Advice re leasing out B&B

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bjolish

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Hi Everyone,

I'm looking to lease out a B&B property; in other words, I own the land, and want to find someone to run a B&B on it in exchange for rent. Below is the listing I've been posting on sites like B&B.com. Any advice for me?


I’ve just bought a B&B property in the redwood forests of Western Sonoma County, California. It was successfully run as the Huckleberry Springs B&B from 1985 until 1997, when it was sold to someone who wanted to divide up the land for timeshares. I’m buying the property out of foreclosure, and am looking for someone with the energy and experience to bring the B&B business back to life.
Here’s the property background:
Location:
Western Sonoma County, about a mile from the Bohemian Highway, between Occidental and Mote Rio. Across the valley from the property is the Bohemian Grove. This is in the Sonoma wine country, and also within 5 minutes of the Russian River recreation area. The Pacific Coast is 15 minutes away.
Land:
The property is very private; it has 57 acres of redwood and oak forest, year-round springs, and meadows.
Structures:
There is an 1800 square foot main lodge, with an innkeeper’s unit on a private second floor. The lodge contains:
--a commercial kitchen (commercial range, fire suppression hood, etc.).
--dining room for six or seven tables.
--large, high-ceilinged great room with wood burning stove and forest views.
--1,000 square feet of decks.
--an office.
Outside the lodge is an in-ground 12,000 gallon pool, and a separate, private in-ground hot tub.
Guest accommodations are in four cottages, each with their own personality (e.g., Cherry Barrel, Gate, Spring and Orchard). The county will permit adding two more cottages. There is also a separate cedar message studio.
The property also has a deer-fenced orchard, raised bed garden, greenhouse, and large chicken coop. There are canoes on site, ready to launch from Monte Rio beach minutes away.
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
For pictures, see
http://www.sonomacountyretreat.info/
Fore reviews of the Huckleberry Springs B&B, see
http://www.tripadvisor.com/Hotel_Review-g32733-d252289-Reviews-Huckleberry_Springs-Monte_Rio_Sonoma_County_California.html
I’m a real estate developer in San Francisco, but do not want to run a B&B myself. (I would be using another house on the property as a vacation home.)
Please contact me with your ideas. I have good friends running a B&B not far away, so they would be able to consult with us on market conditions, etc.
If you can put together a business plan that makes sense, we can work out a lease.
Please contact me at bjolish@yahoo.com to discuss this further.
 

egoodell

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We had a friend who did cottages for an upscale B&B. Cleaning them was a nightmare.
RIki
 

Copperhead

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What a beautiful piece of property and I can see potential there.
You do need to provide more details on the cottages, including # of bed/bath rooms, are they furnished, all properties in good condition? Who would be responsible for repairs? For inqiries have full facts sheets ready to send out including distances between each cottage and the lodge, innkeeper's quarters info., of the 57 acres how much they would be having to maintain?
You may also need to consider that even though this property has a past it is many moons ago and anyone taking on this venture will need time to build up their marketing before it will take off. You may consider a lease with a lower rent in the begining allowing for permitting, some business marketing & make over time. I know if I were interested, I would have a back out clause if I was unable to retain all needed permits & licenses.
This would need to be an upscale place to make it on 4 cottages! Just sayin'!
 

Breakfast Diva

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bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses.
 

egoodell

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bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses..
Breakfast Diva said:
bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses.
This is very true. We had a top B&B sell here and when the new owners took over there was all kinds of problems. And it was properly licensed and operating. The change of hands brought up all kinds of new issues that the buyer was not aware would come up and the seller didn't know about. The inn had been owned by the former owners for over 10 years and they issued all kinds of new hoops that applied as soon as they new folks took over and I understand it was some headache and I don't know if it cost them $$ along with it.
So I would be concerned that the licenses were from 1985....I would wonder what's come up since then that could now affect the property.
When you say "it should be possible to renew them" is that what you were told by the County or just your figuring? Don't forget they do not regulate by common sense. And if they are telling you "it SHOULD be renewable" I would be looking for confirmation in writing. Imagine getting someone to lease it and when they go it to renew are told "no".
RIki
 

