Welcome to our second deal bulletin.

This newsletter is designed for those interested in SMB Acquisitions and Micro Cap Private Equity.

We target Boring SMBs + Micro SaaS. Our investment mandate targets profitable, cash-flowing businesses under $10M in total enterprise value.

Here we will post the most compelling deal opportunities to readers.

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Always looking to connect with new valuable people in the community. Onto this week’s deal 👇

Trailing Deal Posts:

3/15 | Buy an 18-Hole Public Golf Course

SMB Deal Of The Week - $5.5MM Holiday Inn Express

Ever wanted to own your own Hotel?

How about your very own Holiday Inn Express?

Location - Scottsdale, AZ

This week’s SMB deal of the week is the opportunity to purchase and run your own 122 hotel room Holiday Inn Express in Scottsdale, AZ.

The property includes an Outdoor Pool + Business Conference Center.

Note: If your brain goes to the old commercial campaign "well I stayed at a Holiday Inn Express Last Night”…..you are in the right place

Despite my team not remembering the campaign (I am dating myself) I remember it well

Holiday Inn Express Rapper - YouTube

Holiday Inn Express Surgeon - YouTube

Deal - Holiday Inn Express

Location - Scottsdale, Arizona

• $5.5M Ask Price At Auction

• 122 Rooms

• Business Center

• Outdoor Pool

• 2.55 Acres

• Renovated in 2019

Why Would I Buy A Hotel? (Seller View)

• Scottsdale Arizona is a really popular tourist destination domestically and internationally

• The location includes an Outdoor Pool and Business Conference Center

• Business Center could be a good way to generate additional revenue in busy visitor town

• The city saw 5.3MM domestic and international visitors during 2023

• It is a hot spot destination for specifically for short term stays and vacationers

• This Holiday Inn Express was recently renovated in 2019 and includes a fitness room, an outdoor pool and a business center

• Located on a corner of Scottsdale that has exposure to 74,000 visitors daily

• Recently installed solar panels on the room to lower energy costs

Why Would I Not Want To Buy A Hotel? (Buyer View)

• High capex requirements are needed to build and maintain Hotels. If there are old parts of Hotel needing upgrades could cost additional $$$.

• Competition from Air BnB and other Hotels in the area is fierce, hard to differentiate yourself

• Challenges in the labor and hiring market right now are making it difficult to work in hospitality. Would want to understand the staff and where they are now now. Also identify any new hires that are needed.

• The rise in interest rates makes it hard to borrow in this market. Need the financial overview first to see if there is margin to support borrowing.

• What is the Hotel up for sale? Need to schedule a call with management to understand the reason behind the sale.

What Are Typical Financing Terms To Buy Your Own Hotel at $5.5MM? (Estimate)

Can I use the SBA Loan to acquire a Hotel?

Yes, because there is an operating company the Hotel is eligible for SBA financing.

It would require $250K - $750K of cash + investor equity to raise enough to acquire the hotel.

SBA Hotel Loan Terms & Rates

• The average interest rate is 9.0% - 10.5% on hotel loans

• Down payment requires 10 - 20% equity

• Allows for 80 - 90% leverage on this acquisition

• Additionally, the SBA Loan will be amortized over 25 years instead of 10 years due to the Real Estate involved in the transaction

Typical SBA Hotel Financing Terms:

Chart Source: https://www.sbalenders.com/top-banks-hotel-sba-loans/

Chart Source: https://www.sbalenders.com/top-banks-hotel-sba-loans/

As we are limited at $5MM for this transaction, you would need to raise an additional $500K to close the remaining gap in the purchase price.

Either way there is someone in our network that will enjoy this deal. Please reach out with any questions:

• $5.5M Ask Price

• $250K of Seller Equity Partial or Full Standby

• $250K of Buyer Equity

• $500K of Investor/ LP Equity

Overall Investors being asked to put up $250K - $750K of Equity to take over $5.5M Ask Price.

What are your thoughts on this deal?

Reach out to let us know your questions and comments.

See you next week.

Disclaimer: This communication has been prepared exclusively for accredited investors only as defined by local laws and regulations.

This communication does not constitute an offer to sell, a solicitation of an offer to buy or a recommendation of any security or any other product or service by SMB PE LLC. Prior to making any further decisions, investors should seek individual advice from their personal financial, tax, legal or other profession advisors to take into account the risks associated with their own specific situation. For informational and illustrative purposes only.

While SMB PE uses reasonable efforts to provide accurate and timely information, SMB PE LLC. makes no representations or warranties as to the accuracy, reliability or completeness of any information included in this document. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes.

By receiving this communication you agree with the intended purposes described above. Any examples used in this material are generic, hypothetical and for illustration purposes only. Certain information contained in these documents may be superseded as new guidance or interpretations are issued and any contents or financial projections included are subject to change without notice. All materials are meant to be reviewed, including any footnotes, disclaimers, restrictions or disclosure, and any copyright proprietary notices. Access to information about investments is limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments.

All investments are speculative in nature and involve substantial risk of loss including 100% loss of original principal amount invested. There is no guarantee that any forecast will come to fruition. Any investment decision should be based solely on the basis of offering documents including but not limited to the prospectus, private placement, or offering memorandum