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wendydk

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We are trying to think of inexpensive ways to open up a fourth guest room (the one we currently sleep in). This would give us 2PB and 2SB. I would like to avoid spending money on construction, as obtaining financing is almost impossible (Might be easier with four rooms bringing in revenues). I'm considering buying a travel trailer to live in during high seasons. Now seems to be the time to buy, we found a very nice 32' for $6,500.00 and our zoning is agreeable. Maybe just set up behind the house and put a privacy fence between. Thoughts???
What is the oddest "Innkeepers Quarters" that you've ever heard of?
 

gillumhouse

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Personally I do not think this would make the inn more appealing for a sale. The thing that - to me - makes innkeeping a viable business is the fact that I have to live somewhere and the business pays the expenses of the house - or most of. Is there some way you could use that $6500 to make a bathroom for the owners quarters? THAT is the drawback I would have with your place - having to share MY bathroom with guests. I live there! I do not want to have to feel like a visitor anywhere in my house. Even with a privacy fence, I do not think it would do much for the esthetics of your inn.
That is just my opinion. BTW, I spent the first 3 months of my first marriage in a 17' camper and my son & his wife spent most of their first 7 years of marriage in a 30' camper because he was on construction so I know what it is like. It is doable, but not comfortable for more than 1 person.
 

wendydk

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Personally I do not think this would make the inn more appealing for a sale. The thing that - to me - makes innkeeping a viable business is the fact that I have to live somewhere and the business pays the expenses of the house - or most of. Is there some way you could use that $6500 to make a bathroom for the owners quarters? THAT is the drawback I would have with your place - having to share MY bathroom with guests. I live there! I do not want to have to feel like a visitor anywhere in my house. Even with a privacy fence, I do not think it would do much for the esthetics of your inn.
That is just my opinion. BTW, I spent the first 3 months of my first marriage in a 17' camper and my son & his wife spent most of their first 7 years of marriage in a 30' camper because he was on construction so I know what it is like. It is doable, but not comfortable for more than 1 person..
Yes, I guess we could break up the very large downstairs guestroom bathroom into two small bathrooms...hmmmm.
Then our living room off the kitchen would have to become a combination bedroom and living room; at 14x14 that would be a pretty tight squeeze with my desk, computer, TV, sofa and a bed. It's already a tight squeeze in there with just living room furniture, and that might be less appealing to a new buyer than what we have now.
One of my concerns is with the well and septic...we did not upgrade it when we added the third bathroom before opening. A fourth bathroom might be more than it can take. The expense of a new well and or septic (and definitely a new hot water heater) would be prohibitive, and with the expense involved, we would be better off just building a little cottage on the property for ourselves with it's own well and septic.
I was just thinking of the cheapest and easiest way to get that fourth room up and producing....whatever we do will have to be bootstrap financing, so we gotta be uber-careful.
The trailer option would be for sleeping only, and maybe a very quick morning shower...we do have the Inn kitchen and the aforementioned living room and office to "live in" all day.
 

Breakfast Diva

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I agree with GH. If I had to live in a travel trailer I would not buy your place. Now if you were able to put a small manufactured home on your property, that would be a huge draw for owners. We live in a 2 bedroom 850 sq ft separate owners quarters and we don't even use the 2nd bedroom (because of the layout) for anything but storage. Having a separate OQ is a major plus. We feel like we have our own space, own kitchen, animals, etc and have our privacy.
Have you looked into a "park model"? These things are really great and you'll probably be able to get financing from the dealer. Or a cabin like the ones Swirt has for guest rooms?
 

