Serious about changing careers

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Hello, this is my first post. I am a relationship coach whose goal is to retire from my teaching job this school year and buy a Bed and Breakfast where I can run couple's retreats out of. This has been my dream for a couple of years and I have attended one seminar about it. I was told that I should be looking at million dollar bed and breakfasts, but if I sell my current home, I will probably be left with 90,000 dollars tops. We don't mind a fixer upper since we have done some renovations on our own home and are thinking of putting the renovations on a You Tube channel. My question is, does anyone see this as doable? I am looking to buy in June and need to make some decisions soon. Any advice would be helpful.

ChrisandShelley's picture
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When looking at bed and breakfasts, also keep in mind the potential. We bought a 6 room bed and breakfast 4 years ago that paid for itself and that was it. Since then we added two rooms, built an event center and two cottages. We have expanded our business because of the location and the size of the property we were on.

I also think your YouTube idea is a great one. We just started a YouTube channel called Living the B and B Dream. It's a lot of fun plus the potential for future passive income is definitely there.

Good luck with your dream. Please keep us informed about your progress.

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Christopher and Shelley Smith, Innkeepers
The Wildflower Bed & Breakfast, Mountain View, AR

 

Aussie Innkeeper's picture
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This one might fit your needs 

https://www.youtube.com/watch?v=kQIaKL4Xfho&feature=youtu.be&fbclid=IwAR...

 

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Lynne
Queen of Everything!

 

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The cost of the B&B is not the important # in the equation.  It's more important what your bottom line is at the end of the year and if you're able to live the kind of life you want.  A lifestyle B&B many times doesn't provide much added income but you can work when you want and where you want, while a financially viable B&B should provide you with income and often is larger so it supports staff.  Those B&Bs are typically on the higher end.   For example, our B&B cost us a little under a million to build with us having 30% down and $75k in reserves while we got going.  Our sales are over $300k a year for a 10 room B&B, no restaurant.  80% of our income comes from July-October, the rest of the year it's only weekends.  A friend bought a B&B for $495,000 and is now considering turning it into year round shares for skiers and hikers to buy into as she doesn't make any $ at her place to afford to travel and do what she wants. Her 6 room B&B only does $105,000 in sales, her taxes are $10,000, her heating costs on the old historic building are huge, then add in insurance, internet, cable, electricity, food, maintenance, snow removal, mowing the huge lawn, etc. and you can see why running her 6 room B&B all by herself isn't worth it anymore.  If you have a loan then you'd have to pay your debt service out of this money as well.  She can hardly build up the money to put on a new roof she'll need in the coming years at about $20k, and god forbid a furnace goes out on her.  So while our B&B cost twice as much, we make 3x as much and close when we like (except the high season of course) and have one 24 hour per week employee year round.

If you're going to buy a business you'll probably be required to have a commercial loan which in today's market they want 25-30% down, a solid business plan, backup $ to pay the mortgage while your building your business, many times showing experience in hospitality.  If you buy a house and then work to convert it to a B&B, be sure that you get town approval to run a B&B in that house.  I'm a Realtor as well and you need to have your agent write it into the offer that it is "subject to receiving planning/zoning board approval for a B&B license."  Good luck!

gaelstorm's picture
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You just described me.  The friend with the 6 room place.  Now that I've paid off the bank, there are some (unfortunate) small liens against the place.  And I need a new roof too.   So...thinking of going long term weekly....which has its own problems.  Or half daily tourist and half long term screened weeklys  There is an affordable housing shortage on around here.  Advice please.

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galestorm

 

JimBoone's picture
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I suppose it depends on your lifestyle, needs, and desires as we are all different. I seem to remember an old saying in childhood that company and fish smelled after three days or something along that line.

I’ve rented property long term, business, but not much fun, when tenants moved it was time to paint and freshen up the property for the next tenant to call home.

I enjoy meeting the tourists that come and go, fun side of the work and the shorter stays allow me to service the property as needed between guests and keep in good condition.

The semi long term guest, I don’t know, to me seems like they would be long enough to increase the wear and tear, but not long or profitable enough to redecorate between guests, not my cup of tea.

