Step by step
How a hotel or motel sale to us works
Five stages, in the order they happen, with what we ask of you at each one and what you can ask of us.
The five stages of a direct hotel sale
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Confidential first call
A phone conversation about the property and your reasons for considering a sale. We ask where it is, how many keys it has, whether it is branded and roughly how it has been performing. You can ask who we are and how we buy. Nothing is requested in writing yet.
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NDA and document request
Before any financials change hands, both sides sign a non-disclosure agreement. We then ask for the trailing-twelve-month profit and loss statement, the prior two or three years of results, and an STR report if the hotel takes part in one.
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Letter of intent
If the numbers support a purchase, we send a letter of intent. It states the price, the deposit, the length of the due diligence period and the main conditions. It is the outline of a deal, not the deal itself.
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Purchase agreement and due diligence
Attorneys turn the letter of intent into a purchase and sale agreement. Once it is signed and the deposit is with escrow, we inspect the property and verify what we were told.
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Closing through title or escrow
A title or escrow company collects the documents and the money, pays off existing loans from the proceeds, records the transfer and releases the balance to you.
Each stage is expanded below. If you would rather begin with who we are and what we purchase, the kinds of lodging property we consider are listed separately.
What we ask for before making an offer
An offer made without documents is a guess, and guesses get renegotiated. We would rather ask for more at the start and stand behind the number.
Financial records
- Trailing-twelve-month profit and loss statement, by month
- Annual statements or tax returns for the prior two or three years
- Occupancy, average daily rate and room revenue by month
- An STR report, where the property subscribes to one
These feed directly into price. The page on how a buyer values a hotel shows what is done with them.
Property and brand documents
- Room count and room mix
- A list of recent capital projects and known repairs
- The franchise agreement and the latest brand inspection, if the hotel is flagged
- Any property improvement plan the brand has issued
Debt and title basics
We ask what is owed, to whom, when the loan matures and whether it carries a prepayment charge. If a maturity date is what is driving your decision, read our notes on selling with a hotel loan coming due.
What a letter of intent covers
A letter of intent is usually a few pages long. It is generally non-binding on price and terms, though parts of it, such as confidentiality, may be binding. Have your attorney read it before you sign.
Typical contents
- Purchase price and how it will be paid
- Earnest money deposit and when it becomes non-refundable
- Length of the due diligence period
- Conditions such as financing, lender consent or franchise approval
- What is included: furniture, fixtures, equipment, inventory and reservations on the books
- A target closing date and what could move it
Who the buyer will be
The letter names the purchasing entity. We may buy in our own name, with capital partners, or through an affiliated buyer, and the document you sign will say which. The same disclosure appears in the terms that govern this site.
What happens during due diligence
Due diligence is the buyer checking the facts. Expect requests, site visits and questions. It runs for the period set in the purchase agreement.
Inspections and reports
A walk through every room type and the mechanical areas, usually with a property condition assessment, an environmental report, and a title search and survey.
Financial verification
Bank statements, tax returns and lodging tax filings are compared against the profit and loss statements.
Approvals from third parties
A lender may need to consent, or a new loan may need to be approved. On a branded property the franchisor must approve the new owner, which we explain on the page about selling a franchised hotel.
Visits can be arranged so that staff and guests are not alerted. Our approach is set out under keeping a hotel sale confidential.
Closing day and the handover
Closing is administered by a neutral title or escrow company. It receives the purchase funds, pays off recorded loans and liens, prorates taxes and utilities, and records the deed.
The operating cutover
Hotels change hands at a set hour. Guest ledgers, advance deposits, inventory and cash on hand are counted and settled at that point, and the agreement spells out who is responsible for what before and after.
After closing
Sellers are sometimes asked to stay available for a short transition. Whether that applies, and on what terms, is negotiated in the purchase agreement.
How long a hotel sale takes
There is no honest single answer. Timing depends on how quickly documents arrive, how due diligence goes, whether a loan is being paid off, assumed or newly originated, and how long a franchisor takes to approve a transfer. We give you our expected timeline in the letter of intent and tell you promptly if it changes.
A direct sale is not automatically quicker or better than other routes. Our comparison of brokers, auctions and direct buyers weighs them side by side, the seller FAQ covers the questions that come up most, and details you send through the contact page are handled as our privacy terms describe.
Start with a confidential conversation
Tell us where the property is, how many keys it has and whether it carries a brand. We read every submission ourselves and call you back at the number you give.
Nothing you send is passed to a listing service, and sending it does not commit you to anything.
Tell us about the property
Read by the buyers. Never listed, never advertised.