A Beautiful Virginia Bed and Breakfast is Yours for $150 and an Essay

[Copperhead]

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??.

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??

As mentioned in the article I linked in my other post, the innkeeper stated that since they receive reservations for up to 11 months ahead, the winner would need to agree to run the inn for at least 12 months. Makes sence now doesn't it!

 

[Sunshine]

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??.

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??

As mentioned in the article I linked in my other post, the innkeeper stated that since they receive reservations for up to 11 months ahead, the winner would need to agree to run the inn for at least 12 months. Makes sence now doesn't it!
.

oh, of course!

 

[happykeeper]

A great article here gives a little more insite of the contest.
I found it intersting of the list of other homes, businesses that also tried this method, but failed.
The article also gave a little more info about the Maine property that completed the essay contest earlier this year..

That was great. It answered a lot of questions and put an honest spin on it. Geez- it seems like a good story and a $150 bucks could turn someone or some family's life in a new and prosperous direction. Compared to the lottery, these are great odds.

 

[Breakfast Diva]

A great article here gives a little more insite of the contest.
I found it intersting of the list of other homes, businesses that also tried this method, but failed.
The article also gave a little more info about the Maine property that completed the essay contest earlier this year..

Please help spread the word and share the article anywhere you can!

 

[Country Girl]

 

[Arks]

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??.

I am wondering tho about why they all say they have to run it as a B&B for a year after winning it?
Is it a tax thing for the owner of the home? Say, if the winner doesn't run it as a B&B then the owner can't say it was a business and thus have tax consequences??

As mentioned in the article I linked in my other post, the innkeeper stated that since they receive reservations for up to 11 months ahead, the winner would need to agree to run the inn for at least 12 months. Makes sence now doesn't it!
.

...they receive reservations for up to 11 months ahead, the winner would need to agree to run the inn for at least 12 months.

Very nice of them. I think in many cases the business will close and just call people already on the books, telling them they'll have to make other arrangements. Same as if the business owner suffered an illness, fire, etc. Most people would accept this without a problem.

 

[Joey Camb]

I was wondering about the legality of this enterprise. There are games of chance, gambling, and contest rules; the essay is meaningless. This is little different than a charity raffle selling tickets to win a donated car, etc.
Charging $150 seems to run into gray to red areas that might be afoul of law at some level. But not really sure about the specifics.
For example, what happens if the owner decides no one wins and keeps the money? Essay not good enough or not enough entries?
Who is independently monitoring this?
If so, it could come down hard on the seller and become complex for the winner. As in prison, fines, winner moved in and then evicted due to seizure of property.
I see nothing in the linked article that gives any comfort. Federal, state, and municipal regulations can be strict in these matters..

Undersea, this has been done before. There is also another property in another state doing the same right now.

There are details on the site that indicate that if they do not receive enough entries, the money will be returned (minus shipping costs) to each applicant.
You are correct that it may not be legal to do this in every state, or local. Research must be done to assure it is handled in a lawful manor.
Knowing this innkeeper, she crossed all her t's and dotted all her i's before this rolled out.
.

Thanks. I just read the linked PR, and did not go to the site.
I have seen things like this before, but I also have seen people get into trouble for not crossing and dotting.
I will say though, that I never participate in raffles. First, I do not have the closet space in case I win and second, the return on most is pretty bad (same as the state lotteries).
.

I think if I was wanting a BB but didn't have enough money, id give it a go - worth a shot as someone has to win, and it might be you.

 

[GoodScout]

Raises an interesting side issue for all us innkeepers: How can we expect to sell our businesses down the road if the current banking market stays the same?
We managed to waggle financing for the purchase of our B&B two years ago, but it was a nightmarish labyrinth that took 10 months from contract to closing.
I suspect we'll see more of these B&B lotteries as more and more owners want to "cash out" and find that even qualified people can't get business financing to purchase.

 

[Arks]

Hmmm. How about a $150 and a song rather than an essay? Play off of American Idol or America's Got Talent. The singing innkeeper.
Or better yet, how about the inn goes to the one who makes the best home brew beer, and I'll volunteer to be the taste tester!

