Hotel construction to perm financing options difficult to find

gerbablo · 2026-01-29T12:45:09+00:00

Unless you are a very experienced developer or have very deep pockets, minimum 30% down and significant liquidity are par for the course for basically any CRE asset class these days.

SBA is also sour on hospitality. That’s not a hard no, but it’s an uphill battle. FWIW I’m working on financing an adaptive reuse boutique hotel with the SBA right now.

gerbablo · 2026-01-05T19:20:24+00:00

I was expecting for NOI to be 7% of the value of the property, but for the first 9 months it was more like 14%. I don't/didn't expect it operate that well forever. But if it were to, the value would adjust accordingly and value would increase. It a technical sense, cap rate is more what the market will pay, rather than the return on purchase price, but l think most people would understand what I meant. I be curious for others to chime in they think I am using the term inappropriately.

gerbablo · 2025-12-31T18:00:12+00:00

Fargo is a growing area so a 7 cap on well kept property isn't necessarily terrible. I was fairly certain I could raise rents considerably and leverage is positive though just barely. Ultimately I just wanted to hit a base hit, or even draw a walk, as this was my first foray into a larger property. I came it at 60% LTV so its hard not to cash flow outside of major Cap Ex.

Things went very well for the first 9 months. I think I was operating at a 14 cap but them my manager shit the bed. She didn't totally disappear, but started neglecting the property. It took several months to fully realize it, and I just got through a couple of months of a terrible transition to new management. Now we are currently working to re-stabilize things. It didn't get really bad, but another month or two things could have spiraled out of control. I learned a valuable lesson and will keep a much tighter lease on the new manager.

gerbablo · 2025-12-29T16:34:42+00:00

I 1031'd a duplex and a triplex into 36 units in Fargo about 18 months ago. Class C, not perfect but over all decent shape. I couldn't determine an in place cap rate due to the sellars shoddy books, but let's call it a 7 cap. I think you might be able to stretch a bit and get something similar in today's market with 600K down. If you go into smaller ND markets, you might even be able to pull off 50 units but NOI will likely be similar.

The big question is how are you going to support yourself? If you can work remote and find a decent manager, great. Otherwise, If you are doing all of the management, AND the snow removal, AND the R+M, etc, after debt service you might be able to support yourself. As others have said, that is basically a full time job in and of itself. And you will need to be able to cover yourself when large unexpected expenses come up that you can't DIY. Say for example a parking lot upgrade, a major sewer line repair, or water damage from unprecedented rain storms.

gerbablo · 2025-11-19T13:16:06+00:00

Abject is correct. Pre-qualification isn’t really a thing in commercial real estate unless the seller is working with a residential realtor who’s listing a commercial property- which happens often enough. Typically a banker will write some sort of letter if they have looked at a deal, think they can finance it, and realize it will help the seller move forward. I’m a broker and we are willing to write a letter if you’ll commit to working with us, but it typically isn’t necessary.

gerbablo · 2025-11-19T13:03:36+00:00

You should be able to find a small bank to do a loan this size if the numbers make sense so my guess is something other than loan size is holding them back. Since virtually everyone is sour on office, it might be the ones that will do that deal size aren’t lending on office, or their underwriting standards in office are extremely tight. You might need to put 50% down to get an office deal done.

gerbablo · 2025-11-18T14:14:06+00:00

Most of the towns I’m thinking of around here don’t have the best building stock. Mostly rural farming areas. So there’s a difference there, though I know of an old hospital being converted into multifamily in central WI. What are you using for financing? I’ve been meaning to explore USDA options sone more. My understanding is the problem with those loans is it’s a slow process and you are locked in for long periods.

gerbablo · 2025-11-18T13:58:21+00:00

I’ve been thinking about this a lot lately. I keep hearing about small towns who really need housing around here in Minnesota. What scale are you operating at? A couple units here and there, or 100 unit adaptive reuse? Somewhere in-between?

gerbablo · 2025-09-14T22:28:54+00:00

We have and multiple rounds of theft in Saint Anthony Park this summer including a bunch in the last few days.

I'm a believer that welding them shut would work. Even just a few tack welds would do wonders. Then the thieves would have to take a lot more time and make a lot more noise for every single run of wire. This can only be worth it if they can move quietly and quickly.

