Obamanomics even hurts the Patels and their hotels

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    Obamanomics even hurts the Patels and their hotels






    BATTLE GROUND, Wash.—Alkesh Patel, a 44-year-old immigrant from India, borrowed about $5 million to open the Best Western Plus motel on Main Street in this city of 17,500 north of Portland, Ore.

    Five years later, Mr. Patel still works the front desk with his wife, chats with the housekeeping staff and helps do laundry while making the morning rounds, much as family members have done at other motels nearby for two decades.
    The Patels' Hotels

    View Slideshow



    Darryl James for The Wall Street Shirish Patel helps Maribel Mendoza at the Hampton Inn he owns in Clackamas, Ore. He said he is in danger of losing two of his six hotels.





    But Mr. Patel doesn't own the Best Western anymore. The bank that lent him the money failed in 2008, and his loan was sold to one of the many investment firms specializing in buying distressed assets from the Federal Deposit Insurance Corp. in the wake of the financial crisis. The new owners of the loan demanded $3 million in repayment. Mr. Patel didn't have it, so the owners foreclosed.

    "We just needed six months or so to tide us over," said Mr. Patel.
    Mr. Patel's comedown from property owner to hired help is part of a commercial real-estate slowdown that has swept through the roadside lodging business in the U.S. Many commercial real-estate properties declined in value during the financial crisis. But after a postcrisis rebound, concerns about the U.S. economy have cooled the market recently in many areas of the country.

    About half of the nation's 50,000 motels are owned or controlled by immigrants who trace their origin to the state of Gujarat in western India, many with the last name Patel.

    But hundreds of those hotel and motel owners now are fighting foreclosure, while others have lost their properties to lenders, said Hemant Patel, chairman of the Asian American Hotel Owners Association. The Atlanta trade group represents nearly 10,000 immigrants of Gujarati descent in the U.S. with lodging properties valued at an estimated $130 billion.

    The group's president, Fred Schwartz, estimates some 10% of its membership may be in default on loans or in the process of loan restructurings. More than 200 motels in California run by the trade group's members are in default or foreclosure and more than 1,000 other properties across the U.S. might be in similar trouble, he said.

    The problem isn't just overbuilding and an epidemic of empty rooms. Some borrowers missed loan payments, while others fell afoul of loan terms when business at their motels took a nose dive during the financial crisis.

    Some lodging owners said they were snarled by lenders eager to purge their portfolios of commercial real-estate loans. And two small banks that specialized in loans to lodging owners with Gujarati ancestry failed, eliminating a financing source.

    "We never missed a payment," said Bhaskar Zaver, an immigrant from Zambia of Gujarati ancestry who borrowed $2.7 million from BB&T Corp. to buy a Microtel Inn in Lawrenceville, Ga. The loan was due to be refinanced last year when BB&T, of Winston-Salem, N.C., sent a foreclosure notice, demanding that he pay off the loan, he said.

    Revenue at the motel shrank to $400,000 last year from a peak of $1 million before the financial crisis, and its value has declined, but Mr. Zaver said he tapped his savings to avoid falling behind on the mortgage. He was about to refinance with a different bank when BB&T sold the loan for $800,000. The loan's buyer foreclosed on the property, and the Microtel has been empty since March. He said he has lost about $750,000.

    "BB&T explores every possible solution and alternative to help clients resolve loans that are in default," said David White, a BB&T spokesman. He wouldn't comment on Mr. Zaver's loan, citing privacy rules.

    For decades, people with the surname of Patel have been among America's most successful immigrant stories. After arriving in the U.S. in the 1970s from countries such as Uganda, Kenya and Zambia, and from India in subsequent years, these immigrants grabbed an opportunity from the U.S. government to get green cards in return for putting up as little as $40,000 to run a business that would generate jobs in depressed communities.

    These immigrants, often college-educated Hindus, liked the motel industry partly because they could employ family members. Restaurants weren't popular choices for these businessmen because they were uncomfortable handling meat due to their Hindu beliefs.

