A Woodland Park investor nabbed an airport hotel for $551 at the El Paso County Trustee’s foreclosure auction last week.
Spencer Hovanetz, who runs HP Holdings, won the bid for the America’s Best Value Inn & Suites at 1780 Aeroplaza Drive. The hotel, built in 1997, is a functioning inn still taking reservations and accepting guests, according to manager there.
The initial bid on the $567,597 loan was just $1 from the lender. Hotel owner Sou So Chong bought the property in 2007 for almost $3.1 million and financed more than $2.5 million of the purchase price according to the El Paso County Assessor’s records.
That means the $0.5 million loan that Hovanetz bought for $551 is most likely a junior loan.
“Once HP [Holdings] becomes the owner of the property,” trustee Tom Mowle explained in an e-mail, “they would have the right to ‘cure’ the default if the senior lien goes into foreclosure. A cure generally means paying the missed payments plus penalties and fees. It’s fairly common in commercial loans, however, for the entire note to become due in case of default.”
HP would not likely be able to sell the property with the senior lien still on the record, but Hovanetz could make payments on the larger loan and take over ownership of the hotel, operating it as his own, Mowle wrote.
“We figured we will probably lose the $550 that we bid on this,” Hovanetz wrote in an e-mail. “But if the senior lien holder forecloses, we would have first opportunity to look at it and see if it makes sense to purchase the hotel.”