Executive Summary – Why DeRosa Capital 20?
Imagine owning two cash-flowing Hilton hotels, without lifting a finger.
That’s the opportunity with DeRosa Capital 20—a dual-property portfolio of stabilized Hilton-branded assets in Milwaukee and Houston. This offering provides investors access to:
✅ Daily-pricing revenue flexibility
✅ Built-in loyalty demand through Hilton Honors
✅ Immediate cash flow with long-term upside
✅ Strong exit optionality to REITs, institutional buyers, and 1031 investors
DeRosa Capital 20 was secured off-market, priced well below replacement cost, and underwritten with conservative assumptions. With regional bank financing, experienced operators in place, and a clear 5-year hold strategy, this is the kind of deal that checks all the boxes: brand strength, stable income, recession resilience, and upside potential.
Investment Summary
This offering is a $22.5M portfolio comprising two stabilized Hilton-branded assets: a Hampton Inn & Suites (2015 Build, 101-Keys) and a Home2 Suites (2019 Build, 92-Keys). These are not distressed or repositioning plays—they’re cash-flowing day one with upside through operational improvement and revenue optimization. DeRosa is targeting a $8.7M equity raise, with a projected 16–20% AAR, 9% to 11% Cash on Cash, and 1.9x–2.1x equity multiple.
Two locations. Two markets. One unified strategy. We’re packaging these complementary assets to provide investors with geographic and demand-stream diversification—event, medical, corporate, and airport traffic all contribute to occupancy and ADR.
Why Hotels?
The hotel sector is undergoing a transformation. Post-pandemic recovery, combined with inflation-driven ADR growth and travel rebounds, is driving performance. We’re targeting cash-flowing hotels in strong secondary markets, where we can enhance value without major repositioning, and benefit from operating leverage, professional management, and branded loyalty programs.
Hotels offer a unique blend of real estate and operational business, allowing for daily repricing, margin optimization, and rapid response to market demand. Unlike traditional apartments, hospitality assets can generate outsized returns through smarter operations, better branding, and focused management. In a post-COVID world, travel is booming—and we’re positioned to benefit.
Why Hilton?
Hilton is not just a name—it’s a competitive edge. These hotels benefit from Hilton’s built-in booking engine, loyalty programs, operational support, and brand-driven pricing power. This translates to higher RevPAR, increased occupancy, and a broader buyer pool upon exit—all critical to protecting and growing investor capital.
Why REA Capital Management & The DeRosa Group?
At REA Capital Management in partnership with the DeRosa Group, we’ve been helping investors build wealth through real estate since 2005. With over $175 million in assets under management, $30 million in investor distributions, and an average 22% IRR on deals that have gone full cycle, our track record speaks for itself.
What sets us apart is our commitment to transparency, alignment, and execution. We don’t just structure great deals—we manage them with care. Every asset we acquire has been underwritten conservatively, capitalized thoughtfully, and selected with our investors’ long-term outcomes in mind.
DeRosa Capital 20 is our first hotel fund, but we’re not going it alone. To ensure operational excellence from day one, we’re partnering with proven Hilton hotel operators—teams with deep experience running brand-aligned, performance-driven hotels across the country.
Our Partners
Hospitality is an operationally intensive asset class—and we embrace that. Instead of learning as we go, we’re bringing in professionals who already know how to maximize revenue, control expenses, and deliver top-tier guest experiences.
Why These Markets? (Houston & Milwaukee)
Milwaukee is a year-round destination fueled by major medical, business travel, sports, and one of the country’s most
event-packed summer calendars. Houston is a global energy hub with a top 5 airport by passenger traffic (IAH), strong extended-stay demand, and business travel anchored by Fortune 500 employers. Together, they provide geographic and demand-stream diversification.
What’s the Strategy?
Both Hilton-branded hotels are stabilized, cash-flowing assets with immediate income in place. Our business plan focuses on light value-add through brand-required PIP improvements, revenue optimization, and hands-on asset management. We are installing Hilton-experienced operators to drive higher ADR and occupancy while maintaining lean operating expenses.
On exit, we’re targeting a 5-year hold with strong cash flow throughout. Given the institutional branding, size, and location of these assets, we anticipate a broad buyer pool at exit—including REITs, institutional investors, 1031 buyers, and private operators—creating multiple paths to liquidity and upside.
Market Deep-Dive: Houston
Houston is one of the most economically resilient and business-friendly cities in the U.S., making it an ideal market for cash-flowing hospitality.
🛫 Strategic Airport Proximity
Located minutes from George Bush Intercontinental Airport (IAH), Home2 Suites captures consistent demand from over 40 million annual travelers—especially business and extended-stay guests.
⚡ Corporate & Energy Hub
Home to 21 Fortune 500 companies, Houston generates year-round travel demand from oil & gas, aerospace, logistics, and healthcare—creating durable occupancy and rate strength.
📍 Undersupplied Submarket
Situated in the North Beltway/Greenspoint area, the hotel serves a growing need for branded, extended-stay accommodations—ideal for contractors, consultants, and flight crews.
📈 Operational Upside
Purchased off-market and well below replacement cost, the asset will benefit from improved revenue management under a Hilton-aligned operator and continued ADR growth.
🛡️ Resilient Economics
Houston’s diversified economy, low taxes, and strong population growth have made it a top-performing real estate market through multiple cycles.
