By Jay Litt
Partner
JLitt Inc.
Not Just Another
Piece of Real Estate
When financing hotels, remember that the
operating business is important to the value
The term real estate describes liv- able or leasable buildings, such as houses and office buildings,
or land. Hotels fit the first definition,
but they are not just another piece of
real estate. Hotels also are complex
operating businesses. Investors and
mortgage lenders often misunderstand
this and ignore the complexities within
these buildings.
Commercial mortgage brokers who
understand how a hotel’s operations
come into play when determining value
can best help their clients when seeking financing for this property type.
In all cases, the operating business
plays a major role in how hotels are valued. A hotel’s day-to-day management
is complex, so it is critical to have the
right operational information to analyze
a hotel’s value.
There are many different categories
of hotels: limited-service, select-ser-
vice, full-service, convention, resort
and extended-stay hotels. These cat-
egories also have different quality lev-
els, such as a one-to-six rating, using
stars or diamonds. And then there are
brands — of which there are more than
50 — that match up to the type of hotel.
Jay Litt is a partner in JLitt Inc., a hotel-advi-sory company located in Boca Raton, Fla. His
company specializes in advisory services for
the hospitality industry. Litt previously was
executive vice president of operations for
Wyndham International, and he also served
as Wyndham’s chief procurement officer. His
portfolio included 28 resorts in the United
States, Caribbean and Mexico. Reach him at
(214) 336-0666 or jlitt@jlittinc.com.
By Craig Grella
Founder
CreativeREO.com
How;to;Market
Successfully
Hard-money mortgage brokers may need to shift
their focus to earn more business
fantastic source of new business and
a great way to build relationships.
You’ll probably find competition
there, however, as this is a well-known place to find potential clients.
2. auctions and foreclosure sales: These
usually happen weekly or monthly at
your local county courthouse.
3. online: The best real estate agents
have websites that generate hundreds of leads a month. Do a quick
continued on page 42 »
In the past, traditional marketing for commercial hard-money mortgage brokers was localized: You placed
an ad in the local newspaper or you
posted a few bandit signs around your
home and office. To succeed in 2012,
however, brokers must be creative with
their marketing material and target the
right audience. Because many buyers
start their search online and use real
estate agents, it makes sense to net-
work with these agents and to ensure
borrowers can find you online.
Finding agents
Unlike residential mortgage brokers,
it doesn’t make sense for commercial
hard-money brokers to network with
traditional real estate agents because
few of these agents deal with borrowers who use hard money. Instead, you
must find and work with agents who
represent the following properties:
• short sales and pre-foreclosures
• bank-owned properties and other
foreclosures
• probate and estate sales
• auctions
• commercial or special-use properties
Craig Grella is founder of CreativeREO.com,
which provides hard-money financing for
real estate transactions nationwide. He
started his career as a civil and structural
engineer and transitioned to lending when
he became aware of financing challenges
many real estate investors face. In the past
five years, Grella has arranged or consulted
on more than $200 million in financing,
including residential and commercial properties and land development. Reach him at
(615) 657-9103 or visit creativereo.com.