 

[EmptyNest]

Raises an interesting side issue for all us innkeepers: How can we expect to sell our businesses down the road if the current banking market stays the same?
We managed to waggle financing for the purchase of our B&B two years ago, but it was a nightmarish labyrinth that took 10 months from contract to closing.
I suspect we'll see more of these B&B lotteries as more and more owners want to "cash out" and find that even qualified people can't get business financing to purchase..

You got it. That's why we still live in ours. It is not a problem for us..as we own it and love living in it. But We cannot get the price we want for it..so they can roll us out the door when the time comes. It is an issue already...some places have been up for sale for what seems like eons! No loans and no one has even down payments...or the majority. Bankruptcy looming large for many.:-(

 

[gillumhouse]

I was wondering about the legality of this enterprise. There are games of chance, gambling, and contest rules; the essay is meaningless. This is little different than a charity raffle selling tickets to win a donated car, etc.
Charging $150 seems to run into gray to red areas that might be afoul of law at some level. But not really sure about the specifics.
For example, what happens if the owner decides no one wins and keeps the money? Essay not good enough or not enough entries?
Who is independently monitoring this?
If so, it could come down hard on the seller and become complex for the winner. As in prison, fines, winner moved in and then evicted due to seizure of property.
I see nothing in the linked article that gives any comfort. Federal, state, and municipal regulations can be strict in these matters..

Undersea, this has been done before. There is also another property in another state doing the same right now.

There are details on the site that indicate that if they do not receive enough entries, the money will be returned (minus shipping costs) to each applicant.
You are correct that it may not be legal to do this in every state, or local. Research must be done to assure it is handled in a lawful manor.
Knowing this innkeeper, she crossed all her t's and dotted all her i's before this rolled out.
.

Thanks. I just read the linked PR, and did not go to the site.
I have seen things like this before, but I also have seen people get into trouble for not crossing and dotting.
I will say though, that I never participate in raffles. First, I do not have the closet space in case I win and second, the return on most is pretty bad (same as the state lotteries).
.

I think if I was wanting a BB but didn't have enough money, id give it a go - worth a shot as someone has to win, and it might be you.
.

I think if I was wanting a BB but didn't have enough money, id give it a go - worth a shot as someone has to win, and it might be you.

Exactly. People blow more than $150 a month on junk. Not being a smoker, I am not sure how much a carton costs these days, but last I knew, they were about $50 a carton. So for the price of a carton of cigarettes, a few drinks and a couple dinners there is a chance to possibly end up with your own business AND residence - free and clear. Such a deal. One thing is certain, like the Lottery, if you do not play, they cannot pay.

 

[GoodScout]

I have a confession: I thought for a few minutes about entering. Figured my writing ability and knowledge about running a B&B might give me a slightly better chance of winning.
Then I woke up and realized that if the current owner of a B&B won another in this contest, the sh- storm from the media and other entrants would be ungodly.

 

[Innkeep]