I figure I’m also rather like the example of the friend with 6 rooms, not a huge income, but enjoy the life. We are an 8 room motel, like you, most debt has been paid off, my goal is to be the extra nice little place and beat the big hotels on price, so far it works for me. I did have the advantage of working another job till retirement, so suppose that helped us on the financial end

 

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Jim & Maxine

 

gillumhouse's picture
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We had pipe lines last year. I have 2 rooms that share a bathroom. I let those to pipe liners 1- person= $350 per week w/no breakfast & once a week housekeeping and if 2 people = $400 (plus tax of course). I have a small refrigerator & nuker upstairs. I hae done it before - always have had really nice people. My one rule which they observed was: no muddy boots beyond the porch.

In years past had a gentleman who missed cutting grass - he cut my grass at least 3 times in the month he was here. The folks last year did their own housekeeping, fixed things I needed fixed, ans wee wonderful. One even came back to do some paperwork and he painted a ceiling for me before he went home. (AND would not accept the room as comp in exchange-he still paid!)

I do not expect to ever get that kind again, but the guaranteed income was very nice. I still had my best room for travelers and got to sleep in.

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hello.

ChrisandShelley's picture
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You definitely DON'T need a million dollar property. We bought a 6 room B&B, expanded to 8 then added an event center and 2 cottages. We have have had couples retreats several times here through Family Life and through another marriage ministry called Choose2Stay.

You can have a couples retreat with just 4 rooms. Intimate retreats are just as well received as large retreats. The first one we had had only 6 couples and it was a huge success. The trick is to make sure that all of the numbers work out to where you're not losing money. We hosted our couples retreats in the off season, so it was great to have guests during that time and we could give them and the retreat leaders a good discount.

I would also suggest that you look for people willing to host it. It is VERY difficult to be the host, promoter, leader, counselor, and everything in between. There are many marriage ministries looking for places to have their seminars. Just seek them out and express your willingness to host. When you get your B&B, of course.

You can check out our BnB at www.wildflowerbb.com. It's not actually listed, but I think it's been said that ALL Bed and Breakfasts are for sale.  Smiling

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12/13/2011

Please take a look at my post today that might be a fit for you.  Certainly under $1 million and I will finance.
http://www.innspiring.com/node/19601
Armen Yousoufian

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Armen Yousoufian, Maury Island, Washington

 

Morticia's picture
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I will add this: follow the money. Who told you a million dollar property is what you need/want? What do they get out of you spending that kind of money?

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We were told this last year when we went to the seminar, but in all fairness at that time we wanted an inn that had a staff and was financially viable. We have since scaled back what we can expect for what we have. 

JimBoone's picture
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Love Coach wrote:

We were told this last year when we went to the seminar, but in all fairness at that time we wanted an inn that had a staff and was financially viable. We have since scaled back what we can expect for what we have. 

A few comments along that line, in the beginning my feeling was it didn't matter how much you owed as long as you made enough to pay the bills and make a profit, my wife on the other hand took the view to stay small, pay off the loan and then you own the business. Generally we followed her path and yes, no debt, no employees, no stress, it makes for a pretty good life.

JimBoone's picture
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Love Coach wrote:

My question is, does anyone see this as doable? 

So much depends on you, what you expect and a lot of luck. I don't have answers, just some questions, food for thought.

Will your "couple's retreats" be a supplement to your bed and breakfast or do you see this as the focus of the business? It seems that answer might enter into your choice of location.

Will the other half of "we" be working and providing an outside income as you get established? My "we" ran the business while I worked an outside job and was the night and weekend helper at the business for many years. Slow process, but in the end both are happy we made the choices.

We've been at this a long time now, but considering inflation your potential down payment doesn't look too far out of line from what we did years ago, however applying that same rate of increase to your total property cost, our total was far lower, 25% range. 

What's your back up plan if your desired plan does not work? Can you live in the property you choose, go back to teaching, or ?

Please don't forget operating capital and all those unplanned expenses. I believe it can be done, we did, but consider us simple folks, so much depends on you.

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Thank you for taking time to answer my questions. 

"Will your "couple's retreats" be a supplement to your bed and breakfast or do you see this as the focus of the business?"  I plan on having retreats from time to time as a supplement, I also plan to coach on the side as supplement. I would love to have a wedding site as well to supplement. 

"Will the other half of "we" be working and providing an outside income as you get established?" My other half has been a maintenance guy for most of his life and although he is very handy, he has not brought in as much money as I have teaching. I could continue to teach, but I am more personable and have knowledge around operating a business. He is willing to get a job to supplement the income and that is one of the options we are thinking about. 

