Midscale Hotel, Texas

At $5 million this is a midscale limited-service hotel in a major Texas metro, and the flag is doing more work in that price than most buyers notice.

• The flag is a limited-service brand, so you get real standards and a national reservation system without the cost structure of a full-service hotel.
• Rate is set by the segment and the market. Margin comes from cost discipline, not from pricing ambition.
• At this basis you are buying a working hotel rather than a turnaround. Diligence should be about confirming that, not hoping for it.

Three things I would check before writing an offer

• The demand mix across three years, not the last twelve months. A hotel at this size in this market almost never runs on one thing. Weekday corporate, project crews and weekend leisure all contribute, and the balance between them decides how the property behaves when the cycle turns. This market has been through enough cycles in both directions that nobody should be surprised by either. Ask what the mix looked like in each of the last three years. The shape of the recovery tells you more than the level does.
• The labor model. Limited-service hotels live on the gap between rate and labor, and breakfast, housekeeping standards and front desk coverage are all set by the brand. That means your largest controllable cost is only semi-controllable. Buyers coming up from economy properties routinely underestimate it. Buyers coming down from full service underestimate how little slack there is left to cut.
• The PIP. A change of ownership triggers a brand review: soft goods, case goods, bathrooms, lobby, sometimes the exterior. Get the scope in writing from the brand before you commit to a number, not after. On a $5 million basis a heavy PIP is the difference between a good deal and a stretched one.

Who it fits

• An operator with limited-service experience who can run brand standards properly and carry a soft weekend.
• Someone who already owns a leisure-weighted property. The demand curves run opposite each other, so the two balance nicely across a year.

Who it does not fit

• A first-time buyer. The brand standards, the labor model and the cyclical demand all assume somebody who has run one before.
• A buyer who has not priced the PIP before agreeing on a number.

Financing

• SBA 7(a) and 504 both fund owner-operated hotels. At this size most buyers end up in a 504 structure or a conventional loan with an SBA piece.
• The lender will want brand approval, the PIP estimate and the trailing financials.
• Under the rules effective October 1, 2026 the equity injection is 10 percent of total project cost, and on a special-purpose asset like a hotel a 504 lender can look for 15.

Not a commitment to lend. Subject to lender underwriting. Terms vary by borrower.

Next step

Room count, occupancy, ADR, the demand mix, trailing financials and franchise documents are released after a signed NDA is verified. Sign it and they come to you by email the same day.