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We have consistently invested in the most profitable real estate known. Right now, you have the opportunity to invest in one of the most lucrative investments available in the marketplace today. It is a 144-room green energy hotel located in one of the busiest areas entering Mississippi. The hotel is located just 4 blocks from the beach. There is a restaurant and lounge located inside the hotel. This hotel has both interior court and exterior court rooms. There are 2 swimming pools, an indoor and outdoor located on the complex for year-round swimming. There is a 2-acre tract of land located on our property that Mc Donald's has expressed interest in doing a 25-year ground lease on it for approximately $25K per month. There is a conference room as well for weddings and other formal and informal events. There is a $400M casino resort being built just blocks away from this complex. There is also the largest gas station in America just blocks away as well. One of the most appealing aspects of this complex is the fact that this will be a green energy hotel. We are blanketing the roof with solar panels that will eliminate 50 to 100% of the energy liability. There will also be EV charging stations located on the property for highway travelers looking to charge up their vehicle while eating at our restaurants or patronizing at our lounge. They can also stay at our hotels if they have to charge their vehicles overnight. The energy that is being supplied to our charging stations will be at no cost to us as it will be supplied by the sun to our solar panels.
Amenities At the Hotel
We have a full-service restaurant as well as a lounge. We also have a gym facility as well as a conference room. We have a few restaurants that want to rent the restaurant facility from us. One of the best-known restaurants is IHOP. Stennis Space Center has expressed interest in renting the conference room from us 50 days out of the year.
This hotel has been completely renovated to the tune of $1.7M. There is no deferred maintenance. Everything located within this hotel is brand new.
The Most Lucrative Invesment in the Marketplace Today
The Wyndham Opportunity
Here's how the investment works out: (Ramada figures)
We are acquiring this asset for $10M. There is no rehab required at all as the whole complex has been completely restored. The only thing left to do is to install an elevator so we don't have to be concerned with room allocation. We have 144 rooms in a market that has 65% occupancy rate. That means that we will have an average of 94 rooms rented annually at an average daily rate of $141 if we were to leave the hotel as Ramada. $141 multiplied by 94 rooms equals $13.2K per night. $13.2K multiplied by 30 nights per month totals $398K monthly. $398K multiplied by 12 months totals $4.77M. With a 60% expense ratio equals $1.9M of net income before additional rental income. The hotel will also be receiving rents from the restaurant and lounge totaling $25K per month. $25K multiplied by 12 months totals $300K. This is an income that requires no expense as the restaurant and lounge will be responsible for their own maintenance. Adding this income of $300K to the base income of $1.9M equals $2.2M. We also have an offer from Stennis to rent our conference room at least 50 times per year. This figure alone is estimated to be approximately $300K. Add in other events like weddings and graduations, we estimate an additional $200K in conference rentals annually. We will incur little to no expenses as most or all conference room activities will be serviced by the restaurant on site. Add this figure to the base and restaurant rentals of $2.2M to arrive at a total of $2.7M. Mc Donald's also has an interest in renting part of the land from us in the form of a 25-year ground lease for $25K per month. That totals $300K annually. This brings the net income to $3M annually. With a market cap rate of 11%, divided into the net income of $3M gives us a value of $27M. This gives us $15M in equity.
Here's how the investment works out: (Wyndham Figures)
We have a $10M acquisition price. There is no rehab required at all as the whole complex has been completely restored. The only thing left to do is to install an elevator so we don't have to be concerned with room allocation. We have 144 rooms in a market that has 65% occupancy rate. That means that we will have an average of 94 rooms rented annually at an average daily rate of $161 if we were to convert the hotel to Wyndham. $161 daily rate multiplied by the occupancy of 94 rooms equals $15.1K of daily income. $15.1K multiplied by 30 days of the month equals $454K monthly. $454K of monthly income multiplied by 12 months equals $5.45M of annual income. Deduct 60% from the gross income for expenses equals $2.2M in net income just from room rentals. Add in restaurant and lounge rental as well as ground lease from Mc Donald's totals $600K annually. $500K annually from conference room rental also adds to a total net income of $3.3M. Dividing the market cap rate of 11% into the net income of $3.3M gives us a value of $30M. This leaves us $18M in equity. We will most likely go with option 2 and make it a Wyndham property versus a Ramada.
As If That Wasn't Good Enough
We would be able to leave the investment at what I explained above and it would be a very good investment that would knock your socks off. However, we will make it even better. Starbucks has contacted us wanting to put a Starbucks on the back side of the hotel. We're looking at a ground lease of $15K per month. This will add to the bottom line. That adds up to $180K per year. This is just a small part of the picture. We have a restaurant and a bar renting from us located under the roof of the hotel. We will also have a Mc Donalds and a Starbucks renting from us, located on the grounds of the hotel. We will also blanket the roof with solar panels to produce more energy than we will ever need. We will sub-meter the restaurant, bar (lounge), McDonalds, and Starbucks so we can monetize their energy needs. By the way, our charging stations are estimated to generate $2.5K per month each. We will have 8 charging stations on the property. That is an additional $240K per year just for the charging stations alone.
Recap:
We have 7 streams of income in addition to the hotel room rental income. Those incomes are:
1. Restaurant rental ($240K per year)
2. Lounge rental ($60K per year)
3. McDonald's ground lease ($300K per year)
4. Starbuck's ground lease ($180K per year)
5. Conference Room ($500K per year)
6. Charging Stations ($300K per year)
7. Sub-metering ($300K per year)
This is all in addition to the room rents of ($1.9M net per year)
Total ($3.7M per year net)