    Over time, Patels became entrepreneurs in small cities and towns across America. Families often own or operate several properties, leaning on economies of scale to squeeze profits from the low-margin motel business. But the current turmoil threatens to undo all that hard work, some motel owners said.

    Banks are calling in some loans and are leery of financing construction of new motels because of economic uncertainty and concerns about the health of the commercial real-estate market.

    Shirish Patel, an obstetrician and gynecologist in Clackamas, Ore., is in danger of losing two of the six motels he co-owns because the bank, Columbia State Bank of Tacoma, Wash., wants "me to buy the loan out for $1.5 million," he said. "None of the banks are willing to loan to the hospitality industry."

    Dr. Patel, 52, said he "cannot afford to file for bankruptcy," adding that he already has sunk nearly $3 million into his motel properties. Columbia State Bank spokeswoman JoAnne Coy wouldn't comment on the lender's actions, though she said bank officials "recognize a lot of businesses are being challenged in today's economy."

    Vijay Patel, a naturalized U.S. citizen born in Uganda, forfeited more than $150,000 in licensing fees on four properties after failing to find a bank willing to lend him money to build the motels.

    Mr. Patel, 55, said he never missed a loan payment since getting into the business in 1994, and his motels in Oregon and Washington are profitable and employ 120 workers. "Everyone says these towns need jobs," he said. "I can provide lots of jobs."




    At least Obama can guarantee $500 million in loans to something speculative and unproven in the long term like solar energy panels.

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    If Obama took office in '09 and the financial crisis started in '08 when these hotel owners started having problems how, exactly, does Obama fit into this? If you have a reasonable answer I'll agree with you on it.

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    Quote Originally Posted by Zaphod View Post
    If Obama took office in '09 and the financial crisis started in '08 when these hotel owners started having problems how, exactly, does Obama fit into this? If you have a reasonable answer I'll agree with you on it.

    Read the article.

    Some lodging owners said they were snarled by lenders eager to purge their portfolios of commercial real-estate loans. And two small banks that specialized in loans to lodging owners with Gujarati ancestry failed, eliminating a financing source.
    "We never missed a payment," said Bhaskar Zaver, an immigrant from Zambia of Gujarati ancestry who borrowed $2.7 million from BB&T Corp. to buy a Microtel Inn in Lawrenceville, Ga. The loan was due to be refinanced last year when BB&T, of Winston-Salem, N.C., sent a foreclosure notice, demanding that he pay off the loan, he said.
    Revenue at the motel shrank to $400,000 last year from a peak of $1 million before the financial crisis, and its value has declined, but Mr. Zaver said he tapped his savings to avoid falling behind on the mortgage. He was about to refinance with a different bank when BB&T sold the loan for $800,000. The loan's buyer foreclosed on the property, and the Microtel has been empty since March. He said he has lost about $750,000.
    Its not the just fact business is slow because of some bullshit that happened last decade, it's because these hotel owners today are either having the rug pulled out from under them because their mortgage got sold and the new investor said pay up, or they can't get re-financing because values are down (current LTV issues) and the sorry fucking bailed out banks don't like the hospitality (or any other) industry at the moment. As much as I can't stand a smelly Indian, the article states how heavily invested these Indians are into their properties (in other words not 5% down) and they still can't get a re-fi on their mortgage.

    How is it Obama and Co. can guarantee and lose a $500 mil loan on a speculative solar industry, bail out the UAW who have nothing but a 40hr work week invested in their companies and socialize the top 10 bank's losses while capitalizing their profits, yet Obama et al can't come up with a plan to let small business after small business re-fi their property?

    While this article is only focusing on hotels, there is about to be a major epidemic of small businesses going under due to being unable to re-fi their commercial properties for many reasons out of their control.

