How long does it take to sell a B&B in this economy?

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crusty

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I am assuming that thngs have improved from the zero rate of transactions (in every business) back a few years ago. I also assume that while financing has loosed up a bit that seller financing and lease options are still alive and doing well.
 
in the UK? average 2-3 years know very competatively priced properties been on the market 5 years. The banks are asking for 40% deposit minimum which with property prices round here thats about 250 thousand pounds or half a million US - there arn't a lot of people with that sort of cash that want to buy a BB.
 
in the UK? average 2-3 years know very competatively priced properties been on the market 5 years. The banks are asking for 40% deposit minimum which with property prices round here thats about 250 thousand pounds or half a million US - there arn't a lot of people with that sort of cash that want to buy a BB..
Wow. We have a large self-storage property. That market has picked up considerably in the past couple of years. The SBA now accepts self-storage properties, which has helped in many cases. In order to do a 1031 exchange we have to identify the new property within 45 days from the close of the sale property and then we have 180 days to close the new property.
I guess we can get the current one under contract if we have identified the new one and have a good idea of price. We would have to make the sale and the purchase contingent on financng of course and if it was SBA that can take 6 months. Could never do that in the past but so long as the seller is patient we could get that done.
I have to see if there are a variety of 24+ room proerties that might make sense. That seems larger than the average Inn.
BTW you have a lovely looking property.
 
in the UK? average 2-3 years know very competatively priced properties been on the market 5 years. The banks are asking for 40% deposit minimum which with property prices round here thats about 250 thousand pounds or half a million US - there arn't a lot of people with that sort of cash that want to buy a BB..
Wow. We have a large self-storage property. That market has picked up considerably in the past couple of years. The SBA now accepts self-storage properties, which has helped in many cases. In order to do a 1031 exchange we have to identify the new property within 45 days from the close of the sale property and then we have 180 days to close the new property.
I guess we can get the current one under contract if we have identified the new one and have a good idea of price. We would have to make the sale and the purchase contingent on financng of course and if it was SBA that can take 6 months. Could never do that in the past but so long as the seller is patient we could get that done.
I have to see if there are a variety of 24+ room proerties that might make sense. That seems larger than the average Inn.
BTW you have a lovely looking property.
.
Me? looks great and its getting there inside but has needed a fortune spending on it as PO's let it run into the ground through lack of any sort of marketing to bring in business. After I get the remodel of the top landing done in Feb i'll pretty much have broken the back of the majour works and am already looking at expansion plans! mind you at least the property we are looking at is virtually identicle so helps with cost projections!
 
in the UK? average 2-3 years know very competatively priced properties been on the market 5 years. The banks are asking for 40% deposit minimum which with property prices round here thats about 250 thousand pounds or half a million US - there arn't a lot of people with that sort of cash that want to buy a BB..
Wow. We have a large self-storage property. That market has picked up considerably in the past couple of years. The SBA now accepts self-storage properties, which has helped in many cases. In order to do a 1031 exchange we have to identify the new property within 45 days from the close of the sale property and then we have 180 days to close the new property.
I guess we can get the current one under contract if we have identified the new one and have a good idea of price. We would have to make the sale and the purchase contingent on financng of course and if it was SBA that can take 6 months. Could never do that in the past but so long as the seller is patient we could get that done.
I have to see if there are a variety of 24+ room proerties that might make sense. That seems larger than the average Inn.
BTW you have a lovely looking property.
.
shame you arn't in the UK there is a really nice hotel up for sale just round the corner from us - owner grappling with a court case and needs the money for legal fees -
http://www.christie.com/news/2012/08/07/christie_co_markets_the_balmoral_hotel_in_harrogate_for_sale_16456
excellent location, fitted out nice, nice restaurant and parking - could just walk right in and run it.
http://www.tripadvisor.co.uk/Hotel_Review-g187046-d253536-Reviews-The_Balmoral_Hotel-Harrogate_North_Yorkshire_England.html
 
5 years since I tried to start working with the bank... One year since I gave them my property back and they still have not foreclosed ... An agent mentioned he had just sold a B&B that had been empty for 8 years.
 
You kidding???Just ask some here who have had their place for sale for years! I have friends who have beautiful places...been on the market for 7-8 years!!!!!! but did have one friend that sold in one year. No one is giving any money away. You have to have alot of$$$$$ if you:expect to buy something.
 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?
 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?.
You seem to know a lot about it, so why are you asking us? You need to contact a B&B Broker and deal with them, they can answer your questions and get paid for it.
 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?.
You seem to know a lot about it, so why are you asking us? You need to contact a B&B Broker and deal with them, they can answer your questions and get paid for it.
.
My background is in the securties industry and while I am familiar with certain real estate markets this one is new to me and I wanted to find out whatever I can first hand, if possible. Brokers can be helpful but they do have an axe to grind and are not necessarily the most objective. Thanks for your input.
 
Excuse spelling iPad / user issues ....
Interest rates have dropped but loans are harder to come by,many have diminished credit scores. In addition, a B&B generally requires commercial loans and or - as someone mentioned, big equity. If its not a B&B yet ... And you get residential financing with the intention to run it as a business and knowingly hide this information, you loan can be called or ou can be made to switch to commercial.
And of course with commercial they are looking at feasibility so besides higher interest they are not easier to come by and B&Bs are not exactly cash cows.
The fact that inns may have been on sale for years and your comment about bpossibly being unrealistic with price, us innkeepers invest a huge amount into our properties upfront o meet local, state, health and safety requirents etc, so yes we may be over valuing our property but many cannot just lose 100k ...in my case I just gave it back to the bank....
 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?.
crusty said:
Is there a property size that is selling better than others in this market?
You really need to get some professional help with this. I've seen places languish for years only to have the place next door sell in 3 months. Some places never even get on the market before they're sold. And these are all 'lifestyle' businesses. I don't think many of us have over 10 rooms. A couple of us, but not many.
Figure out where you want to plunk down your money and get a broker who specializes in that area. Ask them what size properties sell best. Figure out how much you want to work at the biz (of you don't want to work at the biz do not buy a small property, buy big) and then adjust your target area. If you think the broker has an ax to grind ask a bunch of brokers. Then cull the info until you get what you want.
It sounds like you are looking for an investment property, not a 'job'. So, don't bother with a small B&B, buy a boutique hotel. You'll want 15 rooms or more with rates over $250/night and 60-70% occupancy in a prime location.
 
