While in my early 30’s, I entered into an agreement to purchase a motel in Atlanta. The property was owned by a Real Estate Investment Trust (REIT) and it was agreed that they would provide seller financing for 70% of the purchase price. That was a nice incentive for me to buy it, in addition to the fact that I believed I could ‘turn around’ the motel that, for the previous number of years had an occupancy rate of less than 20%. I knew that with my marketing skills and the fact I would implement a weekly/monthly rental plan that it would become very successful. I was excited about the opportunity and ready to tackle the challenge!
Once the purchase and sale agreement was inked, I started looking at finding the balance of funds I needed for the down payment. Indeed, I had less than a half of the down payment in my bank account and needed the rest to close the deal which was a mere 30 days away.
So, I immediately contacted the manager of the nearby branch of the largest bank in Georgia. He advised me to bring in my business plan along with my current financial statement and we’d talk about my loan request. With those things in hand, I headed over to see him. After looking things over he said that he needed to run it by his superiors and would be in touch within the next couple of days with an answer. Feeling very confident that this loan would be approved, I went to the airport and flew back to Gainesville, FL to be with my family.
A couple of days passed and the banker called and said that the Bank wasn’t sure about the potential success of my business plan. They were also concerned about my lack of motel business experience and could not approve my loan.
Needless to say, I was deflated. Here was a bank passing on a solid loan proposal and all I could think was that it was me they didn’t like. In that moment, they were squashing my dream.
But after a brief “pity party,” I re-grouped and collected my thoughts, my got myself up, dusted myself off and got back to work. I wasn’t going to let any “dream-squashers” defeat me!
I immediately started thinking of options for securing a loan for the down payment. Knowing the closing date clock was ticking, I decided to inquire at a locally owned bank near the motel I wanted to buy. Although local banks could have limited resources, they didn’t have as much red tape as the big banks andhopefully they could see the potential in a property right in their own neighborhood.
I called to make an appointment at the Bank of Decatur and was able to meet with the bank president later that same day. As I presented my business plan along with my financial statement to the Bank President, I was confident he understood my plan and that he could see my vision. During our conversation, I could see that he “got it” and I felt the dream come alive again!
The next day, the Bank’s Loan Committee met and approved the loan.
After operating the motel less than 6 months, the occupancy rate had climbed from 20% to 98%! And after 18 months of ownership, a buyer came along and offered over twice the amount I paid for it. My dream paid off! I sold the motel, paid off the bank, and made a very nice profit.
That day was a milestone in my development as an entrepreneur. It solidified for me that dreams can come true if you believe in yourself, persist with a burning desire to succeed and stay focused - despite the negativity of “dream-squashers.”
“A dream doesn't become reality through magic; it takes sweat, determinationand hard work.” - Colin Powell