From Chess Player To Chess Board Owner: Nathan Birch Bought A Motel

Binvested founder Nathan Birch recently acquired himself a single property with 36 income streams. Sound impossible? It probably is for a lot of people but his foundation portfolio of 200-plus properties allows him to make purchases that regular investors may not know exist. So, how did he do it?

Introducing Birch Hotel Group

The purchase was a 36 room motel (plus two-bedroom manager’s unit) in Cooktown, Qld. It was fully booked with tenants, in good shape, but still with plenty of scope for upside and importantly, sitting on an impressive 4000 sqm of land, or one acre.

It is actually just one of seven motels he has bought recently. You can’t get loans for these type of purchases, so he had to pay cash, which is where that large foundation portfolio came in handy.

Local market conditions

Cooktown currently has a severe shortage of accommodation. There’s another motel with about 50 rooms in it and that’s on sale for $4 million. It’s booked out, everything in town is booked out until about September this year. Not just because of the shortage of property available but since coronavirus came along, everyone now wants to drive up to the top of the country and see it. It’s a very nice part of the world, with lovely people and a nice community.

Income streams

Some of the rooms at the motel are renting for about $200 a night. Some of the cabins onsite are more permanent accommodation and are renting for about $350 a week.

It’s been a great way for Nathan to add multiple income streams with the one purchase. With the other six motels he’s bought, he’s added closer to 200 income streams all up. Like most of his purchases, he recognises its value in the cashflow it brings in, on top of the growth upside, and the fact it’s below market value. It’s about getting that cashflow and using it to go and buy more of the same.

Existing infrastructure

Looking around the 4000 sqm layout, the structure is amazing. There are sprawling gardens, a saltwater pool which has been well maintained, solar panels on roofs, community bathroom facilities, internal living areas and shared spaces, commercial kitchen, games room and more. The front of the building, more than 10 years ago cost around the same to build as what Nathan purchased the whole property for this year. And the bonus is that there’s significant unused land on the property that can be developed upon if need be.

Stacking up keys

Other people are accumulating cryptocurrencies, gold or stocks, but Nathan is doing what he calls stacking up keys. He may have added seven properties but it’s 200 keys to doors that he has stacked up. Each one with plenty of value attached. The cashflow from this is unbelievable. If you want to make purchases like this, you need a cashflow game plan. Reach out to Binvested to get started.