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Pennsylvania

Stay Pittsburgh

About Documents
0%
$0 Funded
$50,000 Target
Closed Time Left
0 Investors
$50,000 Min. Raise
$107,000 Max. Raise
mo. Term Length
% Interest Rate
Closed

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Overview

Stay Pittsburgh is an apartment-style hotel serving regional and international customers ranging from sports enthusiasts, entrepreneurs, young travelers, local weekend warriors, conference goers, and the like. They enjoy Stay Pittsburgh's fun culture, affordable prices, and convenient amenities and location.

Through 2018 and 2019, we were the largest Airbnb provider in the city. We are also the only locally-owned and independently-operated hotel in downtown Pittsburgh.

We are raising $107,000. There is a six month interest-only period at 3.75%, followed by a 30 month fully-amortizing period at 9.00%.

 

We are continuously building in high-tech solutions to our guests' experience.

 

The Project

Working capital reserve - support staff wages during COVID through the winter ($30,000) 
This ensures adequate staffing and job security despite risk of second wave or operating losses through winter months.

Leasehold improvements - flooring ($25,000)
Flooring updates from commercial vinyl tile to faux wood vinyl plank will drastically improve appearance of rooms supporting estimated 10-15% price increase, create a cleaner, more modern look, and result in improved customer reviews translating to improved ranking on booking platforms.

Automated digital entry system ($15,000) 
This will upgrade existing physical key and lockbox system, enabling improved customer experience at check-in, improved security, promote automation, and cut down on expenses related to tracking down missing keys and replacing locks. The automated system from Operto and Yale also includes in-room monitoring technology including a decibel sensing to prevent noise complaints and CO2 sensing to monitor occupancy, enforcing extra guest fees and preventing unplanned parties.

Refinance debt - pay off existing short-term and other debt ($60,000) 
Paying off existing debt will improve cash flows and build the businesses credit, while also removing covenants in convertible debt that hamstring the business' growth.

Technology - app for in-room purchases ($20,000) 
Custom app for in-room purchases will enable guests to book directly with StayPGH instead of the platforms (Airbnb, Expedia, Booking, etc) that introduced them to the property, leading to improved retention, better value for the guest, and less commission/marketing costs. The in-room app will also promote ancillary revenue generation through late check-out purchases and provide an environment for further amenity sales.

Electric Scooter Amenity Project ($35,000) 
This will generate approximately $10,000 in additional revenue. Needs include staffing, leasing garage space within building, and marketing. Scooters will also create an attraction at the property and will be co-branded and wrapped to market StayPGH accommodations throughout the city.

Expand within building to increase capacity by 30% - furniture and construction ($65,000)
Expansion project funds will be used to lease and re-convert the second floor of the property back into apartment accommodations, from what is currently set up as a daycare that will be phasing out of the building in the coming year. The expansion project assumes additional commitments from property owners and will add an additional 7 to 10 apartments for rent.

 


Upgrading our floors from commercial vinyl to faux wood vinyl plank supports an estimated 10-15% price increase.

Business

History

In late 2016, I leased a two-bedroom, two-bathroom apartment at 100 Smithfield Street, while working at Idea Foundry, an economic development organization in Oakland. At the time, Airbnb was becoming popular and I listed half of my apartment on site. Quickly, I realized that I could earn more twice my rent if only I could list my entire apartment. 

After working out a lease agreement including a first right of refusal with the property owners, my small Airbnb operation quickly grew into a hotel-like accommodation, taking on each and every newly vacant apartment, coming to lease over half off the downtown property. Proceeds were heavily reinvested into custom in-house marketing and technology development and I fundraised several hundred thousand dollars over the past couple years to come up with a proof-of-concept for a high-tech, delightfully designed, semi-automated hotel. 

The vision was to develop technology that would, at scale, deliver a wonderful guest experience at a lower price. Developing custom in-house solutions would protect margins and set the company up to scale. Despite working tirelessly to execute on that vision, 2019 was a year of learning. While grasping to develop many different aspects of software and hardware including a content management system, point-of-sale system, property management system, channel manager, analytics, automated check-in kiosk, beacons for proximity sensing, smart home automation, and more, the industry for short-term rentals and independent hotel operators quickly evolved. We were doing too much while off-the-shelf solutions from vendors such as Guesty, Operto, Rentals United, Your Welcome, Yale Locks, IFTTT, and the like quickly developed into fantastic products, perfect for our operation. 

