Buying An Inn Question

[GeorgiaGirl]

I'm curious..... if I found an Inn for sale that's just under 1.5 Million how would I be able to go about buying it? I'm wondering in todays market how much would the typical lender require down, etc. I know realistically I am not going to be able to buy it, but it's so nice and sitting in the back of my mind!

 

[wendydk]

Catlady speaks the truth about B&B mortgaging. But an Inn producing a big enough profit would certainly be able to find commercial financing somewhere, but not for anything less than 20-25% down.....and from what I've heard, commercial financing is very expensive. Many sellers offer financing assistance that might better enable a buyer to get a smaller first mortgage.

 

[EmptyNest]

Hey there are many out there under a million...just maybe not in places you want to be:-( How about Michigan? Someone here has a deal for you.
Have the cash downpayment ( I suspect these days it would be at least 25%) and then TRY and find a lender who will give you a loan.
Sorry but that is the way it is right now! I think I told someone here the other day, a friend's realtor told him that the minute you mention B & B mortgage, they push you out the door.

 

[JBloggs]

Unless the numbers can prove the business - it would take a decent down payment, 40% as equity in the home itself.
Here is something most do not think about when buying a BnB. If you buy a BnB and need financing, take into account you are LEAVING your current profession - so you are high risk to any bank. You need a hefty down payment and proof of numbers. Even then, the numbers might drop drastically since the old owners are no longer operating the business and have lost a customer base, or the new owners don't have a clue.
It happens...all the time.

 

[wendydk]

As a personal note: I DO love Innkeeping, and have experience in both the Inn and the hotel industry, and no matter how great a deal it was, where it is, or how much money it makes, I would not undertake a 1.5 million dollar Inn.
NEVER.

 

[GeorgiaGirl]

Thanks guys! Now since I know I couldn't even afford a 10% down payment on this property I can quit dreaming so much of it! LOL! If anyone was wondering, it's Timbercliffe in Camden, ME.

 

[Penelope]

"Looking" is good.
I "look" at inns that are totally out of my price range all the time. But, in reality, between this "southern facing economy" and the season of my life, price and size really do matter.
I think those $1 million+ b&bs out there are gorgeous, but, imo, the personal touch is missing. I think there will probably be a group of investors who will get together and buy the place and let one or two of them run it while the ones who don't run it still get to have some say in policies... sounds familiar to one of our forum members.
However, the 3-7 or even 8 room b&bs are usually dripping with charm and personality becuase the owners had the TIME to spend on it! The marketing alone for a 14 room B&B is enough to make it so that a housekeeper (or 3) needs to be hired. Not to mention: servers, outdoor maintenance, laundry people, assistants... it becomes more than just a couple running it; it's a work force. Trust me.

 

[JBloggs]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

 

[JBloggs]

"Looking" is good.
I "look" at inns that are totally out of my price range all the time. But, in reality, between this "southern facing economy" and the season of my life, price and size really do matter.
I think those $1 million+ b&bs out there are gorgeous, but, imo, the personal touch is missing. I think there will probably be a group of investors who will get together and buy the place and let one or two of them run it while the ones who don't run it still get to have some say in policies... sounds familiar to one of our forum members.
However, the 3-7 or even 8 room b&bs are usually dripping with charm and personality becuase the owners had the TIME to spend on it! The marketing alone for a 14 room B&B is enough to make it so that a housekeeper (or 3) needs to be hired. Not to mention: servers, outdoor maintenance, laundry people, assistants... it becomes more than just a couple running it; it's a work force. Trust me..

There are plenty of $1.5-2.5 mil inns with only 3 or 4 guest rooms and owners live on site. NC & ME & VA are two states with plenty for sale right now in that bracket.

 

[GeorgiaGirl]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??

 

[EmptyNest]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

ME, VA & NC have always been states with lots on B & B's / Inns. There is turnover all the time. Since most folks know it can take several years for a place to sell, and given the state of the economy right now....better to just get it on the market and start the process. Hope for the best.
Could be that many have just reached the point where it is time for them to retire, or move on to other things.
Or, maybe some find that it isn't the way they thought it would be and now want out.
And some are being listed for way more than they are worth as a starting point. Knowing they will probably have to negotiate. For many this is their retirement nest egg.

 

[The Farmers Daughter]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??

I lived in Maine at one time and my sister still lives there. Your tourist market is seasonal for one thing. UNLESS YOU ARE IN A SKI RESORT AREA. Summer and Autumn visitors are your bread and butter. Once that is over and the winter hits (Maine winters are wicked cold and rough) you will have no business unless you are in the resort areas or have your own niche that can drive a certain customer to your door like Dog sled adventures or Snow mobile outings. In this economy that is not going to keep you afloat.
From personal experience, I don't advise investing in anything you need to feed/house/groom unless you are a diehard dogsledder.

 

[The Tipsy Butler]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper

 

[The Farmers Daughter]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper

Oh your place is lovely! How far are you from Waldoboro? Moodys Diner was a favorite of mine back in the day.!

 

[Breakfast Diva]

Have you checked out financing through companies who specialize in B&Bs? Check out this article & their company.
Aspiring Innkeepers...It's a Great Time to Buy
As stated in another post, the type of financing happening these days are for inns that show profits. The numbers have to be there.

 

[The Tipsy Butler]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper

Oh your place is lovely! How far are you from Waldoboro? Moodys Diner was a favorite of mine back in the day.!
.

We're very very close. about 10 minutes away.

 

[GeorgiaGirl]

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason..

GG if you keep an eye on the inns for sale you would have seen a giant influx of of inns for sale in Maine in that price range. There is a reason.

Yeah, I noticed there's a lot of Inn's for sale in Maine. What are thoughts about why so many are for sale in Maine??
.

We've been hard hit with the economy - like everywhere else - but most of us will be going into the winter without the usual meagre reserves that we normally do. To give you some idea, when we purchased Tipsy there were two other B&Bs on the market. They are still on the market today. Tipsy was priced well and sold. The others are now where Tipsy was but while they would have sold at that price back then, they are now STILL too expensive because of the shift in the economy and real estate prices. Just my opinion of course.
It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper
.

It's interesting that you're even considering a B&B. You - because of this forum - have a better idea than most of the reality of being an innkeeper

I guess it's like having a baby.....all the pain and stuff you go through and then you wind up still wanting to do it again! (in Michelle & Jim Bob Duggar's case they are on number 19.....!)

 

[GeorgiaGirl]

Hey everyone....I just got word that I have a second showing set up for this weekend! Of course, this happens on a HOLIDAY weekend where I'm sold out four nights in a row.

whoo hoo!!! I think having the Inn full for 4 nights in a row looks good to the buyer! Fingers Crossed!!!

 

[Breakfast Diva]

That's great!!!!!!! I've got my fingers crossed for you! It's a good thing to be full when they visit. They see you're popular!
Best of luck!

 

[wendydk]

Hey everyone....I just got word that I now have two showings set up for this weekend (one on Saturday and one on Monday)! Of course, this happens on a HOLIDAY weekend where I'm sold out four nights in a row.