBA to IB IMO. That is a tried and tested route to making good money. Agree with above that operating a hotel is a very difficult business.
I would personally ask Ben Mallah on YouTube
Yes, one of the partners has 6 other hotels in his portfolio and is excited about this deal but needs and operator. Plans to provide support where needed. That’s why I think this could be an exciting opportunity.
A PIP was completed a couple years ago so low renovation requested by franchise post sale. Business still cash flows comfortably with this consideration. 13% cap rate
Honestly it sounds kind of boring running a hotel to me and also you have limited upside. You’re going to have to deal with crazy people bitching about everything and dealing with 2 star Yelp reviews when you did nothing wrong.
I think the T10 MBA route sounds better.
Bro fucking do the hotel, why would you want to carry on being a slave if you have an out?
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