Motel Dev site - convert/run/lease/sell?

[marty2627]

owner retiring.. have 6072 sq metres, currently 30 rooms plus 3 br apartment, no time limit DA/BA to build 40 more. .not sure what to do to retire. .mostlyclosed for business now.. live on central coast.

Looking for ideas of what to do.. convert to units and strata sell, work hard in motel(I havent even had it open much.. no marketing done. )

any ideas / websites welcome.

a link to what is here is at

http://www.alpineholidays.com.au/developmentsite.htm

just about to commence the next 14 rooms, but not sure if I should, as I am closed mostly.. am in my 60's .. So my choices are

1. get involved in running the motel more, and boost the figures to around $30k per room per annum (nowhere near that now as mainly closed)

2. Get someone in to run / market it.. leasehold.. and reward them with a sliding scale of profits or something along those lines.

3. Find a developer to either complete the project to 69 rooms, and run it as a motel.

4. Find a developer to convert to s/c units, strata title, and manage or sell..

what do you think I dhould do?

cheers.. Marty ..

 

[dammit]

I'll bite.

Jindabyne is a lovely place, you'd need to be careful of over development and also the seasonal nature of the town (i.e. snow season). I would steer to option 4, without knowing the council or market though this could be better as a phased approach. If your going to look at income via operating the motel then I would get it up to scratch before considering developing (what's the point making more rooms when the existing ones aren't booked out)?

 

[Aaron Sice]

i'm trying to help someone see that they shouldn't be taking on a huge project like this without a LARGE BFO contingency fund.

one blowout in time or cost and EVERYTHING gets put back. this isn't like your "tile selection for your house being discontinued" standard blowout debacle, this is "now times that by forty and reschedule the lot" financial nightmare.

maybe you could offer an option, whereby you guarantee his profit in the final sale price, pay him a solid deposit ($50k+) for his retirement plans, take control and add value. the DA now over the site is substantial deposit in itself should you not go ahead.

just an idea.

 

[grossreal]

hi marty
do a deal with a developer for end stock and they take over the site.
simple development management agreement where you own the land and transfer it into a company that develops the site and for that you get paid or you take end product
don't know the numbers so have no idea about margins
is the site lent against or unencumbent
developing it is the easy part the margin is the hard part
it could be worth more just as a equity position into another project or property
need to know more about whats owed on it before I can give a view
look at my numbers and from your website a end product play could be done
but in this market for me its the only play
leasing would not be a runner at 800k plus 180 per annum
and develop as motel for me in that market the retuns are not there after management company to run it
sales possible but that would be up to the group that took it on
is there groups to do this even in this market yes

 

[crest133]

Our business is leasehold motels run under management.
LH should return 30% after rent if lessee operated.
LH should return not less than 20% under management.
Vendor should have 28 years P & L figures.
NAB may lend up to70% depending on borrower and project.
Good luck
chers
crest133