I am currently doing this strategy. It was my first property and it was distressed. The Motel was going to get deflagged, I got in with only my first months lease payment. I have an option to purchase with a % of my lease building the down payment. I have had to quickly execute strategy to build the business, renovate, manage, and grow every department while cutting expenses. Location is key to have an upswing on your valuation, and find an opportunity to maximize occupancy. We went from 45-50% occupancy to over 90% by changing how we market, target our niche market and pick the renovations with highest ROI. My down payment has come from growing our monthly business, using the increased equity from the valuation, and bringing on one partner that will help buy the next one.
Oct 11, 2013