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The Best Way to Finance Hotels in 2021: SBA 504 Green & C-PACE with Senior Debt - IFP Episode 144 - YouTube
Channel: Investor Financing Podcast
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the good news is there are good there are other聽
ways of getting it done and that's what we're聽聽
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going to talk to you about today and your two聽
best options for projects under 25 million dollars聽聽
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is the sba 504 green and the other option is聽
see pace in conjunction with bank or a senior聽聽
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loan like a bank loan credit union or a private聽
debt fund that will do the construction of this聽聽
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hospitality because cpace聽
goes into the capital stack聽聽
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almost like in second position but it's actually聽
an assessment through the property taxes聽聽
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welcome to the investor financing podcast where聽
we interview real estate investors and lenders聽聽
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so you can learn all the secrets to getting your聽
projects funded and scale your portfolio and now聽聽
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your host beau eckstein hello and welcome聽
to another episode of the investor financing聽聽
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podcast and i'm your host boxing and today we're聽
going to talk about how to finance a hotel in 2021
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how to finance a hotel in 2021 which has its own聽
challenges with covid and so forth a lot of the聽聽
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banks because the hotel hospitality industry has聽
gotten clobbered are not lending on ground up聽聽
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construction projects for hospitality so it's been聽
become very challenging but the good news is there聽聽
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are good there are other ways of getting it done聽
and that's what we're going to talk to you about聽聽
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today and your two best options for projects聽
under 25 million dollars is the sba 504 green聽聽
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and the other option is c pace in conjunction聽
with bank or a senior loan like a bank loan聽聽
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credit union or a private debt fund that will聽
do the construction of this hospitality because聽聽
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cpace goes into the capital stack almost聽
like in second position but it's actually聽聽
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an assessment through the property taxes both of聽
these loans the 504 for example 504 green on a聽聽
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on a hotel you can get up to 85 percent leverage聽
because it's a single use single use properties
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are limited to about 85 percent聽
versus multiple use you can get 90聽聽
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on a 504. the reason i'm i'm pitching the green聽
the 504 green is because it allows you to have聽聽
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up to 16 and a half million uh 6.5聽
million dollars of outstanding sba聽聽
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debt versus just going uh sba you can only聽
have uh collectively 5 million so i always聽聽
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tell clients to look at going green first one聽
you're doing good for society and the environment聽聽
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two you can get more loan proceeds on聽
future expansions and future properties聽聽
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and it's not that difficult to qualify for the聽
sba 504 green now when you're looking at the聽聽
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other gamut you can look at um cpace and sometimes聽
people don't want to go the route of going sba聽聽
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maybe they're getting scrutinized because聽
their tax returns don't look that positive聽聽
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because they've got tons of write-offs and聽
all that stuff so sometimes finding a debt聽聽
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fund in c-pace you're still able to get higher聽
leverage because the bank or debt fund could do聽聽
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60 to 70 percent loan to cost and then cpace comes聽
in fills in that capital stack and so collectively聽聽
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you might only have to bring in 15 equity 15 20聽
equity so these are the best options right now聽聽
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to fund hotels under 25 million total project cost聽聽
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if you're interested in learning more just聽
schedule a call below on my calendar happy to talk聽聽
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to you about all the programs out there and find聽
something that works for you and your property聽聽
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thanks for listening to the investor financing聽
podcast for show notes and useful resources聽聽
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please visit investorfinancingpodcast.com聽
for questions or comments email info investor聽聽
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financing podcast dot com if you enjoy our show聽
please share it with your network until next time
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