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As our offering progresses, we would like to share the latest updates with you.
Q: How does this work?
A: The Investor purchases stock in AHP REIT Inc, an SEC approved and regulated security. The REIT purchases under- performing hotels. The REIT then pays the investor their profit through monthly distributions and gain when we sell in 2 to 3 years.
Q: May I use my IRA?
A: Yes. Many of our Investors do just that.
Q: How many hotels has the REIT invested in?
A: Eleven (11) and we hope to add more.
Q: How long has your business been in operation?
A: Phoenix American has been in business since 2009. Mr. Nelson, our Founder & CEO, has been in the hotel business for over 30 years. This is our seventh (7) offering.
Q: What am I investing in?
A: Globally branded business select hotels. The brands we prefer are Marriott, Hilton and Hyatt.
Q: How large is this offering?
A: This is a $50M REIT.
Q: Why is hospitality a good place to put my money? Aren’t hotels doing poorly right now?
A: The hospitality sector was de-valued during the two (2) years of COVID 19. The recovery has accelerated.
Q: Why are business select hotels a better investment than big resorts?
A: Resort hotels require much more labor to operate than business select hotels. As a result, the profit margins at a business select hotel are higher than resort hotels.
Q: What part of the country will the hotels be in? Have you identified any yet?
A: We don’t look at any particular part of the country because we treat each hotel as a separate operating business. You will not find us buying hotels in big cities such as NYC, Boston, San Francisco.
Q: When will I receive my distribution?
A: Distributions are paid monthly by electronic transfer.
Q: Your website says I will get an 11% distribution. Can I see the 12 month distribution history?
A: See chart below.
MONTHLY DISTRIBUTION HISTORY
*REITS are mandated to distribute 90% of their profits before year-end.
Monthly distributions are paid on on annualized basis. Monthly distribution payments may change due to hotel monthly performance.
The distribution percentage is calculated on total capital exclusive of bonus shares.
Q: How long will it be before I get my profit from the sale of the hotels?
A: We anticipate a 2 to 3 year hold in this investment.
Q: Can I invest in this offering in my trust account?
A: Yes, you can.
Q: How long will it be before I get my profit from the sale of the hotels?Q: What if there is an emergency and I need my money?
A: Simply send your request to Mr. Nelson via email: firstname.lastname@example.org
Q: Will I get a 1099 or a K-1 for this investment?
A: This offering will generate a 1099.
Q: Are there any tax savings to owning this investment?
A: We cannot give tax advice, you need to check with your accountant. There may be some sheltering of your income based on the REIT status of this offering.
Q: Can you please explain “growth”? What does that mean to me?
A: Real estate growth equates to appreciation of the underlying asset, which would be our hotels. Upon capital sale of the hotels upon completion of the offering, the hotels will be priced as an operating business in addition to real estate values at the time of sale. We are expecting growth through both the appreciation of the underlying asset value and the increases in operating income.
Q: What is your strategy when selecting hotels to purchase (location, luxury vs. budget, ect.)?
A: We focus on branded hotels—Marriotts, Hiltons, and Hyatts. We also look specifically at limited service or Focus Service hotels where we can increase value. These hotels operate on a leaner model than full service hotels and can offer customers the amenities needed during their stay, which adds value for the consumer. Some value-add opportunities for the investment would include lowering the amount of occupied rooms and increasing Average Daily Rate (ADR), which would increase Revenue per Available Room (RevPAR). While lowering our occupied rooms, we have the ability to control expenses, thus lowering the cost margin of the hotels. This increases profitability!
Q: Does control in running the hotels influence the sale prices in a couple of years? Why?
A: Yes, it does! For example, if you have a $1 million asset that is at an 8% cap rate, that same hotel operating at $2 million can be at a 16% cap rate. We focus on increasing our asset value by increasing topline performance and controlling the cost margins to increase assets position.
Q: Is buying hotels today still at Covid depressed pricing? If so, why?
A: Yes. Hotel Valuation is based on Trailing-12 NOI, so we’re still seeing COVID effects from 2021. This also depends on the type of hotel, we are seeing a quicker recovery in select-service assets. It will not stay like this forever, so now is the time to acquire, before the industry fully recovers. Once that recovery sets in across the board, valuation (and therefore prices) will increase back to pre-pandemic levels and higher. Remember, our model is “buy low, sell high”.
Q: Do you have a pipeline of hotels to purchase or as you get more funding do you need to find more opportunities that meet your criteria?
A: Yes, we have a robust pipeline of hotels we are considering for this portfolio. We find new acquisition opportunities EVERY DAY. We filter from a large selection of hotels on and offmarket. However, we stay true to our acquisition criteria; it has served as well over the years.
Q: Can I invest with a LLC and if so, what are the requirements?
A: Yes, EIN and formation documents.
Q: What is your actual % cash distribution in the past?
A: For the last 12 months, we paid over 11% annualized.
Q: This seems like a great niche, how do you decide this would be your focus, a financial
A: The profit margins are a lot higher in the business select sector than they are in the resort sector of hospitality. Less labor involved, just rooms and buffet breakfast to focus on.
Q: Why did you want to start your own company?
A: I didn’t enjoy working for a corporation anymore. I wanted to start my own company using the following 3 principles: buy only business select hotels, buy only under the Marriott, Hilton, and Hyatt brands, own and operate the hotels.
Q: I received a 11% dividend check last weekend. I was surprised and happy! Do you think I will continue to see higher returns?
A: As a REIT (Real Estate Investment Trust) we are required to distribute 90% of our profits. During our operational phase our investors will continue to participate in those profits. When we sell the properties, our investors will participate in the appreciation value as well.
Phoenix American Hospitality
14643 Dallas Pkwy, Suite 970
Dallas, Texas 75254
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