You know, for all of us innkeepers I believe the thought of trying to sell our inns is one of the biggest problems. I sort of suspected that would be the case when I started mine. At that time, I was in such a hurry to get out of my old job that it didn't matter all that much. That was before I invested "me" into this place. I love all the nice things my repeat guests tell me, I love the fact hat I now know how to cook (breakfast, anyway), and finally the townsfolk seem to know there's a B&B in town. BUT I'm 99% sure it would never sell as a B&B.
I'm not even sure it'll sell as a residence. My town has been in a permanent recession since 2007. Essentially all the large factories have closed, the majority of school kids are on free lunch program, and with 5 bedrooms on one of the busiest streets in town, who would want it, even if I asked for half of what it cost to remodel? (Plus, this sad situation really cuts down on the number of reasons travelers want to visit here)
I'm not ready to hang up the apron strings, but I am amazed at how much older I feel this year. Old Arthur has taken up residence, so I at least need to look at an exit strategy. I've been toying with the idea of donating the whole kit and kaboodle to the local university. They have a hospitality major, and I'm surrounded by the campus on 3 sides.
As a group, us Innspiring Innkeepers are awesome. Can we put our heads together to figure out how small B&B's in non-touristy places ought to be sold in the US? Or for that matter how to put together financing for the bigger places that used to not be so difficult? Nowadays crowdfunding seems sometimes to work, not only with the essay contest, but in entirely different situations.
If some financial wheeler dealer wanted to start some sort of loan fund that was financed by selling shares to investors (offered to B&B owners in PAII, AHIP, state & local associations plus anybody in the general public interested in diversifying their portfolio) that would make money available to loan. Loan interest would go back to investors. Borrowers would be vetted as well as possible and if they default then the fund would have the property. Fund administrators would have to take responsibility of doing a good job of vetting, because in order for this scheme to work, they would have the most liability. Would need to have lots of $$$ to work at all, because I'm sure some loans will default. But the thing is, all of us who are here have figured out how to pay our bills, and perhaps as a collective we can find a way of vetting potential borrowers.
There are segments of the population that are "angel" investors with big bucks to start up things like this, MBA programs that have students do projects to outline how something like I've described, or feasibility studies to say "you're crazy". I personally don't know any angel investors, but have seen on or two at a distance

. There is, however, a business school at my aforementioned university. Is anyone on the forum already an MBA in a previous life? Anyone ever met an angel???

I know I'm crazy, so be kind with your comments!

 

[gillumhouse]

You know, for all of us innkeepers I believe the thought of trying to sell our inns is one of the biggest problems. I sort of suspected that would be the case when I started mine. At that time, I was in such a hurry to get out of my old job that it didn't matter all that much. That was before I invested "me" into this place. I love all the nice things my repeat guests tell me, I love the fact hat I now know how to cook (breakfast, anyway), and finally the townsfolk seem to know there's a B&B in town. BUT I'm 99% sure it would never sell as a B&B.
I'm not even sure it'll sell as a residence. My town has been in a permanent recession since 2007. Essentially all the large factories have closed, the majority of school kids are on free lunch program, and with 5 bedrooms on one of the busiest streets in town, who would want it, even if I asked for half of what it cost to remodel? (Plus, this sad situation really cuts down on the number of reasons travelers want to visit here)
I'm not ready to hang up the apron strings, but I am amazed at how much older I feel this year. Old Arthur has taken up residence, so I at least need to look at an exit strategy. I've been toying with the idea of donating the whole kit and kaboodle to the local university. They have a hospitality major, and I'm surrounded by the campus on 3 sides.
As a group, us Innspiring Innkeepers are awesome. Can we put our heads together to figure out how small B&B's in non-touristy places ought to be sold in the US? Or for that matter how to put together financing for the bigger places that used to not be so difficult? Nowadays crowdfunding seems sometimes to work, not only with the essay contest, but in entirely different situations.
If some financial wheeler dealer wanted to start some sort of loan fund that was financed by selling shares to investors (offered to B&B owners in PAII, AHIP, state & local associations plus anybody in the general public interested in diversifying their portfolio) that would make money available to loan. Loan interest would go back to investors. Borrowers would be vetted as well as possible and if they default then the fund would have the property. Fund administrators would have to take responsibility of doing a good job of vetting, because in order for this scheme to work, they would have the most liability. Would need to have lots of $$$ to work at all, because I'm sure some loans will default. But the thing is, all of us who are here have figured out how to pay our bills, and perhaps as a collective we can find a way of vetting potential borrowers.
There are segments of the population that are "angel" investors with big bucks to start up things like this, MBA programs that have students do projects to outline how something like I've described, or feasibility studies to say "you're crazy". I personally don't know any angel investors, but have seen on or two at a distance

. There is, however, a business school at my aforementioned university. Is anyone on the forum already an MBA in a previous life? Anyone ever met an angel???

I know I'm crazy, so be kind with your comments!.

