Does anyone know how to evaluate a Motel? I mean in generally. ex: total income in a year X 4 or 5=? thanks?

Question

My friend's family would like to have a motel business in CA, fresno. however, when he told me the price which from motel owner i feel kind of expensive. For me, i don't know anything about business, but i hear from my uncle's friend, who a motel business said that the value for a motel is total income per year times 4 or 5. Therefore, i would like to know it is right ?? thank you for your help ^_^

Answer 1

Obviously you have to consider expenses for running the business as well as income. Go to a reputable business broker, bank or attorney to learn more about the value of a business. Why would you invest a large sum of money in something you know nothing about? You would also be wise to visit a CPA who can explain depreciation and other important aspects of business ownership.