On today's episode, Jake breaks down how DoveHill Capital Management underwrites Hospitality Deals. He details how they evaluate both the qualitative & quantitative factors of a potential asset, including price, historical performance, revenue trends, and expenses. He also explains how they model deals, identify Capex issues, how they structure deals, and their investment committee process. Finally, he wraps up with mistakes they've made in the past and how you can avoid them. Enjoy!
Links:
Smith Travel Research
FRED (Federal Reserve Economic Data)
CoStar
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Topics:
(00:01:02) - Introducing our first solo show!
(00:02:19) - Defining Underwriting
(00:03:32) - What happens when a deal comes into DoveHill: Evaluating the qualitative factors of a potential asset
(00:11:11) - Quantitative Factors: Price, historical performance, revenue trends, and expenses
(00:20:17) - Modeling: Back of Napkin method
(00:23:02) - Implementing the in-house management team & identifying Capex issues
(00:30:14) - Underwriting the Capital Structure
(00:32:57) - The Exit Scenario & Stating Risks
(00:35:40) - Easy mistakes to make
(00:40:29) - The investment committee process
(00:42:53) - The importance of timing
(00:44:35) - Closing thoughts & Call to action
