Can I sell a motel for about a $1 million and invest in $5million motel? My motel is grossing at $240,000/yr.

Time for a change in life. I want to invest in a bigger property. Where I live is located in a resort town. Looking for some advise on how to sell and buy without affecting paying my bills.
In Selling Property - Asked by gohan f. - Aug 14, 2011
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Shahid N.
Beverly Hills, CA

It would depend upon a few different factors. As far as selling your motel is concerned the price you get would be dependent upon the appraisal and the demand but assuming you sell it for the desired amount, you can then look at putting all or part of it towards a down payment for a $5 million property. Depending upon the location and the cashflow of the target business as well as some other factors you could possibly acquire the target property. The best way to start is to get a valuation done by a Business Broker/ appraiser of your business. You could also get help and advise from your local SBA office.

Aug 15, 2011
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George W.
Property/Asset Manager
Lexington, KY

I believe you will have a difficult time selling a hotel at over 4 times gross revenue, but your resort location may allow for a value that high. Get the advice of an accountant on a 1031 tax defered exchange. If you meet the timing requirements, you may be able to upgrade to a more expensive facilty and not have to pay taxes immediately on the sale of your existing facility.

Aug 15, 2011
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Cheema R.
Mckinney, TX

Dear, it depends on the finance received after closing from first property unless you have some extra cash sitting in back pocket for down payment for new property which would suppose to be $5m worth.

Nov 25, 2011
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