EmptyNest

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If you have separate owners quarters, I wouldn't do anything to jeopardize that for future sale. Travel trailer sounds like a bad idea to me. Why not put in a separate cottage if that is allowed / zoning wise. I would think you could rent out a Private cottage much easier and bring in more money with that than trying to find an extra room in the house. Future buyers could then decide if they want to use it as the rental or as their living space.
 

wendydk

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We do NOT have seperate living quarters. We sleep in a bedroom upstairs with other guest rooms, and share our bath with our smallest guest room. I think that is the biggest stumbling block for potential buyers. We do have our own living room off the kitchen...that's it for owners quarters.
When I say bootstrap financing, I mean credit cards.....seperate little cottages or manufactured homes on the property are really not an option finance-wise. You have the purchase price, then the well, septic, electric and everything else that goes with building a new occupied building. This is why we hesitate to build onto the house, although it could be easily done. We could also build a new garage with living space above...again...it's all about money. I could do any one of a million things with money. If we can't find anyone to refinance our current loan, borrowing more is certainly not an option! With the Inn for sale (as either residence or small Inn) I don't want to soak a bunch more money into it.
Guess we'll just soldier along they way we are...neither we nor the guests are inconvenienced...after six years, we're used to what we do. Just looking for a way to open up that fourth room, but still have someplace for us to sleep and shower.
 

seashanty

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without seeing the actual layout and size of rooms .... i agree that you should reconsider .... would you be willing to sleep on a sofa bed? and have your innkeeper living room double as your bedroom? before you say no, my parents slept this way for years when there were seven of us in the home. their bedroom was also our den and, during the day, their bed was a sofa, clothes and personal items were in a closed armoir and bureau. if you can do this, your present bedroom could be that fourth guestroom. tight while the 'bed' is open, but 'cozy' when a couch.
the septic/showering challenges are another issue and that is where i think you should put your money. i don't know how much it would cost you to upgrade your system. but a shower, toilet and 'bar sink' in a little bathroom added on to your 'living room' would be private and make your place more appealing to a buyer in my opinion.
 

Breakfast Diva

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Do you have a different sale price if someone buys it as a home?
 

EmptyNest

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We do NOT have seperate living quarters. We sleep in a bedroom upstairs with other guest rooms, and share our bath with our smallest guest room. I think that is the biggest stumbling block for potential buyers. We do have our own living room off the kitchen...that's it for owners quarters.
When I say bootstrap financing, I mean credit cards.....seperate little cottages or manufactured homes on the property are really not an option finance-wise. You have the purchase price, then the well, septic, electric and everything else that goes with building a new occupied building. This is why we hesitate to build onto the house, although it could be easily done. We could also build a new garage with living space above...again...it's all about money. I could do any one of a million things with money. If we can't find anyone to refinance our current loan, borrowing more is certainly not an option! With the Inn for sale (as either residence or small Inn) I don't want to soak a bunch more money into it.
Guess we'll just soldier along they way we are...neither we nor the guests are inconvenienced...after six years, we're used to what we do. Just looking for a way to open up that fourth room, but still have someplace for us to sleep and shower..
Sorry, but I see this as a huge stumbling block for you all trying to sell as a B & B. You may be better just to try and sell as a private residence as I don't think buyers today will want to put up with what you have. And, chances of getting a mortgage for a home will be much better than for someone wanting to buy a small B & B.
I have talked about this at length with friends of mine. Their place is wonderful, but they don't really have what could be called private owner quarters aside from their own bedroom, a small den for TV, and a bath in the hall. I see this as a big stumbling block for them down the road when they try to sell their VERY SUCCESSFUL business. Because what works for them, will not necessarily appeal to anyone else. We have discussed a variety of options and they know they will have to do something different if it is to sell as a B & B. Otherwise it is a house with a cottage.
 

muirford

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Do you have a different sale price if someone buys it as a home?.
You could sell the home as a home - price driven by real estate value - and the business separately. It wouldn't be the right option for a lot of people, but the seller could even hold the loan for the business while the bank holds the loan for the house as a residence. There are lots of issues to work out, like proper insurance, paperwork, etc. and you would not be first in line to get repaid if the buyer defaulted on the propert. Not everyone would be able to do that financially or emotionally, but it may be an option for some.
 