At the end of 2019, the company decided to shelf most of its custom tech and marketing projects and focus on serving its customers while curating a unique set of off-the-shelf solutions that would advance the company's mission more effectively and efficiently. The experience enabled learning in each area of product development and a deep sense of understanding into how to integrate commercial solutions across analytics, smart-home tech, distribution and marketing, property management. 

At the start of 2020, the company was leaner than ever before. Unlike our biggest local competitor, Stay Alfred (which recently went out of business), the company's lean operations gave us the ability to weather the storm when the COVID-19 outbreak began. Demand for our extended stay accommodations remained solid, especially compared to local hotel operators. At the same time, our experience with custom-solutions has empowered the company to quickly adapt; we understand the competitive landscape and which solutions will have the greatest return on investment. Now the company is in position to make these improvements, "build a better mousetrap," and look toward expansion in 2021.

 

We are the only independently-owned hotel in Downtown Pittsburgh.

 

About the Owner

Zachary Patton is a serial entrepreneur founding three companies: Ruby Ride, a transportation technology company, spanning several states and receiving over $1.4 million in federal grants; Orange Astronaut, a marketing agency specializing in web design and video production; and Stay Pittsburgh, an independently owned and operated apartment-style hotel located in downtown Pittsburgh. He caught the startup bug studying innovation policy at a think-tank in Rio de Janeiro while on a Boren Fellowship. After returning stateside he helped dozens of entrepreneurs launch their companies at Idea Foundry, before delving into launching his own businesses. Combined, Zach has generated nearly $3 million in revenue and at one point managed a team of 24, ranging from designers, salespeople, software engineers, and other staff.

 

Come stay with us!

Deal Summary

Summary

Issuer

  Stay Pittsburgh LLC

Security Type

  Secured loan

Loan Purpose

  Relief + Equipment

Offering Amount

  $50,000 - $107,000

Interest Rate

  3.75% interest-only + 9.0% fully amortizing

Payments

  Monthly, disbursed to investors quarterly

Maturity

  6 months interest-only + 30 months fully amortizing 

Personal Guaranty  

  Zachary Patton

Security Interest

  Blanket lien on assets of company

Offering Portal

  Honeycomb Portal LLC

Offering Type

  Reg CF

 

Your Earnings Potential

If you choose to invest, you will make a one-time investment via ACH that will be transferred to a secure escrow account. If the campaign successfully reaches its target, the funds will be distributed to Stay Pittsburgh LLC.

For more information on the mechanics of Honeycomb’s crowd investing platform, please review our Education Materials

 Investment Amount   One-Time Fee 

 Potential Quarterly

 Return: Interest-Only Period* 

 Potential Quarterly

 Return: Amortization Period* 

 Potential Total Repayment* 
 $100  $2.85  $0.93  $11.30   $113.92
 $500  $14.25  $4.68  $56.02   $569.60
 $1,000  $28.50  $9.37  $112.04   $1,139.19
 $5,000  $37.25  $46.87  $560.22   $5,695.97

Your ongoing responsibilities from investing are very limited. Over the life of the loan, you will receive a yearly 1099-INT, which is a simple tax document similar to what you receive for most savings accounts.*Individual payments may vary slightly based on rounding. Potential repayments include principal and interest; they do not include the one-time fee which is assessed when you make your investment. These amounts are calculated as a hybrid interest-only + amortizing loan, which means that there is a specified interest-only period followed by a an amortization period. There are no prepayment penalties and Stay Pittsburgh LLC may pay down their loan early, which may impact your earnings potential. Please note: returns are not guaranteed and investors could lose some or all of their investment.

Stay Pittsburgh LLC pays as agreed. You will receive quarterly payments directly into your bank account. In the event of a default, you will be contacted by the administrative agent to manage the collections process on the investors' behalf.

 

How Honeycomb is Compensated

Honeycomb charges Stay Pittsburgh LLC a $250 posting fee and a 6.0% loan origination fee on the total amount funded.

Additionally, to cover expenses associated with each investment, Honeycomb charges a 2.85% investment fee capped at $37.25 per investor.

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Offering Documents

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