Of course the self storage biz has picked up, everyone losing their homes or downsizing... They need place for their stuff, I know, I was one of them....
 
Excuse spelling iPad / user issues ....
Interest rates have dropped but loans are harder to come by,many have diminished credit scores. In addition, a B&B generally requires commercial loans and or - as someone mentioned, big equity. If its not a B&B yet ... And you get residential financing with the intention to run it as a business and knowingly hide this information, you loan can be called or ou can be made to switch to commercial.
And of course with commercial they are looking at feasibility so besides higher interest they are not easier to come by and B&Bs are not exactly cash cows.
The fact that inns may have been on sale for years and your comment about bpossibly being unrealistic with price, us innkeepers invest a huge amount into our properties upfront o meet local, state, health and safety requirents etc, so yes we may be over valuing our property but many cannot just lose 100k ...in my case I just gave it back to the bank.....
You will never get a residential loan for a 25 room property
poke.gif

 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?.
crusty said:
Is there a property size that is selling better than others in this market?
You really need to get some professional help with this. I've seen places languish for years only to have the place next door sell in 3 months. Some places never even get on the market before they're sold. And these are all 'lifestyle' businesses. I don't think many of us have over 10 rooms. A couple of us, but not many.
Figure out where you want to plunk down your money and get a broker who specializes in that area. Ask them what size properties sell best. Figure out how much you want to work at the biz (of you don't want to work at the biz do not buy a small property, buy big) and then adjust your target area. If you think the broker has an ax to grind ask a bunch of brokers. Then cull the info until you get what you want.
It sounds like you are looking for an investment property, not a 'job'. So, don't bother with a small B&B, buy a boutique hotel. You'll want 15 rooms or more with rates over $250/night and 60-70% occupancy in a prime location.
.
You'll want 15 rooms or more with rates over $250/night and 60-70% occupancy in a prime location.
[/quote]
This is helpful info. We are looking at two very different properties, (in the same town). Two are a 6 room and one a 15 room. I've been less inclinded to seriously consider the 15 room one because I was afraid it would be 'TONS' more work. Yes, we'd hire help for a property that large, but isn't that more work too? and wouldn't you be even more tied down?
Just looking at whats out there, gotta sell ours first.
 
If something is for sale for 7-8 years it raises the question as to whether or not the seller is realistic with respect to price. If an Inn is "financially viable" there are well established metrics used to establish price (usually determined by the lender underwriting guidelines). From what I have seen, these are generally larger, multi-million dollar facilities.
So-called lifestyle properties are, of course, a differnt breed and I would guess that they are much harder to sell because there are no metrics for lifestyle. Basically, buyers of lifestyle properties are buying themselves a job.
According to my banker, Inns that can support bank-style financing seem to have loan terms with an LTV of 60%-70%. That means a pretty sizable chunk of equity.
Is there a property size that is selling better than others in this market?.
crusty said:
Is there a property size that is selling better than others in this market?
You really need to get some professional help with this. I've seen places languish for years only to have the place next door sell in 3 months. Some places never even get on the market before they're sold. And these are all 'lifestyle' businesses. I don't think many of us have over 10 rooms. A couple of us, but not many.
Figure out where you want to plunk down your money and get a broker who specializes in that area. Ask them what size properties sell best. Figure out how much you want to work at the biz (of you don't want to work at the biz do not buy a small property, buy big) and then adjust your target area. If you think the broker has an ax to grind ask a bunch of brokers. Then cull the info until you get what you want.
It sounds like you are looking for an investment property, not a 'job'. So, don't bother with a small B&B, buy a boutique hotel. You'll want 15 rooms or more with rates over $250/night and 60-70% occupancy in a prime location.
.
You'll want 15 rooms or more with rates over $250/night and 60-70% occupancy in a prime location.
This is helpful info. We are looking at two very different properties, (in the same town). Two are a 6 room and one a 15 room. I've been less inclinded to seriously consider the 15 room one because I was afraid it would be 'TONS' more work. Yes, we'd hire help for a property that large, but isn't that more work too? and wouldn't you be even more tied down?
Just looking at whats out there, gotta sell ours first.
.

[/QUOTE]
depends on if you can get reliable staff its that simple.
 
This is helpful info. We are looking at two very different properties, (in the same town). Two are a 6 room and one a 15 room. I've been less inclinded to seriously consider the 15 room one because I was afraid it would be 'TONS' more work. Yes, we'd hire help for a property that large, but isn't that more work too? and wouldn't you be even more tied down?
It all depends on the occupancy rate. In general, if you have the 6 room b&b, you will be doing most things yourself. You won't be able to afford to pay for full time staff. You'll be really tied down. The 15 room b&b you'll have the headaches of staff, but you'll do less physical grunt work. With a 15 room property it will be most important to find an assistant that can run things in your absence.
 
Correct me if I am wrong but don't you get better pricing per room om larger projects? We do in the apartment business.
 
I am also a self storage user for the purpose of downsizing. Through the years, storage companies has been making a buzz in the economy. I've been renting a self storage in edmonton and the service was great.
 
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