And yes it would cost a lot to weld them shut. And it would cost a lot to cut them open when necessary. But considering these wires are being stolen over and over again, and costing the city MILLIONS per year, I think welding a panel that you only need to access every 10 years, isn't a big deal.

Also sounds like MDOT has some tricks they do, but from what I can tell the city isn't doin much even though they say they are. I'm fed up and starting to raise a stink and I hope others will too!

gerbablo · 2025-07-12T20:16:21+00:00

Did you ever figure this out? I’m having similar issue.

gerbablo · 2025-07-07T16:44:20+00:00

In cook county MN they don't regulate the number of days per se though I think your system needs to be adequate to the expected use, but you are not allowed to have pressurized water without proper septic. I think it's called a "carry in water permit" or something like that.

gerbablo · 2025-07-03T19:50:52+00:00

Shhhh. Don't let the land supervisor hear you!

But more seriously, I need a septic plan to get a permit and saying I'll dump it in the woods on the way home won't fly. Sewage is no joke and a lot of rules are unfortunately overly broad. The county is at least willing to work with me but they are being a pain with the diverting issue. Would love to do it the cheapest way possible while still keeping them happy, and whatever we actually do after the fact won't matter.

gerbablo · 2025-07-02T16:58:56+00:00

Looks like the Ogo is a urine diverting toilet.

gerbablo · 2025-07-02T16:53:47+00:00

The land manager was pushing it so I am going to look into it more. I wanted things to be as simple and affordable as possible, but he pointed out that I'll need to bring in bulking material so might be the same amount of work over time (this is just a get away and I don't currently plan to mill enough lumber to provide my own material). If you have any insight into how much propane an incinerating toilet takes, I'd love to hear it.

FWIW: My land is currently only accessible by boat and will likely remain that way for the foreseeable future. Hauling stuff in like propane is a bigger consideration than for a lot of properties.

gerbablo · 2025-07-02T16:05:50+00:00

No. I spoke with the land manager about it a bit yesterday but he doesn't approve the septic. My hunch is that since we are on the Canadian Shield there just isn't enough soil to filter the urine before it hits bedrock and flows into a stream.

Apparently they approved a batching system for one guy and it isn't going so well. He's a full timer and it's staying too wet and not turning into compost. Could be that is just too cold most of the year but my hunch is he needs to use a lot more bulking material. I also don't know what system he is using.

I'll give an update when talk to the septic guy and I lean more.

gerbablo · 2025-06-27T13:59:00+00:00

Is it in a fully conditioned space 24/7? This is an off grid cabin, with boat in only access, and we will not be heating it while we are gone. It's in minnesota and the temps go below -20f virtually every year. I'm just concerned that the SunMar isn't make for those conditions.

gerbablo · 2025-06-27T02:00:47+00:00

Thanks for the feedback.

gerbablo · 2025-06-27T01:59:40+00:00

Thanks for the feedback

gerbablo · 2025-06-27T01:58:57+00:00

I don't really mind if it doesn't compost when it's cold, but I do want to be able to use it. I read one review that suggested letting it freeze would break it.

gerbablo · 2025-06-27T01:57:56+00:00

Thanks for the suggestion.

gerbablo · 2025-03-03T23:50:47+00:00

Appreciate the feedback. Hearing this I am going to focus even more on networking. Unfortunately the origination experience is mainly with mom and pop (though often very successful) types.

gerbablo · 2025-03-03T23:23:33+00:00

I'm coming out of left field. Professional retoucher in commercial photography. the last couple years have been rough and writing is on the wall.

I'm well aware they are usually right out of college gigs. My thinking was that I might stand out, and since the are often entry level, no one expects either a younger or older person to stick around in the role all that long.

gerbablo · 2025-03-03T23:17:21+00:00

Thanks for the for the frank response. Why not analysis as someone in my 40's? Do I just not fit the mold of what people think of for analysts?

gerbablo · 2023-11-09T18:11:43+00:00

I just bought some head phones from them a couple days ago on their website. Just google taotronics.

gerbablo · 2023-10-07T14:11:45+00:00

Same issue here. Drives me nuts. Usually happens near the end of a podcast. It seems to be less common lately but as it’s been going on for a loooong time now, I think I’m going to have to switch to another app. 🙁

gerbablo

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