Dan McDevitt

Memphis, Tennessee, USA

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$elling Ho$pitality

Playing Nice With Others

The question often comes up in meetings with sellers.  “How are we going to communicate my intentions to sell my business and at the same time maintain confidentiality?”  This should be a serious concern for the owner, broker, intermediary and all other stakeholders. 

Loose lips sink deals.

At the appropriate times, you will have sellers and buyers signing off on various formats that will include confidentiality agreements, non-disclosure documents and letters of intent.  The intent is to keep the sellers and buyers mutual business interests and discussions private, in the conference room and off the street. 

Here is a real-time sample document in use in a current sale situation as one example of how to communicate non-identifying business information. 

CONFIDENTIAL 

An unparalleled lodging property that is purpose-built with comfort, maintenance free operation and safety in mind.  The neighbors are resorts, local shops and fine restaurants.

The physical plant consists of three modern constructed buildings; a four-story Nantucket style inn with twenty guest rooms, an adjacent ocean house with four deluxe guest suites, and a cottage with one 2-bedroom 2-bath suite, kitchen, living and dining rooms, and an ocean-facing deck. 

The inn offers scenic views and 150+ feet of ocean frontage in the Southeastern United States. 

The professional management and staff provide caring efficient guest-friendly service. 

Full financial information is available to assist the buyer in performing due diligence. 

Overview of Investment Elements

Please note that financial numbers represented here are rounded down. 

Twenty-five (25) rooms with a year round occupancy rate over 75% at an average daily rate of $200+, producing over $1,500,000 U.S. in bed & breakfast income.  $225,000+ additional income is generated from food & beverage, social functions, packages and other services.

Stable growth oriented annual total income consistently approaches or exceeds $2,000,000 U.S.

Buyers with the means to make a $2 million equity investment can enjoy the dual benefits of living in and doing business in this beautiful and rewarding setting.

Example: Debt service on $6 million @ 7% interest, 20-year amortization, is $558,215 a year, at $46,518 a month.  Seller and buyer may favor a section 1031 tax-free exchange.

Investment identification is available to qualified parties in non-disclosure agreement.

 

 

 

Dan McDevitt, Marketserve Management & Marketing Studio

President@dan-mcdevitt.com

 

 

 

$elling Ho$pitality

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