That truly is a wonderful idea. I do wish I had some bucks or knew someone who does.
As for your hospitality program idea, we have 2 schools here doing just that. Davis & Elkins College has turned Graceland into a hospitality hands-on major. They have rooms in the mansion in addition to a banquet/reception area and an annex that is rooms for conference attendees. It was built by Senator Henry Gassaway Davis and named for his youngest daughter, Grace.
Also on what is now the campus is Halliehurst built by Senator Stephen Elkins and named for his wife - the only woman who was the daughter, wife, and Mother of a Senator as she was the daughter of Henry Davis and her son was also a Senator. Halliehurst is now the Admin building of D & E. (Sorry, had to give a little history as to why it is Graceland (not the home of Elvis).
West Liberty University is a State of West Virginia University. The old President's House was restored (and a bit remodeled) to be a hands-on B & B for the Hospitality Program.
So your thoughts about hospitality program are not in left field.

 

[happykeeper]

You know, for all of us innkeepers I believe the thought of trying to sell our inns is one of the biggest problems. I sort of suspected that would be the case when I started mine. At that time, I was in such a hurry to get out of my old job that it didn't matter all that much. That was before I invested "me" into this place. I love all the nice things my repeat guests tell me, I love the fact hat I now know how to cook (breakfast, anyway), and finally the townsfolk seem to know there's a B&B in town. BUT I'm 99% sure it would never sell as a B&B.
I'm not even sure it'll sell as a residence. My town has been in a permanent recession since 2007. Essentially all the large factories have closed, the majority of school kids are on free lunch program, and with 5 bedrooms on one of the busiest streets in town, who would want it, even if I asked for half of what it cost to remodel? (Plus, this sad situation really cuts down on the number of reasons travelers want to visit here)
I'm not ready to hang up the apron strings, but I am amazed at how much older I feel this year. Old Arthur has taken up residence, so I at least need to look at an exit strategy. I've been toying with the idea of donating the whole kit and kaboodle to the local university. They have a hospitality major, and I'm surrounded by the campus on 3 sides.
As a group, us Innspiring Innkeepers are awesome. Can we put our heads together to figure out how small B&B's in non-touristy places ought to be sold in the US? Or for that matter how to put together financing for the bigger places that used to not be so difficult? Nowadays crowdfunding seems sometimes to work, not only with the essay contest, but in entirely different situations.
If some financial wheeler dealer wanted to start some sort of loan fund that was financed by selling shares to investors (offered to B&B owners in PAII, AHIP, state & local associations plus anybody in the general public interested in diversifying their portfolio) that would make money available to loan. Loan interest would go back to investors. Borrowers would be vetted as well as possible and if they default then the fund would have the property. Fund administrators would have to take responsibility of doing a good job of vetting, because in order for this scheme to work, they would have the most liability. Would need to have lots of $$$ to work at all, because I'm sure some loans will default. But the thing is, all of us who are here have figured out how to pay our bills, and perhaps as a collective we can find a way of vetting potential borrowers.
There are segments of the population that are "angel" investors with big bucks to start up things like this, MBA programs that have students do projects to outline how something like I've described, or feasibility studies to say "you're crazy". I personally don't know any angel investors, but have seen on or two at a distance

. There is, however, a business school at my aforementioned university. Is anyone on the forum already an MBA in a previous life? Anyone ever met an angel???

I know I'm crazy, so be kind with your comments!.

You have to be crazy to think that any of these ideas are crazy. This is TRULY the kind of innovative thinking that can catch a sail and plow through the headwaters. It would be easy to nasay, but Uber wasn't stared by someone the who listened to the noise.
I was particularly taken with the crowdfunding concept that would open the door for a collective to make a difference similar to the original Habitat for Humanity concept. In this scenario, an angel investor could help with the roll out while the crowd contributed to giving those amongst them a crack at innkeeping. Totally doable in this day and age.