I have a couple of questions for you. "Are you still working outside the B and B and if so, how long did it take for you to do that? Did you buy an already operating B and B or start one from scratch?

 

OnTheShore's picture
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I have a couple of questions for you. "Are you still working outside the B and B and if so, how long did it take for you to do that? Did you buy an already operating B and B or start one from scratch?

Our business is seasonal, we are only open to guests approximately mid-May to mid-October.

I have a full-ime, academic-year, job in higher education, so I work in the business during the summer, and on weekends and breaks the rest of the year. My spouse works in the business full-time from mid-April through the end of October (including opening and closing), and has another job as a ski race coach during the winter. 

We have been doing this since we took over managing the business at the end of the 2011 season, and foresee continuing in this mode for a few years still, unfortunately.

We inherited an existing business (well, my FIL is still the "owner"....)

 

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JimBoone's picture
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Love Coach wrote:

I have a couple of questions for you. "Are you still working outside the B and B and if so, how long did it take for you to do that? Did you buy an already operating B and B or start one from scratch?

Morning Love Coach, happy to answer questions, you're also welcome to PM/email me for more information or details than folks on the forum would want to read.

[1] No not still working an outside job, but that's a long story. Our first few years I flipped burgers, delivered newspapers, drove a bus, anything to bring in a little money before finding a job I enjoyed. I worked about 20 years on that final job, at about age 73 management changed and I was just an old fuddy duddy in their way and I retired. Working didn't prevent me from doing the things I needed to do at our business, provided health insurance, and allowed us to spend much of our profits on improvement.

[2] We purchased an existing business, now to be honest we are one of a few "odd" kids on the forum. We purchased an 11 room mom & pop motel in our usual vacation area, run down and in what was the wrong part of the county at that time. We rent 8 rooms and the balance got added into the living area. I don't know if our lives are exactly what I envisioned in the beginning, but life has been good. We rank well with guest reviews in what has become a town of large hotels.

Part of your team being a handyman is good, that's always been my job with the business, remember it is not always the total income, but how much you keep when the bills are paid that counts, just a suggestion from an old person, work for happiness, not dollars.

 

gillumhouse's picture
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I started from scratch and did Kelly Services to supplement for a while and Himself would put what I prepared into the oven and serve breakfast (left everthing ready except the bake the entree). Now I am on my own and work for the City part-time to supplement. I have been doing my 3 rooms since 1996.

IF you like mountains, I know of a B & B in a small town near ski resorts that also has a restaurant - it is a 3-season area, the 4th season is mud perhaps - near 2 State Parks and 2 ski areas. Great town (not mine) of Davis, WV.  Davis & Thomas are next to each other  and are sort of considered an area with funky shops, a music venue, and an art gallery or two. It is 8 rooms run by a solo innkeeper.

gillumhouse's picture
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AND be certain that where you buy is where YOU WANT to live. Do not go somewhere just because there is s B & B that is afordable or you like the house. You will be living there 365 so you hd best like the people, the area, the weather there. I knew in general WHERE I wanted to live and truly lucked out with the city (very small) where the house we bought was. 

I checked out the area for what would bring guests for whst I wanted to do and then we went house hunting. I did find my piece of Heaven.

Morticia's picture
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It depends on where you live. Not a helpful answer, I know.

$90k, as a deposit, won't buy much house and certainly won't leave you with anything for repairs. That's about what we had in reserve after we put down a much larger deposit. 

It's tough, but not unheard of, to raid your retirement plan to buy a property. Essentially what you are doing is transferring your investment from the retirement account to the business. It has to be done properly so you don't get hit with penalties and taxes.

In order to be profitable, you'll need more than 6 rooms so you can host large enough retreats. You can be profitable with fewer rooms if you're not doing groups.

Are you planning to open in an area with a dense enough population to support your plan? I see people willing to drive 2-3 hours for a retreat, but not necessarily flying to one. At least not until you've got a rep for saving relationships.

It's a tough decision. Good luck.

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02/21/2019

Thank you for taking time to respond. It means a lot to a newcomer. I agree to the more than 6 rooms because I do want to have some groups. We haven't decided where yet. We live in Colorado, but want to move to the East Coast. Homes are high here and we can get more home in other states. We would like to live in a small town, but not too far from a bigger city and would like some land to be able to have weddings and to expand if we wanted to. 

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