B&B for sale - has me dreaming

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05/30/2012

Hi all!  DH and I are facing that dreaded.... or not so dreaded (depending on what day you talk to us) "empty nest" in a few years.  DS has one more year of high school, but may be living with us for several more years depending on his college choice which currently is local.  Retirement is 10-15 years away, but I'm already thinking and dreaming of where we want to take our future.  I have always known where I want to retire and it is in a resort area with numerous successful B&B's (or maybe they just appear to be successful, but they seem to be surviving this economy!).  I found a B&B for sale and even though the timing isn't right, it has me researching and dreaming... wanting to learn everything I can about this lifestyle.  I have a couple of questions and hoping you all can help....

Is financing a B&B any different than financing your personal residence --- assuming that you purchase an operational B&B with resident's quarters in the house and will live there?  Is the Inn's rental history treated as income for the debt ratio?

If anyone has purchased a well rated/reviewed existing inn, did you make changes after your purchase or try to conform to previously existing policies?  menus?  rates?

Thanks for any and all insight!

N

 

 

 

Aussie Innkeeper's picture
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 I would not hire someone to innsit for me who had no experience. However, I would offer that person some of my time to 'shadow' me for a while and then maybe do some check-ins when I was out and let them ease into more and more responsibility. To have someone like that around would be pure joy! 

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Aussie Innkeeper wrote:

 I would not hire someone to innsit for me who had no experience. However, I would offer that person some of my time to 'shadow' me for a while and then maybe do some check-ins when I was out and let them ease into more and more responsibility. To have someone like that around would be pure joy! 

I like this idea!  Too bad I don't live closer to you.  Smiling  I am planning to be in your area sometime this year.... hopefully can stop by and say hello!

Hillbilly's picture
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Welcome!! Glad you have joined us! First of all make sure you understand that innkeepers are some of the hardest working people in the world! So understand, that at times myself included come here to vent and get support! We all come up with great ideas to better what we do. I am going to cut to the question on hand. If you are nearing retirement age, I would reconsider being an innkeeper unless you are going to have a staff of people to help you! You will work harder than you can ever imagine doing this job. I had 2 couples at breakfast talk about opening up a Bed & Breakfast when they retire. I told them they should consider innsitting! Maybe this is something you might think about! They thought that was a great idea. If you still think you want to adventure off into this crazy line of work, try a practice run! Get up and make a home cooked meal for your family. Clear the table and do the dishes. Then go clean their rooms and make their beds. Wash sheets and towels and clean the house. Go to the store and restock supplies....ect.... You get the idea. All of this before 3 pm. Oh and don't forget the afternoon snack when everyone gets home. There I'd s lot more than this during the day to do. This is just a few things. Oh did I mention you need to do this everyday for 6 months without a day off! If you get sick or have to leave, make sure somone covers for you! If you can do this, you might be able to do this job! Best of luck!

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 Bob, you left out all the bookkeeping, website update, phones and emails.

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 Only problem with the innsitting idea..which we have discussed here many times....who is going to hire someone with NO EXPERIENCE to innsit?  I certainly would not.

Hillbilly's picture
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I would agree! the shadow idea is great! Work with someone and work into being an innkeeper slowly. My point is this. Retirement age is not a good age to start a B & B! You could probably handle a hobby B & B. I started being an innkeeper when I was 19. My mother had to move to KC and take care of my Grandfather shortly after she opened. I had been at the Bed and Breakfast for ever step of building it and running it. We started in 96. I married very young and my wife and I have been running it from that point on! I'm now 33 and I'm really tired at the end of the day. My last day off was March 11. My next day off is Aug 12- 20. We blocked that off so we could spend time with our kids before they go back to school! I love what I do! I don't want people to think being a innkeeper is not! Especially if you have small kids! For those of you who live in your B & B with your guests, my hats off to you!

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Bob wrote:
I would agree! the shadow idea is great! Work with someone and work into being an innkeeper slowly. My point is this. Retirement age is not a good age to start a B & B! You could probably handle a hobby B & B. I started being an innkeeper when I was 19. My mother had to move to KC and take care of my Grandfather shortly after she opened. I had been at the Bed and Breakfast for ever step of building it and running it. We started in 96. I married very young and my wife and I have been running it from that point on! I'm now 33 and I'm really tired at the end of the day. My last day off was March 11. My next day off is Aug 12- 20. We blocked that off so we could spend time with our kids before they go back to school! I love what I do! I don't want people to think being a innkeeper is not! Especially if you have small kids! For those of you who live in your B & B with your guests, my hats off to you!

