Financing the Purchase of a Hotel for Foreign Investors with Conventional Loan in Georgia
The Microtel of Cartersville, Georgia, a lender owned hotel was a great turn-around opportunity for a seasoned hotelier with strong operational and marketing background in the hotel industry. However, financing lender owned hotels are very challenging as the statistics reports are often missing, the maintenance records generally are not available, the historical tax returns hardly exist, and the financials provided by the receivership show little or no profits and are at best for a few months to a year. Further hurdles faced in this project was the fact that the majority of ownership was held by foreign investors who live abroad. CMBS conduit hotel loans can be structured for foreign purchases as this type of loan is non-recourse and accommodates foreign investors but the requirements are tougher and not many hotels qualify for these loans. The alternative is simply a bank loan but the task is to persuade a bank to offer a loan on a company with all or majority foreigners.
Scientific Capital was able to structure a conventional loan for this property in spite of the fact that it was a lender owned hotel and was acquired by a company with majority ownership of foreign investors.
First of all, I like to thank you for closing the deal for us. Your professionalism and dedication from the very beginning is admirable. You understand what a buyer needs and in our case you made things happen for us by getting in touch with the right bank. Throughout the process, you have communicated promptly, answered all questions in a timely manner. To sum this up, very impressed doing business with you and looking forward to doing many more deals in the future.