Another Inn for sale in VA

[JBloggs]

Why Start from Scratch When You Can Start with Profits?
Is this the place right next to the train tracks? Just wondering about their "Profits" on this inn, and why it has come up for sale again. This was posted on FB today. I am not questioning what they say is their revenue, but wondering about it.
I am really thinking we should just close up shop, we are nowhere near this profitable and I work like crazy in marketing this place...someone would be STUPID to buy our place if this place makes this much $.

 

[Generic]

$175K for 5 rooms or $35K per room. There are 365.25 days in a year but 55% occupancy gives you 200 days of occupancy a year. That gives you an ADR of $175 a night. So go to their website and look at their rates and then tell me that the numbers are kosher.

 

[Madeleine]

Wow! 5 rooms and that's the gross? Holy cow. And they're selling that low?
That's way more than the 2 places here are making and they're on the market for $200-$400k more.
They may really want out.
At 66% occ they must be busy year round.
Sorry, I know that's not helping you but it's pretty stunning pricing.

 

[Breakfast Diva]

Wow! 5 rooms and that's the gross? Holy cow. And they're selling that low?
That's way more than the 2 places here are making and they're on the market for $200-$400k more.
They may really want out.
At 66% occ they must be busy year round.
Sorry, I know that's not helping you but it's pretty stunning pricing..

At 66% occ they must be busy year round.

they state 55% occupancy

 

[Breakfast Diva]

Hmmm...unless they are selling a lot of add-ons, the numbers don't really work (occupancy & gross revenue)
They would have to do a lot of weddings to make up that difference

 

[Madeleine]

Wow! 5 rooms and that's the gross? Holy cow. And they're selling that low?
That's way more than the 2 places here are making and they're on the market for $200-$400k more.
They may really want out.
At 66% occ they must be busy year round.
Sorry, I know that's not helping you but it's pretty stunning pricing..

At 66% occ they must be busy year round.

they state 55% occupancy
.

Fat fingers. Tiny print. Mea culpa.

 

[Breakfast Diva]

So, when listing a property, does the 'gross revenue' include the taxes collected?

 

[Madeleine]

Hmmm...unless they are selling a lot of add-ons, the numbers don't really work (occupancy & gross revenue)
They would have to do a lot of weddings to make up that difference.

I think it comes out almost exactly-
If we consider the 55% occ comes down to 200 100% occ nights at 165/room (or there about) it's pretty close
200 x 5 x 165 = 165000.

 

[Madeleine]

So, when listing a property, does the 'gross revenue' include the taxes collected?.

It really shouldn't! That's not revenue. Apparently the Po's here included the lodging tax on their tax return. We actually found that mistake and they had to refile their taxes. Or so they said. Maybe they gave us fake returns. But we found that anyway and deducted the tax amount before making our offer.

 

[Breakfast Diva]

So, when listing a property, does the 'gross revenue' include the taxes collected?.

It really shouldn't! That's not revenue. Apparently the Po's here included the lodging tax on their tax return. We actually found that mistake and they had to refile their taxes. Or so they said. Maybe they gave us fake returns. But we found that anyway and deducted the tax amount before making our offer.
.

I bet a lot of these listed properties are including the taxes!

 

[Breakfast Diva]

All in all, it looks like a very good investment.

 

[EmptyNest]

It was listed much higher originally and with a b&b realtor. looks like they are trying themselves now. This place has been on the market for years! I think they listed it the year after they bought it.
The place is nice but not at that price and not if you want to live with a train practically at your front door! And I am not joking either. I got no sleep here at all.
the realty site says gross revenue for12 -$132k

 

[JBloggs]

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course.

 

[OnTheShore]

Start with Profit? Even if it is 55+% occupancy and $175+K revenue, that still doesn't tell you anything about profit -- what are their costs???
In any case, the numbers do work IF they are getting their full room rate and selling enough of their packages and extras. If indeed they are selling 1000 room nights at $165 and a third of those spring for a $30 add-on, you get $175K (without taxes).

 

[Como Depot]

Not knowing the area how much would a non B&B house like that go for?
They must be booked solid during their main seasons.

 

[Breakfast Diva]

Start with Profit? Even if it is 55+% occupancy and $175+K revenue, that still doesn't tell you anything about profit -- what are their costs???
In any case, the numbers do work IF they are getting their full room rate and selling enough of their packages and extras. If indeed they are selling 1000 room nights at $165 and a third of those spring for a $30 add-on, you get $175K (without taxes)..

Start with Profit? Even if it is 55+% occupancy and $175+K revenue, that still doesn't tell you anything about profit -- what are their costs???
In any case, the numbers do work IF they are getting their full room rate and selling enough of their packages and extras. If indeed they are selling 1000 room nights at $165 and a third of those spring for a $30 add-on, you get $175K (without taxes).

I saw one TA review that stated they stayed there with a Group on deal. Don't know how many they sold, but that drops your ADA and revpar right there.

 

[Breakfast Diva]

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course..

I read their TA reviews (they're very good!) and it doesn't seem to affect most of their guests. They provide ear plugs and it seems most people consider it a nostalgic experience.

 

[muirford]

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course..

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course.

If they did a groupon/social living deal - they may have put that lump sum check in their revenues. Wouldn't be good for forecasting your own revenues, though. Just looking now, in October, they are not at 100% occupancy and I would expect this to be a prime month.

 

[JBloggs]

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course..

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course.

If they did a groupon/social living deal - they may have put that lump sum check in their revenues. Wouldn't be good for forecasting your own revenues, though. Just looking now, in October, they are not at 100% occupancy and I would expect this to be a prime month.
.

$132k here http://bbteam.com/listing/hummingbird-inn-bed-breakfast-for-sale/
43k is a huge difference in gross revenues. T he train thing is why I was wondering how they could sell so many rooms. The place is lovely, of course.

If they did a groupon/social living deal - they may have put that lump sum check in their revenues. Wouldn't be good for forecasting your own revenues, though. Just looking now, in October, they are not at 100% occupancy and I would expect this to be a prime month.

Yes it is all very confusing isn't it. If they come here or the B&B Team comes here and sorts it out, that is okay too.
I know THIS B&B I am sitting in now have artificially enhanced revenue numbers. It was a B&B broker represented sale, and they expressed that they are not responsible for the figures, only selling the place. Which I found to be a terrific reason to not use a B&B broker for any future business.
And the same reason I tell aspiring innkeepers "Do not trust innkeepers numbers...get proof or they can fudge them to sell the inn" I am not saying this B&B is fudging anything, at all, just saying sometimes it happens, and better to be transparent on the sale info, get everything you can.
I know where our numbers are, and I know the amount of marketing I do, and we are not at $175,000 not by a long chalk. (For a similar sized inn in a similar set up and price range - if we were I would hire someone as the innkeeper here and retain the inn not sell it)

 

[SecondAct]

This place HAS been for sale for a long time. Previous owners wrote an interesting book about innkeeping after their experience with it (drawing a blank on the person and book title at the moment). If you took this property and plopped it down somewhere more appealing, it would be fabulous, but if I paid their rates to stay and drove up to find its location, I would be furious. As EmptyNest says, the train runs practically right by the front door. I'm really shocked at the reviews and can only guess that the shear hospitality of the innkeepers is what is driving the positive comments. I'm even more shocked that they're bringing in that much money on it.