Hotel Investor Financing – How to Fund Your Property Improvement Plan (PIP) 

Resort swimming pool and hotel

Hotel investors who are seeking financing for new hotel construction or for acquisition and remodel of an existing hotel will certainly face challenges in today’s market but can still secure a great deal with the right approach. 

What is a Hotel PIP? 

Hotel investors who are pursuing a partnership with an established hotel brand (referred to as a “flag” in the industry), such as one of the many hotel flags from Marriott, Hilton, Wyndham, or Choice Hotels, will need to work to execute on a property improvement plan (PIP) to meet and uphold the flag’s standards. 

The flag will take the lead in providing the hotel investor with a PIP, which will cover everything from the building exterior to the furniture inside. The investment amount needed by the hotel investor will be represented by the “cost per key” (where key = room, and the total investment needed is calculated by multiplying the cost per key by the total number of rooms). 

Once the hotel investor has the PIP in hand, it’s time to explore financing options. Our hotel financing experts at Lincoln James Capital have outlined a few important recommendations below on how to fund your PIP. (Note – The same recommendations apply to hotel investors building or buying an independent hotel.) 

Also – be sure to download the Insider’s Guide to Hotel Financing in a Challenging Market (featured at the most recent AAHOA Convention). 

Move with a sense of urgency 

At the time of this blog post (May 2022), rates are rising, and credit policies are tightening. This is a trend that will continue for at least a few years, which means that time is of the essence. Pursue your financing with a sense of urgency so that you can take advantage of lower rates. 

Prepare a strong financial package 

Prioritize liquidity in your financial package. When wealth is tied up in real estate or other illiquid assets, it creates challenges with financing. The more cash or near-cash assets you have available, the more flexibility you will have with financing options. 

Consider multiple types of financing 

While hotel investors should pursue financing with a sense of urgency, we do not recommend going directly to a bank or only considering one type of financing. While it may seem like the “fast” way to get a deal done, it can create a setback for the hotel investor financially. An experienced capital markets advisory firm will help you prepare effectively, move quickly, and explore multiple types of financing. 

Explore combinations of financing options 

A well-developed capital stack will usually have multiple types of financing, helping hotel investors better manage their financial needs. Common hotel financing options include: 

  • Small Business Administration (SBA) Loans 
  • Bank Loans
  • Life Companies 
  • Bridge Loans 
  • Commercial Mortgage-Backed Securities (CMBS) 

The hotel industry is capital-intensive but has historically provided excellent returns on investment. If you plan to pursue financing for a hotel investment, schedule some time with the experts at Lincoln James Capital to become introduced, begin developing a relationship, and answer any questions you may have. 

Don’t forget to download the Insider’s Guide to Hotel Financing in a Challenging Market (featured at the most recent AAHOA Convention). 


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Brigitte Grava

Financial Analyst

Brigitte Grava, an accomplished scholar from the University of Tampa, holds both a Bachelor’s Degree in Economics and a Master’s of Science Degree in Entrepreneurship from her alma mater. Brigitte’s dedication to academic excellence is shown in her performance as an undergraduate student as she was invited to the Adam Smith Economic Honor Society in addition to graduating from her Master’s program at the top her class in 2022. With over 5 years of industry experience, including a specialized focus on mergers and acquisitions during her 3-year tenure at a boutique investment bank, Ms. Grava brings a wealth of financial expertise to her endeavors. Her exceptional execution of economic and financial analyses, coupled with her strategic insight, empowers her to provide invaluable recommendations for business growth and corporate development. Brigitte is skilled at navigating intricate M&A transactions, consistently delivering optimal outcomes for her clientele. Her track record speaks volumes about her ability to handle every facet of these transactions with finesse, resulting in remarkable results for her clients.

Alyssa Beatrice

Director of Marketing

Alyssa Beatrice is the Marketing Director of Lincoln James Capital, leveraging over 7 years of expertise in both B2B and B2C domains. Holding a Bachelor’s Degree in Business Administration with a major in Marketing, Alyssa’s career is driven by innovation, determination, and data-driven results. Her impressive track record showcases numerous successful online and offline marketing campaigns, reflecting her inventive spirit and collaborative team approach. Alyssa’s unwavering passion for achieving exceptional outcomes has made her an invaluable asset to our team at Lincoln James Capital.

Andrew Millis

Commercial Loan Originator

Armed with a bachelor’s degree in business administration, specializing in Personal Finance from the University of Wisconsin Stout, Andrew possesses a wealth of knowledge and expertise in the Commercial Finance industry. With a solid background in community banking spanning 3  years and an additional year as a commercial credit analyst at Bankers Healthcare Group, he has demonstrated exceptional proficiency in the financial domain. Notably, Andrew has also successfully ventured into the real estate sector, establishing three thriving businesses in recent years.

Beyond his professional pursuits, Andrew cherishes quality time with family, friends, and his two beloved dogs. He finds solace in exploring new destinations through travel and engaging in outdoor activities such as hiking, golf, pickleball, and hockey. A true sports aficionado, he ardently supports the Green Bay Packers, Milwaukee Brewers, and Chicago Blackhawks.

Alex Cheng

Senior Vice President

After receiving his Bachelor degree in 1978, Alex started his professional career with a reginal CPA firm in New Orleans as Auditor. In 1980 he moved to Los Angeles to join ABPA, a national employee benefit administration firm.  He was promoted to Accounting Manager when he left the firm in 1988 when he was recruited by Dallas TX based Caltex petroleum Corporation, a JV of Chevron USA and Texaco Oil Company.  Alex served as Director of Finance in various countries, including the Philippines, Greater China (China, Hong Kong and Taiwan) and Australia.  Alex left Caltex in 1995 to start his own accounting firm in Burlington North Carolina.  By 2006 his firm has grown to a regional presence with offices in Cary, Burlington, Greensboro, Charlotte and Rock Hill, SC.  Alex sold his successful practice in December 2006 just before the latest financial meltdown.  Since 2007, operating under the firm name Alliance Consulting Group, Alex has been a financial and management consultant advising clients on complicated fiscal matters and improve overall efficiency in management and operation.  In 2015, Alliance Consulting added digital marketing to its service area to meet the changing landscape of business.  Currently his firm manages private equity funds of Family Offices and other high net worth individuals, with focus on multi-family apartments and purpose-built Student Housing apartments near major universities throughout the country.