Clarion Hometown Inn 1001 Central Ave W

Upside Potential of Clarion, Iowa ----Hometown Inn
For a new owner this motel investment should be considered a “turn around” situation. The motel has in recent years earned most of the income from Apartment Sales. This includes Local residents who rent by the month and less than 2 per day who are motel guests. We feel the new owner should consider two different tracks to enhance revenue.
Track 1: Motel and Apartments Just by adding 1 more room sale per day, the cash flow would increase by $30,000 per year and 2 room sales per day $60,000. The new owner should have a website and utilize software that connects online searches to the motel’s reservation system. The current owners have had the high end software to do this but never used it correctly, like posting available inventory so guests could see online what was available in order to make a reservation online. As of this date, on the 2nd of this month when doing a search for a room to rent on Expedia, Expedia shows the following.
No Rooms Available to rent on the 2, 3, 6, 8, 9, 11, 12. This is NOT TRUE! All of the days have rooms available to rent. The problem is the Management does not keep current the available inventory online. Also, the Expedia Rating for this motel is 7.4 versus the other motel in town where the rating is 9.2, which is newer and built 2015 with 33 rooms.
So anyone looking to book a room online for the next few days and most of next week would NOT be able to rent because the available inventory was not updated.
Track 2: Apartment Building Only This option would be to just make the motel an apartment building and cut off all services that were intended for motel guests. Right now, the apartment folks enjoy, a) free cable TV, b) free internet, c) once a week cleaning, d) small breakfast, e) free use of bedding and towels, d) laundry service for bedding, and towels.
This motel has had extensive work with new siding and roof but more importantly 16 Rooms converted to small Apartments. As Apartments, they have a kitchen area with large Refrigerator, Microwave, Double Sink, garbage disposal, and Cupboards. Also, the efficiency area in the apartment is a living room, with a recliner chair, and a T.V. on top of the dresser drawers.
Most of the room revenue of this motel is now a predictable cash flow with the majority of the income from apartment income. Apartment Income is 83 % of the annual income and Motel income is 17 % of the income.
This is a turn- around investment as the net income does not justify the value of the motel. However, the Gross income of 3 times the revenue does justify the asking price. The current (August 2024) MAI value of the motel is $475,000. The real estate tax value of the motel is $447,600. The two doctors who own the motel have owned it for more than ten years. Both of them are pre-retirement and approaching their 70s. They would be willing to assist with the down payment and their current bank would be willing to provide financing.
Roy Ware, an Iowa Real Estate Broker: 4royware@ gmail.com
651 964-0671 -Cell phone