Bruce and Emily Haupt run The Landgrove, a 16-room inn with a full-service restaurant and a 1,500-square-foot art barn, in a Vermont town of 180 people. They paid $1.8 million for it, and the down payment did not come out of savings. It came out of Emily's 401(k), rolled into the business through a provision in the tax code called ROBS, Rollover for Business Startups, which let them put $450,000 of retirement money to work without paying an early withdrawal penalty. The catch is that she had to quit a 16-year career at Shell before the money could move at all.

In this episode, Michael Russell walks through the capital stack piece by piece, all four layers of it: bank financing, development authority financing, the ROBS rollover, and a seller note. They get into what ROBS actually costs to set up and maintain, why it forces you into a C corporation, and why most of their business is owned by the 401(k) rather than by the two of them. They also cover what the spreadsheet missed, including a renovation Bruce says ran about four times what they planned for, and a staffing constraint that has both the Haupts and Michael housing their own employees.

If you have retirement money sitting in the market and a hospitality deal you cannot work out how to fund, this one is worth your time.

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Adam Walz and Micah Thomas are the co-founders of Comeback Hospitality, and they are roughly 30 days from opening The Wesley, a 1960s roadside motel in Page, Arizona they are converting into a 50-room boutique hotel. To buy it, they called 62 banks and got 61 no's. The 62nd said yes. As Micah puts it, financing a negative cash-flowing, unflagged hotel in a tertiary market is not something most lenders want anything to do with.

In this episode, Michael Russell walks them through how the deal actually came together. A property listed at $6 million stepped down to $3.3 million all cash, putting them in at roughly $67,000 a key against a market average Micah puts at $115,000. The capital stack: $4.7 million financed against about $6.7 million all in, $1.65 million raised from investors, $250,000 of their own money, roughly 80% loan-to-cost, and why they took the SBA 7(a) over the cheaper 504. They also get into what went sideways, including a $10,000 WiFi upgrade that became $50,000 before another $30,000 on top, and the largest investor walking away at the eleventh hour of a 90-day raise.

Micah also talks openly about living in room seven for the better half of six months while construction happened around him, and gives a straight answer on whether he would do it again. If you are underwriting your first commercial hospitality deal and you want to hear what the spreadsheet does not tell you, from two people who are still in the middle of it, this is that conversation.

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Dustin Baker runs Hidden Gem Media, a performance marketing agency built to pull hospitality brands off the OTAs and onto direct bookings. By his account, one client resort went from roughly thirty thousand dollars a month in direct bookings to somewhere between two and three hundred thousand. His explanation for that jump has almost nothing to do with follower count.

In this episode, Michael Russell and Dustin work through the difference between search traffic and discovery traffic, and why a business built on OTA and Google demand runs into a hard ceiling it cannot spend its way past. Dustin lays out the economics: what an effective commission actually includes once you add agency fees, ad spend, and any offer layered on top, and how that number compares to the 15 to 20 percent an OTA takes. He gives real thresholds: roughly five thousand a month in ad budget against fifty thousand in monthly room revenue, and ten thousand against a hundred thousand, and he is direct about the properties this does not work for. Michael's own hostel is one of them, and Dustin explains on air why he turned that business down. They also get into why calendar availability, not audience size, is what eventually drives ad costs up, why Dustin would hand an influencer's budget to Meta ten times out of ten, and why he would steer most owners away from crowdfunding a resort through pre-sold stay packages.

If you are running an experiential property and you have been meaning to get serious about direct bookings, this one gives you numbers to work from.

If you found value in this episode, take 30 seconds to leave us a review. Tap into the show, scroll down to Ratings & Reviews, and drop a quick review. It helps more people find the podcast and keeps us bringing on great guests.

Connect with Michael on Instagram or LinkedIn.

Email Us at info@hotelinvestorplaybook.com

Visit the Hotel Investor Playbook Instagram

Invest with Malama Capital

Submit a deal