EmptyNest

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Do you have a different sale price if someone buys it as a home?.
You could sell the home as a home - price driven by real estate value - and the business separately. It wouldn't be the right option for a lot of people, but the seller could even hold the loan for the business while the bank holds the loan for the house as a residence. There are lots of issues to work out, like proper insurance, paperwork, etc. and you would not be first in line to get repaid if the buyer defaulted on the propert. Not everyone would be able to do that financially or emotionally, but it may be an option for some.
.
Oh my, ....a friend just had a bad experience taking back a second mortgage for an inn. Theinn filed Chapter 11 Bankruptcy and guess who got screwed!!! I can't believe she couldn't have covered herself and prevented this from happening, but the second mortgage she covered and she got NOTHING!!! Now she is out big bucks and her own home went into foreclosure and auctioned off. So sad :-(
 

EmptyNest

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What is the oddest "Innkeepers Quarters" that you've ever heard of?
I don't know about "oddest" but worst...we went to look at a property and I told the innkeepers the night before "I would never buy a place where innkeepers had to live in a dark and musty smelling basement. The next morning as they showed us the property, we were led to a dark and musty smelling basement!!!! I about gagged and right then and there said. SOrry this is not for us and we left immediately. It was my worst nightmare starring me in the face :-(
 

EmptyNest

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You have done tons of wonderful work! Your price is the definite draw to buyers. I haven't seen that low a price in ages. So for someone who wants to get started in the business, this could be just what they are looking for. Good luck!
 

wendydk

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We have two seperate listings, one as a residence and one as a B&B. We have had three showings, and two more scheduled in the coming weeks...all looking at as a B&B. My broker tells everyone right up front what our layout is, and every buyer that has come through has been well aware of the shared bath and bedroom situation.
Frankly, this situation is far superior to several operating B&B's that we looked at for sale in the beginning stages (and brings in more revenue and is for sale for less than any we looked at back then). We have put alot of money into this place already in 7 years, huge remodeled kitchen and remodeled keepers living room, ALL new appliances, brand new three sided porch, added bathroom, new entry doors everywhere, all new pella windows upstairs, new parking area for four cars, all new flowerbeds, beautiful 2.5 acre seeded lawn (used to be a dirt and weed lot), tons of gorgeous planting beds, signage and on and on with a million small projects like outside lighting, brick walkways, paint and shutters and so on.
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists.
 

muirford

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Do you have a different sale price if someone buys it as a home?.
You could sell the home as a home - price driven by real estate value - and the business separately. It wouldn't be the right option for a lot of people, but the seller could even hold the loan for the business while the bank holds the loan for the house as a residence. There are lots of issues to work out, like proper insurance, paperwork, etc. and you would not be first in line to get repaid if the buyer defaulted on the propert. Not everyone would be able to do that financially or emotionally, but it may be an option for some.
.
Oh my, ....a friend just had a bad experience taking back a second mortgage for an inn. Theinn filed Chapter 11 Bankruptcy and guess who got screwed!!! I can't believe she couldn't have covered herself and prevented this from happening, but the second mortgage she covered and she got NOTHING!!! Now she is out big bucks and her own home went into foreclosure and auctioned off. So sad :-(
.
A second mortgage is a little different than holding the paper for the cost of the business but it does have the same problem - the bank that is holding title to the collateral gets their money first. A small B&B business would not be a huge loan (in relation to the mortgage) but of course you should only do it if you can afford to lose the money. My father has done this successfully with some property that he owned and then sold. It's not for the faint of heart, though.
 

