Important Things You Need To Consider Before Buying Foreclosed Hotel Properties When buying foreclosed hotels for sale in California (CA), there are a lot of things you need to consider to ensure you are buying the right property. Since the Covid-19 pandemic outbreak, the demand for hotel rooms has gone low and this has resulted in a loss of revenue which has led to foreclosures. Over five hundred hotels are in foreclosure. While these properties may appear attractive to potential investors, the circumstances of the pandemic demand proper due diligence to ensure you buy a profitable property.
Buyers wishing to capitalize on cheap hotels should employ proper due diligence assessments recommended for property acquisitions and additional assessments to address risks associated with the pandemic. Standard due diligence for acquiring a hotel Property condition assessment on a commercial property buy sell app will give you an accurate picture of the condition of the building and various systems of the building, including deficiencies that need immediate repair and foreseen expenses over the period of the report. If your property acquisition involves a change of brands or/and a property improvement plan, the property condition assessment may allow you to save money by coordinating the necessary maintenance and repairs with the implementation of the redevelopment or remodeling required by the property improvement plan. Environmental site assessment For any commercial real estate transaction, the environmental site assessment should be standard. The level of environmental site assessment you choose should depend on your risk tolerance and your financing. In some cases, a desktop environmental report may suffice. However, only a phase 1 environmental site assessment will protect you from
environmental liability. Your due diligence consultant can advise you accordingly as far as the environmental screening for the transaction is involved. ALTA survey A combination of title survey, boundary survey, and location survey, lenders for CRE transactions require the ALTA survey. It can also protect you from any future liability in the form of encroachments, boundary line disputes or easement claims. Acquiring hotels under construction If you are buying a hotel that is still under construction, whether new construction or renovation, it is important to carefully assess the status of the project. There has been a great impact on construction due to Covid-19 and this impact includes work that is in standstill mode, work stoppages, impacts on labor and material concerns. As a buyer of foreclosed hotels for sale CA, you will want to confirm that the project and contractor are on budget and schedule. You will get a clear image of the situation from a construction status report.