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Jett Hospitality Fund, LLC
DISCLAIMER
The information and materials presented to you are furnished to share with
you the presenter’s opinions on the subject matter based upon general
research and analysis. The projections and projected results and outcomes
are not guaranteed for any particular investment, property or individual. There
are several risk factors and scenarios that can alter the projections and
projected results and outcomes. The results described herein may vary,
depending on a multitude of factors including, but not limited to, location of
the property to be acquired, market share and market saturation of the
location, the condition of the individual property, the commitment and effort of
the operating parties involved, and the condition of the U.S. economy and its
impact on the hospitality sector. No financial or legal advice is given herein
and the information herein should not substitute the advice of any expert or
professional. You should consult with financial and legal professionals before
taking any action based on the information presented herein. The presenter of
the information provided herein is not an agent of any of the companies
described herein and does not have authority to take any action or undertake
any obligation on behalf of any of the companies described herein.
Overview
•The Jett Hospitality Fund is tailor made for
our times. By leveraging the availability of
hotel properties at historically low prices in
concert with a hotel industry on the upswing.
We are presenting investors a unique
opportunity to partner with a demonstrated
industry leader.
Current Commercial Market
• Many commercial property owners, across all
asset types, are at a point where their current
loans must be refinanced.
• Typically, property values do not support a
refinance, either due to general market
conditions or poor management/marketing of
the specific property.
• These conditions certainly exist for the
hospitality sector.
Hospitality Market
• $120 billion hotel & motel industry populated by
40,000 firms (with 50,000 single-location
establishments) in U.S.
• Personal income & tourism spending: up over
previous year
• 2,500+ extended-stay (ES) locations across
country; growing
• ES segment experiencing some best quarters to
date
Hospitality Sector Conditions
• Many “popular price” properties were built
and/or purchased during the 2000-2005 time
frame.
• The market supported loans on these
properties based on income projections.
• Poor management and/or marketing resulted in
properties whose values dropped; thus, there
is insufficient value in these properties to
support successfully refinancing the underlying
loans.
• Numerous properties are now being foreclosed
by both commercial and private lenders.
Property Condition and Value
• The majority of these now “lender-owned”
properties are in good condition, since they
were built within the past twenty years.
• Losses in value can be due to poor
management and/or marketing that drove
down occupancy rates and lowered net
operating income (NOI).
Sample Before Photos
Sample After Photos
Financing For Current Owners
• Although many owners may have properties
that will break even or show a small profit
(even with low occupancy rates and poor
marketing), they are unable to obtain the
required refinancing for their current loans from
either commercial banks or private lenders.
• In addition, governmental programs (especially
SBA) are reluctant to lend without strong
owner or property financial and/or performance
history.
Advantages for “Daily Stay” Customers
• For “daily stay” customers, most amenities of higherpriced properties can be delivered at a cost savings,
appealing to both business travelers and vacationing
guests:
– Pool
– Continental breakfast
– Cable TV
– Free Wi-Fi
• Lack of on-site restaurants, gift shops, etc. are
mitigated by close proximity of local retailers and
restaurants.
• Opportunity for extended stay guests is great.
Template for Property Selection
• Minimum of 50 rooms; ideally, property will have in
excess of 100 rooms.
• Multiple buildings are preferred; this allows for one
building to be developed for extended stay, with the
other(s) as daily stay units.
• Frontage or easy driveway access to a roadway with
a minimum of four lanes of traffic.
• Metropolitan area of at least 50,000 population,
preferably 100,000.
• Purchase price target is around $10K per room.
Sources of Available Properties
• Current sources include a New York based
hedge fund.
• Additional sources are also providing
properties on an ongoing basis:
– Hospitality brokers
– Internet listing services
– Banks
– Private lenders
– National Network and Referral System
Typical Project Investments
• 75+ unit properties are currently being
purchased within the $ 700,000 to $2,500,000
price range.
• We will be flipping those properties for net sales
profits of $100K or more.
• Based on either a market appraisal (by a
licensed appraiser) or NOI projections based on
current market occupancy rates and past
experience, these properties will have stabilized
market values in the range of $1.5 to $4 million.
Investor Participation
• 7% return on investment paid out quarterly.
• Fund will have 1st lien position on the property.
• Profits will be split between investor and fund
managers.
• Investors will receive 60% of net sale profits.
• 60 month hold on initial investment then clients
can request funds to be released if needed.
• Minimum investment 50K dollars.
• Self-Directed IRA funds accepted.
How to Get Started
1. Contact a member of the Jett Hospitality Fund
Sales Team to get a copy of the PPM and
Executive Summary.
2. Complete the Investor Suitability Questionairre.
3. Sign Operating Agreement and Subscription
forms.
4. Complete Contracts and W-9 form.
5. Wire funds to Jett Hospitality Fund, LLC.
Contact:
Jason Schubert
CEO, Jett Hospitality Fund
[email protected]
P: 512-788-1710
F: 512-949-4933