Breakfast Diva

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We have two seperate listings, one as a residence and one as a B&B. We have had three showings, and two more scheduled in the coming weeks...all looking at as a B&B. My broker tells everyone right up front what our layout is, and every buyer that has come through has been well aware of the shared bath and bedroom situation.
Frankly, this situation is far superior to several operating B&B's that we looked at for sale in the beginning stages (and brings in more revenue and is for sale for less than any we looked at back then). We have put alot of money into this place already in 7 years, huge remodeled kitchen and remodeled keepers living room, ALL new appliances, brand new three sided porch, added bathroom, new entry doors everywhere, all new pella windows upstairs, new parking area for four cars, all new flowerbeds, beautiful 2.5 acre seeded lawn (used to be a dirt and weed lot), tons of gorgeous planting beds, signage and on and on with a million small projects like outside lighting, brick walkways, paint and shutters and so on.
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists..
Little Blue said:
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists.
Please don't take this wrong, and I'm not trying to be rude, but in another recent thread you stated that your taxes show that your business is at the "break even" point. What's the incentive for the new owners? Will they be able to draw a salary in the future without putting a lot of money into either adding an OQ or additional guest room?
 

wendydk

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We have two seperate listings, one as a residence and one as a B&B. We have had three showings, and two more scheduled in the coming weeks...all looking at as a B&B. My broker tells everyone right up front what our layout is, and every buyer that has come through has been well aware of the shared bath and bedroom situation.
Frankly, this situation is far superior to several operating B&B's that we looked at for sale in the beginning stages (and brings in more revenue and is for sale for less than any we looked at back then). We have put alot of money into this place already in 7 years, huge remodeled kitchen and remodeled keepers living room, ALL new appliances, brand new three sided porch, added bathroom, new entry doors everywhere, all new pella windows upstairs, new parking area for four cars, all new flowerbeds, beautiful 2.5 acre seeded lawn (used to be a dirt and weed lot), tons of gorgeous planting beds, signage and on and on with a million small projects like outside lighting, brick walkways, paint and shutters and so on.
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists..
Little Blue said:
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists.
Please don't take this wrong, and I'm not trying to be rude, but in another recent thread you stated that your taxes show that your business is at the "break even" point. What's the incentive for the new owners? Will they be able to draw a salary in the future without putting a lot of money into either adding an OQ or additional guest room?
.
Do you know of any three-guestroom B&B that allows for an owner to draw a salary? If so, I'd like to see it.
I have to laugh at your "what's the incentive" question, it seems so obvious to me. For us, the incentive was working for ourselves doing something that we love to do, with NO NEED for hired help, meeting some wonderful and diverse people, in a gorgeous part of the country, in a beautifully restored home that pays for itself, including some pretty big past improvements. The hospitality lifestyle was the incentive...I never got into this to get rich. I'm pretty sure I'm not the only innkeeper that got into the business for these reasons.
Not to mention they get a successful operating Inn for a great price. It's priced the way it is to allow new keepers to add a room, or expand the keepers quarters, or keep it the way it is if they want to. Since all the big expensive improvements have been done (kitchen and our quarters as of just a few months ago), it will have a better bottom line from here on out.
Our listing is co-brokered by Bob Feuhr, Michigan's Inn Broker. He said he has never seen a small Inn with "such good numbers". He said "It actually shows a break-even including a prosepective new mortgage payment, taxes, and insurance that's remarkable and suprising for it's size".
Potential buyers looking to roll in the bucks are not going to look at this place, and that's fine with me. Of course, financing is going to be a beeyatch, and so many buyers who are serious may be forced to go large because those are the only Inns that are being loaned on. That would not be for me.
They could always go with the other Inn for sale in town...6 rooms for $850K...same occupancy as we have, although closed during the winter...and stuffed onto a .17 acre lot with no room for parking, much less expansion........tell me what's the freakin' incentive there?????
 

