What We Are Very Good At
Equitable Investments, LLC specializes in a particular niche of the Hospitality Industry (Hotels). Below is a broader picture of what they do, how they do it, and what they have done successfully even during bad times.
They are proud of their achievements when many around them haven't done so well in the rough Pandemic period.
If you have questions for them and how you can learn more about their company and the success they are having, please contact them at their home office.
Strategy & Organization
Equitable Investments had researched the Hotel Industry for two years and developed a business plan for success. As Equitable Investments, LLC (EILLC) invested
in their first hotel – the Phoenix Bell Hotel. The hotel was bought for about $3.2 million. Over the next two years, the hotel increased in value to about $5 million. The work of rehabbing the hotel continued during this period and the dividends received were very good.
Next, EILLC developed a Marketing Plan to generate a continual stream of hotels that fit their ideal hotel to be purchased. From that program, several prospective hotels were pursued and a series of 4 hotels were generated. Three of those hotels became the additional hotels currently in their portfolio.
THEIR STRATEGY: The complete strategy is proprietary but a few of the basics are:
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The hotel must be a Blue-Collar Hotel
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It must have an excellent location
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The area has good to excellent growth and/or business activity
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In the immediate vicinity of a major busy highway system
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The hotel needs to suffer from poor maintenance by the current owner
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The owner must be motivated to sell
There are other items they look for but these are several of the high-priority items.
Where EILLC does business
Because they don’t feel a lot of pressure from other competitors, they only work within the US. Most of their efforts are focused in the Sun Belt area. Communities with
“unfriendly to business” governments, are skipped over.
Corporate Finance
Hotels are acquired through various forms of financing. Private investors, Owner Financing, Banks, SBA, and other means are at our disposal. Each hotel is bought using an LLC created in the state where the hotel is located. An attorney is also used from that state.
Private Investors will be Members of that LLC. The nature of most Members is that of a Passive Investor.
Hotel Management
Overall Hotel Management (OHM) is a company that we use to manage each hotel. They can cover as many of the duties necessary to get the hotel repaired and ready to become "Fully Performing" (increase the REVPAR). They usually acquire "Underperforming" hotels.
OHM provides supervision over all facets of renovation, staff training, job descriptions, hiring, policy creation/implementation, creating a marketing program and generate regular reports to the LLC’s Officers.
Sustainability
Over the past 10 years or so EILLC has become very focused and successful in its niche and makes a very handsome return. Two major components that have contributed to their success and will continue aiding their future success are the following:
First Their business model is based on the most explosive niche of the Hospitality Industry. The Extended Stay part of the industry has had huge growth since its beginning in about 2012. Their rehabbed hotels are set to withstand a recession or downturn in the economy. As an example, in 2021 the Phoenix Bell Hotel was reported to have a 95% Occupancy Rate for the entire year. Some of the giants of the industry, like Hilton had to shut down during the Pandemic. As companies dial back during slower times EILLCs blue-collar hotels fill up due to the same economics. The ADR (Average Daily Rate) does go down a bit but overall, the bottom line grows.
Second They have developed a marketing program that focuses on most of the hotels that fit their target models. Using Key-Man-focused marketing allows them to connect with many of the head decision makers at the earliest point in time when the idea of selling is germinated.
Corporate Development
As they continue adding more hotels to their portfolio they also have an active awareness program that is ongoing. They are actively attending shows, investment clubs,
investment meet-up groups along with investment real estate brokers and showing how the Hospitality Industry should be looked at as a great place to become happily involved.