My favorite real estate asset class is Lodging. I’m sure that passion can be traced back to my grandfather, who, in the early 1960s, relocated to Myrtle Beach, SC to become a motel baron. His first investment was called T&C Court, and the 50-room motel was the first to include televisions for guests.
Later, my grandfather upgraded his real estate holdings to a property called Oceans Pines Motor Court. The post card advertises the Kings Highway holding as a luxurious getaway just “670 miles south of New York and 735 miles north of Miami”.
While my grandfather was known for his savvy real estate acumen, he was better acknowledged for his enterprising customer service skills. He managed to ride the wave – one of the pioneers in the hot Myrtle Beach market – and build a prosperous business that he eventually sold, being richly rewarded.
Unfortunately, I did not inherit the motels, but I did receive genetic traits – or that necessary trace of wisdom – that enabled me to become a more intelligent thinker. Accordingly, these lessons passed down over the years have equipped me to distinguish the ability to control risk, always preparing for the time in which risk meets adversity.
Becoming a Successful Hotel Landlord
As I said, I did not inherit my grandfather’s hotel collection, and his legacy is now a distant memory visualized on the two post cards I just showed you. However, I can appreciate the fact that owning hotels can lead to wealth creation, and by owing great real estate and delivering sound customer service, there are outsized rewards.
One of the reasons that I have delayed my in-depth analysis of FelCor (FCH) is because I knew that the company had a history of dividend cuts. In other words, there are some very good Lodging REITs that have formed since the Great Recession, and many of them are much better capitalized (with no legacy assets or dirty laundry). However, thanks in large part to Bret Jensen’s articles, I decided that it’s time to take examine the company more closely.