    Now why would small businesses need to re-fi? Because commercial mortgages are 5-10 year products typically with balloon payments. There's no such thing as a 15 or 30yr mortgage product for small business, so the small businesses that have survived this initial recession/crisis are soon coming due for their re-fi's and there isn't a god damn thing Obama and have cronies have lined up to help them.

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    You are absolutely right. They have nothing planned to help out the small business owner. Why? Because it isn't in the financial interest of anyone in the government.

    Here's how I see it: It isn't just an Obama thing, it's a complete government thing. Small business simply doesn't have any political clout to get the attention of the government and get some assistance. Big business and big banking spends far too much money on lobbying for all elected persons to ignore. The whole system is corrupt from top to bottom. Banks got a free handout which they are sitting on after paying out bonuses to their top senior management and they don't even have to answer what happened to all that money.

    Small businesses are going to be eternally screwed with how our government currently is. Make no mistake, it isn't just a democrat or Obama fuck up. It's a total government and big business fuck up.

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    Here's the problem that finally came home to roost, Alkesh Patel, a 44-year-old immigrant from India, borrowed about $5 million to open the Best Western Plus motel on Main Street.

    Five years later, he stands to lose 2 of his 6 hotels...How many people born in this country can can get loans like that.

    These policies have come back to haunt this country!



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    Quote Originally Posted by Big Pimpin View Post
    Read the article.

    Its not the just fact business is slow because of some bullshit that happened last decade, it's because these hotel owners today are either having the rug pulled out from under them because their mortgage got sold and the new investor said pay up, or they can't get re-financing because values are down (current LTV issues) and the sorry fucking bailed out banks don't like the hospitality (or any other) industry at the moment. As much as I can't stand a smelly Indian, the article states how heavily invested these Indians are into their properties (in other words not 5% down) and they still can't get a re-fi on their mortgage.

    How is it Obama and Co. can guarantee and lose a $500 mil loan on a speculative solar industry, bail out the UAW who have nothing but a 40hr work week invested in their companies and socialize the top 10 bank's losses while capitalizing their profits, yet Obama et al can't come up with a plan to let small business after small business re-fi their property?

    While this article is only focusing on hotels, there is about to be a major epidemic of small businesses going under due to being unable to re-fi their commercial properties for many reasons out of their control.

    Now why would small businesses need to re-fi? Because commercial mortgages are 5-10 year products typically with balloon payments. There's no such thing as a 15 or 30yr mortgage product for small business, so the small businesses that have survived this initial recession/crisis are soon coming due for their re-fi's and there isn't a god damn thing Obama and have cronies have lined up to help them.
    So what do you suggest, Obama forcing banks to keep these loans or giving the companies a bailout? Also, what do you expect the GOP to do that would be better? Aren't they cutting costs, not increasing them? Even if Obama put legislation forth to do that there is no way the house let's it pass. Dem or GOP, we're fucked.
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    Furthermore, if I was the victim of predatory lending and bought too much of a house I need to pull myself up by the bootstraps, but if I bought a $5 million hotel and the banks pull some shady shit I get a bailout? Bullshit.
    If sense were common, everyone would have it.

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    Big Pimpin gets all his info from the tv, he has the economic IQ of a gnat...deregulation in the banking sector has caused nothing but problems for country's and small business owners for the last 100 years years all over the globe...

    Obama also caused the banks to fail in 1929 and the stock market crash that occurred after that....I could not imagine being so stupid but this is what happens when people are educated on certain topics by television. I could not think of a worst place to get information from.
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    Quote Originally Posted by Big Pimpin View Post
    BATTLE GROUND, Wash.—Alkesh Patel, a 44-year-old immigrant from India, borrowed about $5 million to open the Best Western Plus motel on Main Street in this city of 17,500 north of Portland, Ore.

    Five years later, Mr. Patel still works the front desk with his wife, chats with the housekeeping staff and helps do laundry while making the morning rounds, much as family members have done at other motels nearby for two decades.
    The Patels' Hotels

    View Slideshow



    Darryl James for The Wall Street Shirish Patel helps Maribel Mendoza at the Hampton Inn he owns in Clackamas, Ore. He said he is in danger of losing two of his six hotels.





