The broker prices this motel at $75,000 a key. The bank sizes it at $52,700 a key. The $1.34M gap is the whole game.

Every hotel pro-forma you will be shown leads with a RevPAR and stops at a proud “owner cash flow.” A lender does neither. It discounts the RevPAR to the NOI the property actually nets — after a management fee and an FF&E reserve the seller never booked — caps that at a going-in rate, and hands you a brand-mandated PIP cheque at closing. This is an acquisition-underwriting model for a single independent or flagged hotel/motel (~40–120 keys) bought with an SBA 7(a)/504 loan — hospitality is the single largest SBA lending category.

What it does

RevPAR revenue engine — 60 keys x $95 ADR x 62% occupancy = a $58.90 RevPAR, ~$1.29M rooms + ~$0.11M other = $1.4M revenue.
USALI flow-through to NOI — departmental and undistributed costs (incl. the franchise fee) to a $532,000 GOP (38%), then the two deductions a seller’s P&L skips: an absentee management fee (~3.5% = $49k) and an FF&E reserve (~4% = $56k). A $437,000 “owner cash flow” becomes a $332,000 underwritten NOI.
Two prices, side by side — the broker’s per-key comp ($4,500,000) vs the bank’s income method ($3,163,555 = NOI / 10.5% cap), the overpay avoided ($1,336,445, 29.7%), and the DSCR at each price (0.93x at the broker price — declined).
The PIP nobody prices — the brand’s Property Improvement Plan at change of ownership ($6–10k/key = $360k+), real capex financed on day one, ~10% of the deal.
DSCR true vs naive — 1.28x on the NOI a lender accepts vs the 1.69x a seller’s sheet implies. A RevPAR down-case (-15%) drops coverage to 0.84x — NOI falls ~2.3x as fast as revenue.
SBA capital stack — equity + seller note (full-standby vs amortizing lever) + loan, with the injection rule, a real amortisation schedule, debt yield (12.7%), rooms coverage (4.98x) and a break-even ADR ($92.60).
3 segment profiles — Economy Highway (DSCR 1.31x), Midscale Select-Service (1.28x), Upper-Midscale Branded (1.13x): the premium segment trades at a lower cap, so you pay up and the coverage thins.

Excel model, 10 tabs, 5-year, every assumption editable and highlighted (Google-Sheets compatible — no macros); a PDF guide with sources; yield-on-cost (9.1%), cash-on-cash and a 5-year MOIC (1.58x, leverage-amplified; no live IRR by design). Numbers are industry-representative reference bands (STR/CoStar, HVS, CBRE, AHLA, AAHOA, BLS) — replace them with the target’s STR report and trailing-12 P&L. The first acquisition-underwriting model built around RevPAR, the FF&E reserve, the PIP and an SBA/DSCR gate — not the first hotel operating model. Educational planning tool — not financial, lending, legal or tax advice.

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