Proximity Capital is a private equity firm that is focused on the safe store of investor capital, reduction of income tax liability, and the creation of wealth through real estate and businesses acquisitions in hospitality. Proximity Capital is a private equity firm that is focused on the safe store of investor capital, reduction of income tax liability, and the creation of wealth through real estate and businesses acquisitions. We founded the Brand Boardwalk Suites and use the brand on all new acquisitions. The brand focuses on customer acquisition strategies that boost revenue, increase the life time value of our customers, and optimize cash flow at every hotel. Target Market
We are laser focused on the Southern Louisiana hospitality market which we believe has the highest amount of potential return on effort over any other state in the U.S. We completed extensive research on all 50 states and Louisiana had the lowest cost per unit in relation to the RevPAR out of any state. We also looked for acquisitions in areas with a household income over $50,000 annually and a nearby population over 50,000 which brought our attention to Baton Rouge and Lafayette. Acquisitions
In November of 2023, we closed escrow on 109 units in Baton Rouge and we have 2 more closings in Lafayette during the month of December. Our total unit count will exceed 320 units in Louisiana by the end of Q4 2023. We also have 3 properties with 335 units closing during the first quarter of 2024 including a 160 unit hotel conversion to apartments in Jackson, MS. Short Term Goals
Our three year goal is to raise $20M in in preferred equity, acquire and renovate $100M in real estate, and create $200M in wealth for our team and our partners. We plan to return 100% of investor capital within 3 years and our long term strategy is to hold on to the cash flowing assets for 10 years or until we get bought out by a larger company. Brand Development
We launched our hospitality brand, Boardwalk Suites in 2023. This brand will be the face of all of our hotel acquisitions. Our brand is committed to providing clean rooms in safe locations....and of course, making sure that everything we offer works. Employee Engagement
We are streamlining the hotel operations with a focus on maximizing asset performance without the need for micro-management. Our hotel managers and staff are engaged in the business through our proprietary bonus structure that rewards the entire team every month for staying within budget on payroll and maintaining a 4+ star review rating. We allocate 15% of the gross revenue towards the payroll and anything that is left over will be distributed to the employees each month on their paycheck. Focus On Acquisition Costs and Lifetime Value Of Customers
Great customer experiences drive the cost to acquire customers down and increase the lifetime value of customers when they extended their stay. Some guests stay for a few days, some stay for a few weeks, and others stay for months and years. In this business, keeping customers is more important than finding new ones. Our target average length of stay is 30 days and we provide many amenities that make our guests feel like they are at home. Our beds are extremely comfortable, every room has a 58" Smart TV, and we install superfast Gig-E Wifi at every location. Limited Service Operations - Maximizing Value for Guests
All of our hotels have implemented a limited service model that best suits the needs of our extended stay hotel guests. This model improves cash flow by as much as 20% over a traditional economy hotel and it gives us the ability to offer great service while staying competitive with our rates. Our hotels operate from 9AM to 6PM daily and we clean the rooms once a week for the guests. Digital Optimization
In an effort to further optimize the hotels, we have eliminated cash as a form of payment. We only accept various forms of digital payments, credit cards, and checks from businesses. Recent Industry white papers stated the cost to handle cash accepted by hotel staff costs the owner more than 12% (3 X Credit Cards) of the collected revenue. The specific costs incurred by owners included bookkeeping, audits, transport, theft, and embezzlement. We may lose a few customers looking to pay cash, but we save a lot of money on labor, and we eliminate theft and embezzlement. We can spend the money we save handling the cash to attract more customers with acceptable forms of payment. With all things considered, we believe the net result is a 6% increase to the cash flow. Security Policies That Work - No Traffic
The safety of the guests is our highest priority and we are committed to maintaining a safe and quiet property that all guests can enjoy. Our security staff has access to 32 cameras on each property and they monitor unit traffic on a daily basis. Our policy of "No Traffic" helps us identify guests that are not a good fit for the property and remove them from the property the next day during check outs. Our security staff reviews the cameras with the manager on a daily basis and they work together to keep the properties safe and secure for our guests. Eliminating Convenience Fees For Profit
The two highest paid vendors in the hospitality business are the franchises and the online travel agencies. Essentially, hotel owners pay them a fee that can range from 10-20% in exchange for help with booking guests or setting up the hotel. The combined expenses of the two can often exceed 30% of the hotels revenue. When we acquire new properties, we have the owners terminate the franchise agreements which saves us 12% on average. We also launch our own website focused on direct bookings and we reach out to business customers that need housing for their workforce. We also close up a few industry loop holes including bidding on Google for our hotel name and our address. Unfortunately, if you don't reserve those key words, Expedia and Booking.com will, and it can cost you 18% on each booking. Summary
That's our business and that is what we do. If you would like to learn more about hotel investing, take a look at our HotelInvestorClub.com and download our free Hotel Investing Guide For 2024.