Bob... your points are well taken.  The fact is, I am 52 and DH is 48.  We would be unable to make any kind of change before DS graduates from HS next year, so we'll be at least one year older.  We are both in good health.  I look hard at what you are saying because I am looking to move to a high volume tourist area, so theoretically should be very busy "in season".  A lot of the B&B's in this area are 4 beds, and this is probably what we would be looking at.  I wouldn't want any more than that anyway.  After 5-10 years of operations, DS may want to step in and begin taking over and that would please me very much.  He's 17, plans to go to community college and doesn't really know what he wants to do at this point.  Again, I've just started even thinking about this and all feedback is appreciated.  I haven't been scared off yet Smiling 

gillumhouse's picture
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I was 50 when I opened. 16 years later my knees ask me daily where my brains are. Although a couple of my kids talked about taking over where we leave off - I know it will never happen. NONE of my kids would be happy in this small city and I know it. (I think deep down they know it too.) When DH dies, it will be on the market as soon as I can clear his stuff out of here and make it look like a place someone would like to live (owner's quarters). I know it will take a while to sell but I want to sell it as a B & B. I plan to sell the property and the furnishings are bonus.

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gillumhouse wrote:

I was 50 when I opened. 16 years later my knees ask me daily where my brains are. Although a couple of my kids talked about taking over where we leave off - I know it will never happen. NONE of my kids would be happy in this small city and I know it. (I think deep down they know it too.) When DH dies, it will be on the market as soon as I can clear his stuff out of here and make it look like a place someone would like to live (owner's quarters). I know it will take a while to sell but I want to sell it as a B & B. I plan to sell the property and the furnishings are bonus.

I know we have to think about the future and everything, but to hear about it, is kinda sad Sad

 

gillumhouse's picture
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I love what I do but the stairs are knee killers when your knees have been abused all your life. I plan to sell because my city NEEDS a B & B and that is the only way I can guarantee it stays a B & B. I have spent a lot of money and given my all to make this a business with an excellent reputation. If I die first, it will go back to being a house and all my efforts will have been for nothing.

Breakfast Diva's picture
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Olga wrote:

gillumhouse wrote:

I was 50 when I opened. 16 years later my knees ask me daily where my brains are. Although a couple of my kids talked about taking over where we leave off - I know it will never happen. NONE of my kids would be happy in this small city and I know it. (I think deep down they know it too.) When DH dies, it will be on the market as soon as I can clear his stuff out of here and make it look like a place someone would like to live (owner's quarters). I know it will take a while to sell but I want to sell it as a B & B. I plan to sell the property and the furnishings are bonus.

I know we have to think about the future and everything, but to hear about it, is kinda sad Sad

 

Planning on getting out of being an innkeeper is just as important and the plan on getting in.

Madeleine's picture
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Ah, 4 rooms. That is like a vacation day for us.

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Aussie Innkeeper's picture
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 If you're going to buy an existing inn, then you're buying a business so the cost of that would be equal to the price of the property, the stuff IN the house (FF&E - furniture, fixtures & equipment) and the 'goodwill' of the business itself. So, unless the house appraises very high and maybe you can come up with the downpayment to cover the value of the other two factors, you'll be looking at a commercial loan. There are people out there who can help you with that. Rick Newman at InnFinancing comes to mind - www.commercialcapitalnetwork.com 

Also, find yourself a real estate agent/broker/whatever you want to call him/her who deals in hospitality properties. There are differences in the sale of these from just residential real estate.

What area of the country are you looking? I could go on and on. Feel free to e-mail me sometime.

gillumhouse's picture
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Welcome. Since I am small, a start-up, and not in a tourist area - YET!  I am working on making it one - I will let those who have purchased  answer your questions.

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05/30/2012

Just starting any serious research.  However,  I used to have a good friend who was an innkeeper (not an owner).  He actually put me to work washing dishes, making beds and doing laundry one day when I stayed at his inn!  Smiling   This was about 10 years ago and I was single and not of a mindset to embark on this journey, even though I enjoyed the day.  I am happily married now (2nd marriage for both of us) and DH and I love opening our home to friends and family.  We are both excellent cooks and we both have business, accounting and sales experience.  Currently he is in retail management and I am an accountant for a manufacturing company.  He would probably transfer to the area we want to live and continue to work for his current employer and I would manage the Inn on a daily basis.  Since he is in retail and his hours are so varied, he would be able to help at times to give me a break.

I've been reading here for several hours and saw several posts about the aspiring innkeeper courses.  I've check my area and DH and I could possibly attend one in the fall which I think is a great idea!  The most daunting thing to me is taking on tremendous debt at our age, so developing a business plan and cash forecast will be crucial before we can make a final decision on a property.  Even so, paying the premium for a turnkey property with a book of business still seems like a smarter move than starting from scratch.  If past financials and forcasting show probability of the Inn covering the mortgage and business expenses, I think it's something we will pursue.   

I'm rambling here, so I'll shut up and look foward to others' thoughts and comments!

Arks's picture
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05/22/2010

 How much research on "this lifestyle" have you done so far? Have you been lurking here long? Have you read any books on the subject? Running a Bed & Breakfast For Dummies is a good one. Have you taken an aspiring innkeepers class yet? Your state hospitality assn. or b&B assn. can probably help.

Lots of good advice here. You're in for a wild ride!

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All saints can do miracles, but few of them can keep hotel. ~ Mark Twain

 

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