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New Hostel in Michigan USA. Any advice?

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T6rabenberg started this discussion 10 years 6 months ago

After traveling the world and publishing my first book about my adventures (PartyLikeABillionaire.com) I noticed there is no hotels in Michigan USA. I have traveled the world and stayed in over 50 hostels and enjoyed the chain famoushostels.com the most.

I can see they all have a great flow and even key cards for the rooms that help to ensure a pleasant stay. This is something I would like to bring to Michigan. I have a number of investors lining up after they got wind of my next adventure.

I would like to start a chain of hostels in the usa since one of my investors is a very big name. I have not submitted an official proposal yet and this is why I am coming to you guys!

My goal: to have 12 rooms and a total of 40 rooms (4000-6000 sq ft) (ADVICE ON SIZE PLEASE)

After having lunch with a very large developer he has given me the scoop on a very nice location. I have two choices...

1. Two story building with 2500 sq ft per floor recently renovated in a beautiful building built in 1891. Rent is $3300 a mo per floor. A total of 5,000 sq ft and renting $6600 a month. (Looking at renting both floors) Renavation would be very little (apx $20,000 per floor guessing)

2. Old warehouse building needing extreme renovation min $150-250k to get it up to code. But rent for this location would be near $2000 a mo for 6,000 sq ft.

What would your advice be? Any help on a business plan layout? I am an engineer and see the numbers are here but putting it into a pitch is looking to be harder than expected.

Thank you in advanced.

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Rucksack Brian

10 years

Hi T6rabenberg, welcome to the Forum!

With the first property, if you are able to get both floors, then I would recommend it. There are a lot of hostel operators who have serious problems with neighbors. If you can avoid this hassle from the beginning it would probably be best. Does that property meet the code requirements for a hostel/hotel? In your opinion, is the layout appropriate for a hostel?

If the warehouse needs extensive renovation anyway, then you can design it exactly the way you want. For example, you can put bathrooms and utility closets in the places where you will actually need them. Plus you can build everything to code from the very beginning. Of course some of the downsides are that this will cost you more money up front and take longer to get the hostel operating.

This start a hostel thread has some links that might be useful for your business plan.

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