Breakfast Diva

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We have two seperate listings, one as a residence and one as a B&B. We have had three showings, and two more scheduled in the coming weeks...all looking at as a B&B. My broker tells everyone right up front what our layout is, and every buyer that has come through has been well aware of the shared bath and bedroom situation.
Frankly, this situation is far superior to several operating B&B's that we looked at for sale in the beginning stages (and brings in more revenue and is for sale for less than any we looked at back then). We have put alot of money into this place already in 7 years, huge remodeled kitchen and remodeled keepers living room, ALL new appliances, brand new three sided porch, added bathroom, new entry doors everywhere, all new pella windows upstairs, new parking area for four cars, all new flowerbeds, beautiful 2.5 acre seeded lawn (used to be a dirt and weed lot), tons of gorgeous planting beds, signage and on and on with a million small projects like outside lighting, brick walkways, paint and shutters and so on.
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists..
Little Blue said:
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists.
Please don't take this wrong, and I'm not trying to be rude, but in another recent thread you stated that your taxes show that your business is at the "break even" point. What's the incentive for the new owners? Will they be able to draw a salary in the future without putting a lot of money into either adding an OQ or additional guest room?
.
Do you know of any three-guestroom B&B that allows for an owner to draw a salary? If so, I'd like to see it.
I have to laugh at your "what's the incentive" question, it seems so obvious to me. For us, the incentive was working for ourselves doing something that we love to do, with NO NEED for hired help, meeting some wonderful and diverse people, in a gorgeous part of the country, in a beautifully restored home that pays for itself, including some pretty big past improvements. The hospitality lifestyle was the incentive...I never got into this to get rich. I'm pretty sure I'm not the only innkeeper that got into the business for these reasons.
Not to mention they get a successful operating Inn for a great price. It's priced the way it is to allow new keepers to add a room, or expand the keepers quarters, or keep it the way it is if they want to. Since all the big expensive improvements have been done (kitchen and our quarters as of just a few months ago), it will have a better bottom line from here on out.
Our listing is co-brokered by Bob Feuhr, Michigan's Inn Broker. He said he has never seen a small Inn with "such good numbers". He said "It actually shows a break-even including a prosepective new mortgage payment, taxes, and insurance that's remarkable and suprising for it's size".
Potential buyers looking to roll in the bucks are not going to look at this place, and that's fine with me. Of course, financing is going to be a beeyatch, and so many buyers who are serious may be forced to go large because those are the only Inns that are being loaned on. That would not be for me.
They could always go with the other Inn for sale in town...6 rooms for $850K...same occupancy as we have, although closed during the winter...and stuffed onto a .17 acre lot with no room for parking, much less expansion........tell me what's the freakin' incentive there?????
.
Please don't get defensive. I'm just asking questions a prospective buyer would ask. I wasn't sure if your break even included paying the mortage or not. The way ours is set up, we pay the mortgage from our personal account from a salary we draw from the business.
Your business is making a profit, but the profit is being used to pay the mortgage and not just your operating expenses.
I'm not judging you or your B&B, just trying help evaluate your original question about owner's quarters and how necessary it is for your sale.
My "what's the incentive" question was ment to see how could the new owners increase the business you've already done very well at! When we sell our place, I'm going to have to let them know different areas of opportunities (such as weddings, special functions, etc) that we don't do now. We are what I consider at the top of what our B&B can do. A prospective new buyer wants to know how they can not only keep what you've got going, but hopefully expand in the future.
Edited to add: Of course all of us here know the real "incentive" for having our own B&B, and it's just as you stated.
 