    But Mr. Patel doesn't own the Best Western anymore. The bank that lent him the money failed in 2008, and his loan was sold to one of the many investment firms specializing in buying distressed assets from the Federal Deposit Insurance Corp. in the wake of the financial crisis. The new owners of the loan demanded $3 million in repayment. Mr. Patel didn't have it, so the owners foreclosed.

    "We just needed six months or so to tide us over," said Mr. Patel.
    Mr. Patel's comedown from property owner to hired help is part of a commercial real-estate slowdown that has swept through the roadside lodging business in the U.S. Many commercial real-estate properties declined in value during the financial crisis. But after a postcrisis rebound, concerns about the U.S. economy have cooled the market recently in many areas of the country.

    About half of the nation's 50,000 motels are owned or controlled by immigrants who trace their origin to the state of Gujarat in western India, many with the last name Patel.

    But hundreds of those hotel and motel owners now are fighting foreclosure, while others have lost their properties to lenders, said Hemant Patel, chairman of the Asian American Hotel Owners Association. The Atlanta trade group represents nearly 10,000 immigrants of Gujarati descent in the U.S. with lodging properties valued at an estimated $130 billion.

    The group's president, Fred Schwartz, estimates some 10% of its membership may be in default on loans or in the process of loan restructurings. More than 200 motels in California run by the trade group's members are in default or foreclosure and more than 1,000 other properties across the U.S. might be in similar trouble, he said.

    The problem isn't just overbuilding and an epidemic of empty rooms. Some borrowers missed loan payments, while others fell afoul of loan terms when business at their motels took a nose dive during the financial crisis.

    Some lodging owners said they were snarled by lenders eager to purge their portfolios of commercial real-estate loans. And two small banks that specialized in loans to lodging owners with Gujarati ancestry failed, eliminating a financing source.

    "We never missed a payment," said Bhaskar Zaver, an immigrant from Zambia of Gujarati ancestry who borrowed $2.7 million from BB&T Corp. to buy a Microtel Inn in Lawrenceville, Ga. The loan was due to be refinanced last year when BB&T, of Winston-Salem, N.C., sent a foreclosure notice, demanding that he pay off the loan, he said.

    Revenue at the motel shrank to $400,000 last year from a peak of $1 million before the financial crisis, and its value has declined, but Mr. Zaver said he tapped his savings to avoid falling behind on the mortgage. He was about to refinance with a different bank when BB&T sold the loan for $800,000. The loan's buyer foreclosed on the property, and the Microtel has been empty since March. He said he has lost about $750,000.

    "BB&T explores every possible solution and alternative to help clients resolve loans that are in default," said David White, a BB&T spokesman. He wouldn't comment on Mr. Zaver's loan, citing privacy rules.

    For decades, people with the surname of Patel have been among America's most successful immigrant stories. After arriving in the U.S. in the 1970s from countries such as Uganda, Kenya and Zambia, and from India in subsequent years, these immigrants grabbed an opportunity from the U.S. government to get green cards in return for putting up as little as $40,000 to run a business that would generate jobs in depressed communities.

    These immigrants, often college-educated Hindus, liked the motel industry partly because they could employ family members. Restaurants weren't popular choices for these businessmen because they were uncomfortable handling meat due to their Hindu beliefs.

    Over time, Patels became entrepreneurs in small cities and towns across America. Families often own or operate several properties, leaning on economies of scale to squeeze profits from the low-margin motel business. But the current turmoil threatens to undo all that hard work, some motel owners said.

    Banks are calling in some loans and are leery of financing construction of new motels because of economic uncertainty and concerns about the health of the commercial real-estate market.

