January 2023 Q&A Session with CEO Perch Nelson

ORIGINALLY BROADCAST ON 01/25/2023
Watch Replay

Q&A from the Webinar:

Q. How can I track my investment?

A. You will be able to track your investment on our transfer agent, KoreConX.

Q. If you did 12% last year, is there any outlook for 2023?

A. We expect to continue to pay double digit distributions for the next 3 years. We anticipate the annual returns to go above 12% as we continue to purchase more hotels and add them to the REIT.

Q. We are so focused on the monthly distributions, how about the growth aspect — are we on track to make money when you sell the hotels?

A. Yes, we believe that we only need 2-3 more years until the hotels are at the correct market value to sell. Once we do sell, investors can expect to return 25-30%.

Q. If I invest today, are there still opportunities at COVID-reduced prices when buying a hotel?

A. Yes, we currently have 11 properties that were purchased during COVID-reduced prices. Your investment will be diversified across these 11 properties, as well as the 4-5 more we plan to purchase this year.

Q. How does rate growth affect your bottom line?

A. For the hotels we plan to purchase this year, we are able to take over the existing loan from the previous franchisee rather than refinancing at higher interest rates.

Q. How do you see impact of looming recession?

A. We do not believe that a mild recession will impact the industry in the way that COVID previously did to the hospitality industry. Business select hotels draw heavily from business travelers and they will continue to need places to stay.

Q. How will 2023 industry performance compare to 2018/2019?

A. The business select sector has rebounded faster than any other part of the industry. In 2022 we reported 5% higher revenues than 2019 before the pandemic.

Q. Will Phoenix invest in other brands like Sheraton in the near future, or will they only focus on 3 top brands (Hilton, Hyatt, and Marriot)?

A. We are franchisees of Hilton, Hyatt, and Marriot and only purchase these brands.

Q. I already have a SDIRA with checkbook. If I do not need a custodian, how do I invest?

A. You can invest on our website and choose Self-Directed IRA as the funding method. You can then mail us a check to: 

Phoenix American Hospitality 

Wellington Centre 

14643 Dallas Parkway, Ste 970 

Dallas, Tx 75254

Q. Can we use a 401K to invest in your venture?

A. Yes, but you will need to rollover 401K funds into a Self-Directed IRA first, then invest through the Self-Directed IRA.

Q. As an investor, would we receive K-1 or some other form of tax form to report on our taxes?

A. You would receive a 1099 DIV form.

Q. Is it possible to automatically reinvest quarterly distributions back into the fund?

A. No, you have to manually reinvest funds after they are sent to your bank account.

Q. Is your distribution based on 90/10 or 80/20 profit?

A. 90/10 profit.

Q. Does Phoenix have interest in the extended stay segment?

A. We have a Residence Inn and Homewood Suites that performed very well during COVID. There is interest to buy more.

Q. I’m Indian and living in Saudi Arabia. How do I invest and take part in this investment?

A. The investment is open to international investors. You will need a valid passport to complete our Identity Verification and Anti-Money Laundering process when you fill out the online application.

Q. Phoenix purchases Hiltons and Marriotts. What is the percentage of developer-owned, compared to third party, for these two developers?

A. We own 100% of the properties.

Q. Are you required to commit to invest for a particular amount of time?

A. Yes, you are expected to hold your capital in the investment for 3 years.

Q. How liquid is this investment?

A. It is an illiquid investment.