 

[TheBeachHouse]

You know, for all of us innkeepers I believe the thought of trying to sell our inns is one of the biggest problems. I sort of suspected that would be the case when I started mine. At that time, I was in such a hurry to get out of my old job that it didn't matter all that much. That was before I invested "me" into this place. I love all the nice things my repeat guests tell me, I love the fact hat I now know how to cook (breakfast, anyway), and finally the townsfolk seem to know there's a B&B in town. BUT I'm 99% sure it would never sell as a B&B.
I'm not even sure it'll sell as a residence. My town has been in a permanent recession since 2007. Essentially all the large factories have closed, the majority of school kids are on free lunch program, and with 5 bedrooms on one of the busiest streets in town, who would want it, even if I asked for half of what it cost to remodel? (Plus, this sad situation really cuts down on the number of reasons travelers want to visit here)
I'm not ready to hang up the apron strings, but I am amazed at how much older I feel this year. Old Arthur has taken up residence, so I at least need to look at an exit strategy. I've been toying with the idea of donating the whole kit and kaboodle to the local university. They have a hospitality major, and I'm surrounded by the campus on 3 sides.
As a group, us Innspiring Innkeepers are awesome. Can we put our heads together to figure out how small B&B's in non-touristy places ought to be sold in the US? Or for that matter how to put together financing for the bigger places that used to not be so difficult? Nowadays crowdfunding seems sometimes to work, not only with the essay contest, but in entirely different situations.
If some financial wheeler dealer wanted to start some sort of loan fund that was financed by selling shares to investors (offered to B&B owners in PAII, AHIP, state & local associations plus anybody in the general public interested in diversifying their portfolio) that would make money available to loan. Loan interest would go back to investors. Borrowers would be vetted as well as possible and if they default then the fund would have the property. Fund administrators would have to take responsibility of doing a good job of vetting, because in order for this scheme to work, they would have the most liability. Would need to have lots of $$$ to work at all, because I'm sure some loans will default. But the thing is, all of us who are here have figured out how to pay our bills, and perhaps as a collective we can find a way of vetting potential borrowers.
There are segments of the population that are "angel" investors with big bucks to start up things like this, MBA programs that have students do projects to outline how something like I've described, or feasibility studies to say "you're crazy". I personally don't know any angel investors, but have seen on or two at a distance

. There is, however, a business school at my aforementioned university. Is anyone on the forum already an MBA in a previous life? Anyone ever met an angel???

I know I'm crazy, so be kind with your comments!.

I could break my house into 5 separate apartments pretty easily. Then sell as condos.
Actually, I'm kind of making myself cringe just thinking of it. But it could be done.
The 20 room place two doors down sold as a single family vacation home. They do seem to enjoy it.

 

[undersea]

You know, for all of us innkeepers I believe the thought of trying to sell our inns is one of the biggest problems. I sort of suspected that would be the case when I started mine. At that time, I was in such a hurry to get out of my old job that it didn't matter all that much. That was before I invested "me" into this place. I love all the nice things my repeat guests tell me, I love the fact hat I now know how to cook (breakfast, anyway), and finally the townsfolk seem to know there's a B&B in town. BUT I'm 99% sure it would never sell as a B&B.
I'm not even sure it'll sell as a residence. My town has been in a permanent recession since 2007. Essentially all the large factories have closed, the majority of school kids are on free lunch program, and with 5 bedrooms on one of the busiest streets in town, who would want it, even if I asked for half of what it cost to remodel? (Plus, this sad situation really cuts down on the number of reasons travelers want to visit here)
I'm not ready to hang up the apron strings, but I am amazed at how much older I feel this year. Old Arthur has taken up residence, so I at least need to look at an exit strategy. I've been toying with the idea of donating the whole kit and kaboodle to the local university. They have a hospitality major, and I'm surrounded by the campus on 3 sides.
As a group, us Innspiring Innkeepers are awesome. Can we put our heads together to figure out how small B&B's in non-touristy places ought to be sold in the US? Or for that matter how to put together financing for the bigger places that used to not be so difficult? Nowadays crowdfunding seems sometimes to work, not only with the essay contest, but in entirely different situations.
If some financial wheeler dealer wanted to start some sort of loan fund that was financed by selling shares to investors (offered to B&B owners in PAII, AHIP, state & local associations plus anybody in the general public interested in diversifying their portfolio) that would make money available to loan. Loan interest would go back to investors. Borrowers would be vetted as well as possible and if they default then the fund would have the property. Fund administrators would have to take responsibility of doing a good job of vetting, because in order for this scheme to work, they would have the most liability. Would need to have lots of $$$ to work at all, because I'm sure some loans will default. But the thing is, all of us who are here have figured out how to pay our bills, and perhaps as a collective we can find a way of vetting potential borrowers.
There are segments of the population that are "angel" investors with big bucks to start up things like this, MBA programs that have students do projects to outline how something like I've described, or feasibility studies to say "you're crazy". I personally don't know any angel investors, but have seen on or two at a distance

