How I Buy Hotels With Structure — A Step-by-Step Asset-Based Deal Walkthrough
Written by Jai Thompson
Principal Buyer | Pretty Boi Estates™
Why This Article Exists
This article is written to teach, not impress.
It shows:
How an asset-based buyer actually structures a hotel deal
Why recorded price matters
How seller payoff works without confusion
Why lenders are protected
And how every dollar is handled through escrow
This is the Pretty Boi Estates™ 85 / 45 / 24 model, explained so clearly a third grader can follow it.
📍 Asset Overview (Example Deal)
Asset Type: Boutique Hotel (Casino-Adjacent)
Location: Las Vegas, Nevada
Rooms: 60
Strategy: Income-first, hands-off, professionally operated
Target Close: Twenty-three days or less
Step One: Establish the Real Value (Not Hype)
Fair Market Value (FMV):
$5,000,000
Hotels allow a premium when income supports it.
For hotels and casinos, that range is 25% to 40%.
We acknowledge the upside — but we never structure off the premium.
Structure always starts with the lower number for safety.
Step Two: The 85 / 45 / 24 Stack (Clean Math)
Offer Price — 85%
$5,000,000 × 0.85 = $4,250,000
This is the economic agreement with the seller.
Recorded Price — 45%
$5,000,000 × 0.45 = $2,250,000
This is what gets recorded:
Lower taxes
Lower insurance exposure
Lower liability footprint
Lender Position — 24%
$5,000,000 × 0.24 = $1,200,000
Stack Safety Check
$1,200,000 ÷ $2,250,000 = 0.53 (53%)
✔ Well below the 78% ceiling
✔ Lender protected
✔ No leverage stress
Step Three: Seller Legacy Payoff (This Is Where People Get Confused)
Seller Legacy Payoff Formula
Offer minus lender
$4,250,000 − $1,200,000 = $3,050,000
That is the seller’s full economic outcome.
How It Is Paid
At Close: $650,000
Rolled and Documented: $2,400,000
No seller carry notes.
No side agreements.
Everything documented and tracked through title.
This gives the seller:
Certainty
Speed
Clean accounting
No buyer default risk
Step Four: Title-Directed Disbursements
Cash In = Cash Out (This Must Balance)
Cash In (Lender): $1,200,000
Now we allocate it once, correctly.
Disbursement Breakdown
Seller payoff at close: $650,000
Buyer cash back: $90,000
Buyer salary (first year): $120,000
Kayan Trust allocation: $50,000
Lender fee: $24,000
One-year lender payment reserve: $84,000
Operating reserve: $92,000
Furniture reserve: $40,000
Used branded shuttle vehicle: $30,000
Closing, title, legal: $20,000
Total
Add them:
650,000
90,000
120,000
50,000
24,000
84,000
92,000
40,000
30,000
20,000
= $1,200,000
✔ Balanced
✔ Escrow-controlled
✔ No personal cash
✔ No post-close surprises
Step Five: Day-One Income Test (Required)
Simple Income Math
Rooms: 60
Average nightly rate: $210
Occupancy: 65%
Annual room revenue ≈ $2,990,000
Expenses (Conservative)
Operating expenses at 55%:
$2,990,000 × 0.55 = $1,644,500
Net Operating Income
$2,990,000 − $1,644,500 = $1,345,500
Day-One NOI Test
$1,345,500 ÷ $5,000,000 = 26.9%
✔ Pass
✔ Far above the 9% minimum
✔ Income-first, not speculative
Step Six: Why Lenders Say Yes
Loan to value: 24% of FMV
Debt coverage ratio: comfortably above two times
One full year of payments reserved at close
Real income, not projections
Clean title disbursements
This is capital preservation, not gambling.
Step Seven: Why Sellers Say Yes
No financing risk
No retrades
No waiting on buyer credit
Fast close
Clean escrow
Certainty beats price when time and risk matter.
Step Eight: Why This Model Closes
Structure before emotion
Income before appreciation
Escrow before trust
Stewardship before ego
This is why we close consistently in under twenty-three days.
Final One-Page Memo (How Zia Should Summarize)
Offer: $4,250,000
Recorded: $2,250,000
Loan: $1,200,000
NOI: $1,345,500
Day-One Yield: 26.9%
Close: ≤ 23 days
Structure over sacrifice.
Stewardship over struggle.
Every deal builds legacy.
— Jai Thompson