🏨 Home2 Suites Houston IAH – Property Overview
This 92-key, Hilton-branded Home2 Suites was built in 2019 and sits just minutes from George Bush Intercontinental Airport (IAH)—one of the busiest travel hubs in the U.S. With consistent 80%+ occupancy and a growing ADR, this asset is already cash-flowing and positioned for sustained performance.
We’re acquiring the property off-market at just $120K per key, well below today’s $180K–$200K+ replacement cost. Backed by Hilton Honors loyalty and located in a high-demand corporate corridor, the hotel serves business travelers, flight crews, and extended-stay guests with spacious suites and essential amenities.
Key highlights:
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Stabilized with 85% occupancy and $3.1M+ annual revenue
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Built-in growth via ADR optimization (projected to rise from $104 to $125 over 5 years)
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$950K PIP reserved for 2028 ensures continued brand compliance
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Strong buyer appeal due to brand, condition, and location
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Projected 5-year NOI growth with consistent margin performance
With conservative debt (7% interest) and long-term demand from corporate travel and airport traffic, this asset combines institutional quality with operational upside—making it a cornerstone of the DeRosa Capital 20 portfolio.
Business Plan – Home2 Suites
We’re acquiring this 2019-built, Hilton-branded asset for just $135K–$140K per key (after PIP/Capex), significantly below the $200K+ replacement cost. Located near IAH Airport and major employers like Amazon and Halliburton, it’s already stabilized with strong RevPAR.
Operations will be further enhanced by a Hilton-aligned asset manager focused on tightening rate strategy, boosting direct bookings, and driving long-term efficiency—without disrupting cash flow.
We’re targeting ADR growth from ~$104 to $120+, driven by smarter revenue management and improved guest satisfaction—lifting RevPAR index from ~110% to 120%+.
A $950K PIP is scheduled for Year 4 and fully underwritten, with reserves in place. This light refresh (FF&E, soft goods) ensures brand compliance and strong positioning at exit. Minimal capex, meaningful upside.
Market Deep-Dive: Milwaukee
Milwaukee is an emerging Midwest market combining urban vibrancy with steady economic drivers—making it a smart play for reliable hotel cash flow and long-term value.
🎯 Event-Driven Demand
The Hampton Inn sits adjacent to the Wisconsin State Fair Park and Pettit National Ice Center, generating strong, recurring demand from concerts, sporting events, and conventions year-round.
🏥 Proximity to Major Employers
Located near the Milwaukee Regional Medical Center and Froedtert Hospital—two of the city’s largest employers—this hotel captures medical-related travel and corporate stays alike.
📍 Irreplaceable Location
This 2015-built, Hilton-flagged asset occupies a prime location on a high-traffic corridor, with excellent visibility and access to I-94.
📈 Revenue Growth Potential
While already stabilized, the hotel offers clear upside through strategic ADR optimization, especially during peak event seasons.
💼 Institutional-Grade Asset
Priced well below replacement cost and flagged under the Hilton umbrella, this is a Class A, 101-key asset that appeals to REITs, private equity buyers, and 1031 investors at exit.
Hampton Inn & Suites – Property Overview
This 101-key Hampton Inn & Suites, built in 2015, is located in West Allis, one of Milwaukee’s most dynamic submarkets—just steps from the Wisconsin State Fair Park, Froedtert Hospital, and other year-round demand drivers.
We’re acquiring the asset at just $115K per key, well below the estimated $180K–$200K replacement cost for new Hilton-flagged hotels. The hotel is already stabilized with strong RevPAR of $106+ and an ADR of $146+, and it continues to generate consistent income across seasons.
The 5-year business plan includes:
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Improving revenue through ADR growth (projected to reach $157+)
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Executing a $1.5M Hilton-mandated PIP (2025–2028), fully underwritten and focused on FF&E and brand refresh
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Enhancing operations with Hilton-experienced oversight
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Building NOI from $1.1M to $1.36M+ over the hold period
With its irreplaceable location, institutional brand, and strong in-place performance, this property anchors the DeRosa Capital 20 portfolio with durability and upside.
Business Plan – Hampton Inn & Suites
We’re acquiring this 2015-built Hampton Inn at $135K–$140K per key (after PIP/Capex), well below Hilton replacement cost. Despite its prime location near State Fair Park and Froedtert Hospital, the property is underperforming due to weak management.
We’re bringing in Solaris Hospitality, a Hilton-experienced operator, to drive improvements in service, rate strategy, and cost efficiency—positioning the asset for higher cash flow and long-term stability.
We’re targeting ADR growth from ~$146 to $155 by improving pricing and reactivating underused amenities like the bar, restaurant, and meeting space—none of which are included in the pro forma.
A $1.5M Hilton PIP in Year 4 (already underwritten) will refresh FF&E and brand appearance, while $450K+ in reserves ensures smooth execution and a strong exit profile.
Risk Mitigations
DeRosa Capital 20 is structured to protect investor capital in any market cycle.
Both hotels are stabilized, cash-flowing, and professionally managed, with stress-tested models showing they can absorb $1M+ in revenue loss and still breakeven. We’ve secured permanent financing with no refinance risk, using conservative underwriting and a 25-year amortization schedule for steady principal paydown. At exit, Hilton branding and completed PIPs ensure broad buyer appeal—from REITs to 1031 buyers—while $1M+ in reserves provides a smooth handoff and maximum resale value.
