A 19-key mountain inn where the T-12 looked clean until the FF&E reserve showed up on page four

@tomasz_wro

The line that got me was "the deck called it industry standard." I have used that phrase myself in a pitch once, years ago, and I knew when I typed it that it was doing work I did not want to do honestly.

The part nobody mentions until they are sitting across from a capital call notice is that 19-key properties almost never have a proper PIP schedule in writing, because the operator runs it like a family business and keeps the maintenance history in his head or in a spiral notebook from 2016. So when you ask for the age-weighted replacement schedule, you get a shrug dressed up as a confident answer. I would want to see actual invoices for the last HVAC service on each unit, not a date the operator recalls, because on a property that age the difference between "serviced" and "replaced" is the difference between a tune-up receipt and a compressor that has been limping since Merkel was chancellor. The 1987 build date on its own would have made me ask for the full mechanical inspection before I read anything else in the deck. Did the LP have an independent inspector on the property before she wired, or did she rely on what the GP disclosed?

The number doing the most work in this deal is the $654k gross revenue figure, because every percentage-point difference in FF&E reserve runs directly through it. The GP chose 3 percent, named it standard, and the framing did the rest. Nobody stress-tested whether "standard" applied to a 1987 building with deferred mechanical work, which is where the analysis should have started.

The proforma gap you named, $22,400 modeled versus $18,800 actual reserve contribution, is almost beside the point. The real issue is that even the higher number was wrong for the asset. A competent pre-close diligence process on a mountain inn that age would include a property condition assessment with system-level remaining useful life estimates. The PCA would have flagged the HVAC across those six units and given you a replacement cost and a timeline. Divided by years of remaining useful life, you get a funded reserve target for that line item alone. Add the roof, the water heaters, the elevators if any, and the plumbing stack, and you build a reserve contribution from the bottom up rather than from a percentage backward.

The risk you did not name directly: the capital call in month fourteen was not just a cash event for the LP. On a 19-key property with two peak-season units offline, the revenue loss during that August weekend likely exceeded the compressor cost. Hotels reprice every night, and a mountain inn at 68 percent annual occupancy is probably running 85 to 90 percent in peak weeks. Losing two units in that window costs RevPAR directly, not just on the capital account.

One question before I engage further: did the LP have the PCA report at all before the wire, or was the T-12 and the operating agreement the extent of the diligence package the GP provided?

What year was the plumbing last touched, because on a 1987 mountain property that question matters as much as the HVAC.