    Shirish Patel, an obstetrician and gynecologist in Clackamas, Ore., is in danger of losing two of the six motels he co-owns because the bank, Columbia State Bank of Tacoma, Wash., wants "me to buy the loan out for $1.5 million," he said. "None of the banks are willing to loan to the hospitality industry."

    Dr. Patel, 52, said he "cannot afford to file for bankruptcy," adding that he already has sunk nearly $3 million into his motel properties. Columbia State Bank spokeswoman JoAnne Coy wouldn't comment on the lender's actions, though she said bank officials "recognize a lot of businesses are being challenged in today's economy."

    Vijay Patel, a naturalized U.S. citizen born in Uganda, forfeited more than $150,000 in licensing fees on four properties after failing to find a bank willing to lend him money to build the motels.

    Mr. Patel, 55, said he never missed a loan payment since getting into the business in 1994, and his motels in Oregon and Washington are profitable and employ 120 workers. "Everyone says these towns need jobs," he said. "I can provide lots of jobs."




    At least Obama can guarantee $500 million in loans to something speculative and unproven in the long term like solar energy panels.

    Hate to say it, but it sounds like the GOP is getting exactly what they want.
    All industries controlled and run by big Corporations.

    It's sad, but no more Family owned, mom and pop, style of businesses are going to be welcome in the U.S. anymore.

    Welcome to the machine.

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    Quote Originally Posted by Zaphod View Post
    You are absolutely right. They have nothing planned to help out the small business owner. Why? Because it isn't in the financial interest of anyone in the government.

    Here's how I see it: It isn't just an Obama thing, it's a complete government thing. Small business simply doesn't have any political clout to get the attention of the government and get some assistance. Big business and big banking spends far too much money on lobbying for all elected persons to ignore. The whole system is corrupt from top to bottom. Banks got a free handout which they are sitting on after paying out bonuses to their top senior management and they don't even have to answer what happened to all that money.

    Small businesses are going to be eternally screwed with how our government currently is. Make no mistake, it isn't just a democrat or Obama fuck up. It's a total government and big business fuck up.
    I agree, there is no finger pointing to be done here as it is a problem as a whole. Would I rather see money going to small business owners like those mentioned in the article who employ a lot more workers than the likes of Solyndra, absolutely. The sad part is no one in the current administration sees these bad "green" investments as bad at all so they get lots of attention and money while banks fuck over the little guy who employs 10 times the amount of workers for a fraction of the investment needed on a per employee basis. That is the problem we face on top of what is mentioned above by Zaphod.
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    Quote Originally Posted by IronAddict View Post
    Here's the problem that finally came home to roost, Alkesh Patel, a 44-year-old immigrant from India, borrowed about $5 million to open the Best Western Plus motel on Main Street.

    Five years later, he stands to lose 2 of his 6 hotels...How many people born in this country can can get loans like that.

    These policies have come back to haunt this country!
    this..^^^^ how the fuck did he get 5 million
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    Quote Originally Posted by Dark Geared God View Post
    this..^^^^ how the fuck did he get 5 million

    Everyone knows Indians have good business sense.

    They are very honest people too.

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    Big Pimpin,

    thanx for this story. Very interesting.

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    Quote Originally Posted by Thee_One View Post
    Everyone knows Indians have good business sense.

    They are very honest people too.
    You don't work for my Indian boss, he is the shadiest mofo I have ever met. No boss I have ever had is more concerned with making everyone happy and kissing ass than standing up for his employees than this guy. For the love of god I hope you were kidding.
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    this is offensive that immigrants get multi-million dollar loans so easily and natural born americans can't hardly get payday loans
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    Quote Originally Posted by oufinny View Post
    You don't work for my Indian boss, he is the shadiest mofo I have ever met. No boss I have ever had is more concerned with making everyone happy and kissing ass than standing up for his employees than this guy. For the love of god I hope you were kidding.

    That sucks man. Sorry to hear it.

    I was half kidding (making a pun on all the Indian gas station owners).

    But I do like the Indians. Mostly because I've studied Hinduism.

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