Breakfast Diva

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bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses..
Breakfast Diva said:
bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses.
This is very true. We had a top B&B sell here and when the new owners took over there was all kinds of problems. And it was properly licensed and operating. The change of hands brought up all kinds of new issues that the buyer was not aware would come up and the seller didn't know about. The inn had been owned by the former owners for over 10 years and they issued all kinds of new hoops that applied as soon as they new folks took over and I understand it was some headache and I don't know if it cost them $$ along with it.
So I would be concerned that the licenses were from 1985....I would wonder what's come up since then that could now affect the property.
When you say "it should be possible to renew them" is that what you were told by the County or just your figuring? Don't forget they do not regulate by common sense. And if they are telling you "it SHOULD be renewable" I would be looking for confirmation in writing. Imagine getting someone to lease it and when they go it to renew are told "no".
RIki
.
The day we were going to put in a bid on the property I described above, I went to the county office about the permits and licenses. We had been told by the real estate agent that there would be no problem. Yeah, right!!!! I'm sure the agent wasn't trying to swindle us, it's just that it wasn't an agent who specialized in the sales of b&bs and didn't know better.
Buyer beware!
 

toddburme

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We bought a B&B that had gone through foreclosure. The city, county stuff is needed and in our case, they were glad we were coming back so it went fine. The other nice thing is that since this was a B&B, hopefully it has all of the amenities that people want. If not, now is the time to add them.
One idea is to make it a B&B then lease it out. I am assuming that right now it is vacant and not ready to go? Website with advertising in place sort of a turnkey for when you find the right couple. You need all of the furnishings. We bought a pickup and cruised craigslist. The antiques market is coming back but it is still pretty cheap compared to the early 2000's.
The other idea is you get an experienced couple to do all of that and run it but how do you pay them for getting it up and going? Who owns the stuff? Who owns the website? If they leave do they clean out the towels, soap etc and just go?
Not being critical since if I can do it then anyone can. We just made a partnership so the long term goals of both parties are then aligned.
 

bjolish

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bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses..
Breakfast Diva said:
bjolish said:
All the conditional use permits were issued in 1985, so Sonoma County is fine with the usage. All the other licenses were also issued in 1985, and renewed every year until 2009 or 2010. It should be possible to revive them. (The ABC license may be the biggest challenge.)
Be VERY careful about the conditional use permits and licenses. One property we were attempting to purchase had been "abandoned" by the owner (not run as a b&b for more than a year) and all the conditional use permits and licenses were revoked and the property lost all the grandfathering. The zoning then changed in the years after the original permits were issued, and the property could never be used commercially again. Not even for a vacation rental.
Just a word of caution to not assume ANYTHING when it comes to permits and licenses.
This is very true. We had a top B&B sell here and when the new owners took over there was all kinds of problems. And it was properly licensed and operating. The change of hands brought up all kinds of new issues that the buyer was not aware would come up and the seller didn't know about. The inn had been owned by the former owners for over 10 years and they issued all kinds of new hoops that applied as soon as they new folks took over and I understand it was some headache and I don't know if it cost them $$ along with it.
So I would be concerned that the licenses were from 1985....I would wonder what's come up since then that could now affect the property.
When you say "it should be possible to renew them" is that what you were told by the County or just your figuring? Don't forget they do not regulate by common sense. And if they are telling you "it SHOULD be renewable" I would be looking for confirmation in writing. Imagine getting someone to lease it and when they go it to renew are told "no".
RIki
.
We did talk to the County officials re the conditional use, and they said it was still good. Of course, this is something you would want to get in writing before committing to anything...
 

Samster

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Wow, that was probably a steal for there, wasn't it? We were just in Sonoma last Fall and stayed in Forestville at a B&B. You definitely need a couple to run this with all the property and amenities and you need to advertise for folks that are experienced since you're re-vitalizing it. Make sure that prospective guests are well informed about the drive up the mountain! Best of luck!
 

Tom

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What a beautiful piece of property and I can see potential there.
You do need to provide more details on the cottages, including # of bed/bath rooms, are they furnished, all properties in good condition? Who would be responsible for repairs? For inqiries have full facts sheets ready to send out including distances between each cottage and the lodge, innkeeper's quarters info., of the 57 acres how much they would be having to maintain?
You may also need to consider that even though this property has a past it is many moons ago and anyone taking on this venture will need time to build up their marketing before it will take off. You may consider a lease with a lower rent in the begining allowing for permitting, some business marketing & make over time. I know if I were interested, I would have a back out clause if I was unable to retain all needed permits & licenses.
This would need to be an upscale place to make it on 4 cottages! Just sayin'!.
Indeed. A reasonable financial objective may be to have the 4 cottages sort-of, almost pay for the cost of the operators and upkeep. Getting the property at a discount is good; having it kept in good condition at a discount is good. The B&B may add a little cachet, maybe. Can't see it making a net profit at that scale of operation with 100% hired managers.
 
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