Lessons Learned

35 Years as a Hotel Owner & Broker

At various times, as I've worked my way along the longevity scale, I've asked myself what I've learned. After all, if we can't or won't learn from our mistakes and experiences, we will never grow and succeed....

Lesson One, and probably the most humbling, is that we never stop learning. I've read that life's learning, in addition to education, is experiencing a constant series of mistakes. Learning that too much debt can become a heavy, sometimes disabilitating, anchor in an angry sea was one of the harshest lessons I ever had to learn. Realizing, finally, that women really are from another planet, and that I will never fully comprehend or understand them, was also a tough one. Becoming aware that the more we mature, the less we really know... that we must wake up each morning eager and ready to learn, is the basic premise of Lesson One.

Lesson Two involves partnerships. Whether we are discussing marriage, friendships or business partners, we are talking about mixing several things together and expecting them to work great. Each of us is unique, of that I'm certain. We have different IQs, culture, instincts, perceptions, needs, beliefs, and so on and so forth. Even our basic levels of talent, intuition and common sense are moderately to extremely varied. So when we form a business partnership, usually for shared investment and operational reasons, we should never anticipate that others are going to think and act like ourselves. Certainly we have shared goals and objectives, but our willingness and capabilities to input the amount of actual work time and money to achieve those results will usually be quite different. Lesson Two is simply to rely on yourself most of the time. Don't blame poor results and failure on somebody or something else.

Lesson Three is common sense. We start as babes from the womb with none. Over time, via learning, experience, relationships, success and failure, we gather a common sense base. This can be anything from an early warning system to an instinctive perception of what has happened, is now happening and the most probable result. In later life we will refer to this phenomena as good business sense, maturity and self assurance. If, along the way, we experience an addiction, severe injury, poor health, some type of physical or mental abuse, etc., our common sense level will obviously be adversely affected. The fact is, the greater our common sense base, the higher level of happiness and success we will experience. So Lesson Three is to build, as much as possible, our common sense base and rely on it. Conversely, we need to avoid, as much as possible, relationships and partnerships with those who have little or none.

Lesson Four encompasses money, greed, ego and pride. Each of these subagents of our character, (they are always there in some

measure) can help or hurt us. When I first started making what I judged to be BIG money, I allowed it to change me. Suddenly, although this really didn't happen overnight, I wanted more. I became very proud of myself, i.e. how I dressed, the car I drove, how other people might perceive me, who I was... Many of you have been there done that. Many of you will be there and be doing that. We buy things, steam roll over obstacles, drink and celebrate more, form relationships with those who most stroke our egos, in our quest to become larger than life.... Worst of all, we begin to believe that we are better than others, all knowing, the soldier on the beautiful white horse leading the charge without fear. Big mistake, for two reasons. What goes up must come down. Up there in the stratosphere it is very lonely... not really fun or satisfying in the long term.

Lesson Four is to always remain centered, loving, caring, family and friendship orientated. Keep those subagents always under close guard. Use them toward realizing your goals and ambitions. Don't let them use and control you.

2005 - 2007 Sold Montana Lodging Properties

"PLEASE LET ME KNOW WHEN YOU ARE CONSIDERING SELLING"

Western Montana Hotels Represent Excellent Values

Gross multipliers, per room costs and capitalization rates, more or less, directly reflect SUPPLY (hotels for sale at any given time) and DEMAND (active/qualified buyers interested in a specific geographical area ). As is pretty much true with real estate values and equity appreciation through recent history, the lower the supply and higher the demand, the quicker and higher values/prices will escalate. I've watched, and probably played a small part in, gross income multipliers climbing from three to four, back ten to fifteen years ago, to five and higher through the past eight years in southern California….. Meanwhile gross multipliers in most of the Western States have risen into the 4 to 4.5 range. Unfortunately, these higher income multipliers result in higher risk with proportionately lower returns.

In 2002 I obtained my broker's license in Montana, moved here (although I still office and broker hotels in Santa Barbara, California, serving the Central Coast area), sold seven hotels and purchased two in Western (Missoula & Helena) Montana, through 2006. These lodging properties have all sold between 2.5 and 3.2 times gross rental income. On July 3rd I listed a motel in Whitefish at three times gross. It was sold and escrow closed as of August 15, 2007. 2008 will be my THIRTY-FIFTH year of hotel brokerage and investment, encompassing Minnesota, Wisconsin, California and now Montana.

Western Montana's three times gross (average) multipliers will not last, of that I'm certain. This pristine geographical and very healthy economic area is just now being discovered. Hotels are being developed here. During 2006 and 2007, Hilton Garden Court hotels opened in Bozeman and Missoula, a Marriott Courtyard and LaQuinta (complete renovation of an existing Microtel property) opened in Missoula and more major hotels will open along Freeway I-90 in Western Montana in 2008...

Big Mountain ski and recreation area at Whitefish has undergone a $150,000,000 (2004 through 2007) overhaul and expansion. Big Sky, between Bozeman and Yellowstone National Park, is developing exclusive private golf courses, condominiums, homes, along with 15,000 to 20,000 sq. ft. estates for the rich and famous. Even Bigfork, a three-block long town at the north end of Flathead Lake, north of Missoula and southeast of Kalispell and Whitefish, has an exclusive new golf course, yacht club, and hundreds of new homes/condominiums being developed and sold from $300,000 to $1,500,000…. Flathead Lake's (the largest natural freshwater lake west of the Mississippi) lakeshore frontage has tripled in price over the past ten years !

Western Montana includes both Glacier and Yellowstone National Parks, realizing three to four million visitors each year. The winter ski and recreation areas here are unsurpassed, with lift, accommodation and daily cost rates twenty to forty percent below other popular U.S. winter ski and snowmobile areas. Although you often need to go through one major city en route, getting in and out of western Montana is always available and convenient, with major airlines serving international airports in Kalispell, Missoula, Helena and Bozeman.

Bozeman's State University, the University of Montana at Missoula, Carroll College at Helena, and an extensive State community college system, represent the highest standards in education and national championship athletic programs. For States in which at least 50% of the 2006 graduating seniors participated, Montana students ranked number four nationally in the ACT average composite test scores !

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