EmptyNest

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We have two seperate listings, one as a residence and one as a B&B. We have had three showings, and two more scheduled in the coming weeks...all looking at as a B&B. My broker tells everyone right up front what our layout is, and every buyer that has come through has been well aware of the shared bath and bedroom situation.
Frankly, this situation is far superior to several operating B&B's that we looked at for sale in the beginning stages (and brings in more revenue and is for sale for less than any we looked at back then). We have put alot of money into this place already in 7 years, huge remodeled kitchen and remodeled keepers living room, ALL new appliances, brand new three sided porch, added bathroom, new entry doors everywhere, all new pella windows upstairs, new parking area for four cars, all new flowerbeds, beautiful 2.5 acre seeded lawn (used to be a dirt and weed lot), tons of gorgeous planting beds, signage and on and on with a million small projects like outside lighting, brick walkways, paint and shutters and so on.
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists..
Little Blue said:
I'm just not willing to put a ton more money into it to attract B&B buyers. If someone wants a little B&B in a prime four-season location with great reputation & reviews, revenues, occupancy, web rankings, market share and room to expand for less than $250K, this is the place. In fact, I dare anyone to find a better small B&B deal anywhere taking all of that into consideration! I don't think it exists.
Please don't take this wrong, and I'm not trying to be rude, but in another recent thread you stated that your taxes show that your business is at the "break even" point. What's the incentive for the new owners? Will they be able to draw a salary in the future without putting a lot of money into either adding an OQ or additional guest room?
.
Do you know of any three-guestroom B&B that allows for an owner to draw a salary? If so, I'd like to see it.
I have to laugh at your "what's the incentive" question, it seems so obvious to me. For us, the incentive was working for ourselves doing something that we love to do, with NO NEED for hired help, meeting some wonderful and diverse people, in a gorgeous part of the country, in a beautifully restored home that pays for itself, including some pretty big past improvements. The hospitality lifestyle was the incentive...I never got into this to get rich. I'm pretty sure I'm not the only innkeeper that got into the business for these reasons.
Not to mention they get a successful operating Inn for a great price. It's priced the way it is to allow new keepers to add a room, or expand the keepers quarters, or keep it the way it is if they want to. Since all the big expensive improvements have been done (kitchen and our quarters as of just a few months ago), it will have a better bottom line from here on out.
Our listing is co-brokered by Bob Feuhr, Michigan's Inn Broker. He said he has never seen a small Inn with "such good numbers". He said "It actually shows a break-even including a prosepective new mortgage payment, taxes, and insurance that's remarkable and suprising for it's size".
Potential buyers looking to roll in the bucks are not going to look at this place, and that's fine with me. Of course, financing is going to be a beeyatch, and so many buyers who are serious may be forced to go large because those are the only Inns that are being loaned on. That would not be for me.
They could always go with the other Inn for sale in town...6 rooms for $850K...same occupancy as we have, although closed during the winter...and stuffed onto a .17 acre lot with no room for parking, much less expansion........tell me what's the freakin' incentive there?????
.
Please don't get defensive. I'm just asking questions a prospective buyer would ask. I wasn't sure if your break even included paying the mortage or not. The way ours is set up, we pay the mortgage from our personal account from a salary we draw from the business.
Your business is making a profit, but the profit is being used to pay the mortgage and not just your operating expenses.
I'm not judging you or your B&B, just trying help evaluate your original question about owner's quarters and how necessary it is for your sale.
My "what's the incentive" question was ment to see how could the new owners increase the business you've already done very well at! When we sell our place, I'm going to have to let them know different areas of opportunities (such as weddings, special functions, etc) that we don't do now. We are what I consider at the top of what our B&B can do. A prospective new buyer wants to know how they can not only keep what you've got going, but hopefully expand in the future.
Edited to add: Of course all of us here know the real "incentive" for having our own B&B, and it's just as you stated.
.
My friend is getting ready to put his place on the market and the first thing the realtor told him was to be prepared to prove to the next owners that they have a way to increase their business should they buy it. They were already figuring out where they could fit in another bedroom and bathroom.
 

gillumhouse

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I do hope you find a solution to your problem. I do not think anyone has been trying to be snarky. We are just telling you "our prefers" if we were potential buyers - what we would be looking for. To have the revenues to show with good occupancy are great draws in themselves. I wish you luck with the showings scheduled. I am certain your buyer is out there somewhere. I hope mine is when I am ready to put my place on the market.
 
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