. There is, however, a business school at my aforementioned university. Is anyone on the forum already an MBA in a previous life? Anyone ever met an angel???

I know I'm crazy, so be kind with your comments!.

BUT I'm 99% sure it would never sell as a B&B.

THOUGHTS:
I am not so sure that is true. I looked at a lot of "B&B for sale" type sites, and I got the feeling that owners expected to cash in once they sell. Most B&Bs list for $500K to $1 million or more.
OTOH, near us was a B&B selling for $200K with $20K annual revenue for 3 rooms. With all the grief that goes into ownership, I would likely make that much renting it out as rental rooms or a whole house.
Since B&Bs are set up that way, consider turning it into a rooming house. There are retirees and people all across the country looking for an affordable place that includes utilities and their own bath, and that will often bring in reasonable income almost everywhere.
Consider listing it on the MLS with a major realtor. B&B is a category on sites like realtor.com, etc. If you are trying to move, trying FSBO is not the best way. You need pros who can bring in those looking for what you are offering.

 

[GoodScout]

When we bought our B&B two years ago, we made a commitment that at year 10 we would begin discussing our exit strategy, even if we wanted to keep doing what we were doing for another decade. We knew that planning for how to sell your B&B was just as important as planning to buy it.
We're now 8 years away from that moment, but it's clear that if the financial environment doesn't change, creative means are going to be required.

 

[Morticia]

When we bought our B&B two years ago, we made a commitment that at year 10 we would begin discussing our exit strategy, even if we wanted to keep doing what we were doing for another decade. We knew that planning for how to sell your B&B was just as important as planning to buy it.
We're now 8 years away from that moment, but it's clear that if the financial environment doesn't change, creative means are going to be required..

We had a 10 year plan that had now gone to 15. We're probably not getting back what we paid but we need to have enough to buy our next house. The market was high when we bought and now it's not. 2 properties here recently sold for substantially less than they were purchased for so that set the new bar very low for us even tho this place pulls in more $$$ and is much better maintained.
Another place sold very well, tho, so that might average us out a little higher.

 

[muirford]

Raises an interesting side issue for all us innkeepers: How can we expect to sell our businesses down the road if the current banking market stays the same?
We managed to waggle financing for the purchase of our B&B two years ago, but it was a nightmarish labyrinth that took 10 months from contract to closing.
I suspect we'll see more of these B&B lotteries as more and more owners want to "cash out" and find that even qualified people can't get business financing to purchase..

Raises an interesting side issue for all us innkeepers: How can we expect to sell our businesses down the road if the current banking market stays the same?
We managed to waggle financing for the purchase of our B&B two years ago, but it was a nightmarish labyrinth that took 10 months from contract to closing.

An interesting blog post by one of the brokers/consultants in the field Our B&B financing came through a local bank, and although it was not easy, our local banker made extra efforts for us because he knew us and our business. Innkeep's ideas are fascinating though - we had thought about turning our B&B into two or four condos, and selling three of them, or renting them as apartments. We had some mild interest from a nonprofit, and the University talked a big story about a hospitality program but never got it off the ground.
http://www.innpartners.com/taming-bb-bogeymen/