If this is your first hotel acquisition or if you have not purchased a hotel in a long time, this may be of interest to you.

1.Determining your upper price limit:
Figuring out your upper price limit early in the game is a time-saver because it allows you and your agent to focus only on properties that you are qualified to purchase. This is often largely based on the amount of down payment that you have available.

2.What to look for at a property showing:

• Always take into account the condition of the property because your final acquisition cost will be the price of the property plus fix-up costs.
• Consider the franchise flag and management operator.
• Check other hotels in area.
• Put yourself in the hotels customer's shoes.
• Ask owner to identify room-night demand generators.

3.Courtesy and ethics when looking at properties:
Ask the agent to schedule appointments. Often the agent can accompany you to the property showing, at times it is also possible to have the owner or hotel manager meet you at the property to show you rooms and answer technical questions.
Caution: It is almost never in your interest to discuss price with the owner during any showing. Always work through the agent when it comes to negotiations.
Also, it is very bad form, and has led to legal action, when the buyer calls the owner directly or speaks to employees directly without approval of the owner or agent. The reason is that most sellers are extremely nervous that their employees, suppliers or customers may find out the property is for sale prematurely and will then abandon the seller.

4.Determining the value of the property to you: See our page on Valuation Aspects.

5.Determining what price to offer:
As a general rule of thumb, first determine what the property is worth to you, and be prepared to pay that amount if necessary. Don't focus too hard on the amount the seller might be making on the transaction; in the final analysis, the seller's profit is totally irrelevant to your purchase decision and overall success with the property.

6.Authenticate the financial data and other property details:
The financial information should include a couple of year’s revenue history and expense history for one year. A buyer would like access to all income and expense information for the past three years to gain a comfort level that the property will perform well in the future.

7.Terms of business to make an offer:
Once you have decided that you wish to move forward with an offer and meet the vendor, it’s imperative that you present your offer in a professional written format, together with a proof of funding document.

This allows the seller to take your interest seriously, giving you an upper hand over other potential buyers, who may also be interested in the property. By following the  procedures outlined below, ensures that you are in a strong position, to receive confidential information, such as financials and valuations, as well as more detailed due diligence on the property.

• Confidentiality Agreement is often required to protect the goodwill of the business in both the buyers and the seller's interest - especially when the sale of a business is a confidential or a sensitive matter.
• Letter