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How to Structure Hotel Deals With Downside Protection

By Vinney Chopra

June 4, 2025


hotel deal downside safeguards

When an accredited investor puts capital into a real estate syndication, one question rises above all:

“How is my money protected if things don’t go as planned?”

At Moneil Investment Group, that’s the question we answer before we ever take a dime.

Because we don’t just structure hotel deals for upside—we structure them for downside protection first.

Here’s how.


1. Preferred Returns = You Get Paid First

Before the sponsor takes a share of profits, you—the investor—are first in line.

We typically offer a 6%–8% preferred return. This means:

  • If the property earns 8%, you get 8%.
  • If it earns 10%, you get 8%, and we split the extra 2%.
  • If it earns 5%, you get the full 5% and we get nothing.

That’s a clear alignment of interests—and one reason so many investors trust us repeatedly.


 2. Equity Cushion = Built-In Protection Layer

In our hotel deals, we often contribute our own capital as co-investors. That creates an equity buffer that absorbs shocks before your capital is affected.

Example:

If we raise $10M and we co-invest $2M, then if the property declines by 15%, your capital is still protected by our buffer.

This “skin in the game” matters more than a slick pitch.


3. Conservative Underwriting = Reality-Based Numbers

Here’s what we DON’T do:

  • Inflate occupancy
  • Guess at future room rates
  • Assume perfect construction timelines

Instead, we:

  • Use actual trailing-12 data from the hotel
  • Forecast renovation disruptions and ramp-up periods
  • Build in reserves and vacancy buffers

This means your investment isn’t riding on optimism—it’s riding on well-tested numbers.


4. Renovations That Create Forced Appreciation

Unlike stocks, real estate can be improved for higher value.

Our hotel deals often include a $2–$4M renovation budget to:

  • Modernize rooms
  • Enhance lobby and event spaces
  • Improve signage and landscaping
  • Elevate the brand perception (and therefore the ADR)

Once improvements are completed, we reposition the property to charge more and refinance—often returning a chunk of investor capital early.


5. Exit Flexibility = Multiple Profit Paths

We always build 3 exit options:

  1. Hold and cash flow
  2. Refinance and return capital
  3. Sell at peak value for equity upside

We don’t lock you into one rigid outcome. We stay agile—so your capital is protected and optimized.


Final Thoughts: The Best Structures Balance Risk and Reward

Great hotel deals don’t just “make money.”

They’re engineered for stability, aligned incentives, and tax-advantaged growth.

As a passive investor, your job isn’t to operate the asset.

Your job is to partner with a sponsor who understands structure—and puts you first.


Want to Review Our Latest Investor-Friendly Hotel Deal?

Join Vinney (Smile) Chopra, CEO of Moneil Investment Group, for a personal 20-minute strategy call.

We’ll show you:

  • The capital stack for our current value-add hotel fund
  • How we prioritize LP capital in every structure
  • How you can start earning passive income—and shielding taxes

BOOK A CALL

A 20-minute quick call with Vinney Chopra

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