New construction B&B?

[kris_pip]

So much food for thought. We'd be 10 minutes from a tourist/university town, but still in a beautifully wooded mountainous area. I feel confident about location, and houses for the size we're thinking are definitely going around $1 million. Fortunately, my husband has been in construction and real estate, so we think we can get in for approx $900k (doing much of the work ourselves, esp on baths, while I continue to work), but it's VERY possible that we're setting waaay too lofty goals.
After reading your comments, I think we'd be hard pressed to try and pay a $5k monthly mortgage with a 7-room inn. Though I think our market rate could range from $150 to $250 per night, I understand how long it can take for business to start up. Our other services (a.k.a businesses) were designed to add to our revenue, but may just be more of our $$ down the drain.
I've been inspired to look to friends/others for some venture capital, and see if we can get backed by investors in exchange for a piece of the pie. I'm also encouraged to consider the alternative -- smaller-scale turnkey operation or existing structure to renovate. The only thing that would be really important to me if we go this route is to have a separate building for OQ.
Seashanty -- What you describes sounds absolutely perfect. Perhaps we can turn an building just like that into the inn we are dreaming of ...

 

[Morticia]

So much food for thought. We'd be 10 minutes from a tourist/university town, but still in a beautifully wooded mountainous area. I feel confident about location, and houses for the size we're thinking are definitely going around $1 million. Fortunately, my husband has been in construction and real estate, so we think we can get in for approx $900k (doing much of the work ourselves, esp on baths, while I continue to work), but it's VERY possible that we're setting waaay too lofty goals.
After reading your comments, I think we'd be hard pressed to try and pay a $5k monthly mortgage with a 7-room inn. Though I think our market rate could range from $150 to $250 per night, I understand how long it can take for business to start up. Our other services (a.k.a businesses) were designed to add to our revenue, but may just be more of our $$ down the drain.
I've been inspired to look to friends/others for some venture capital, and see if we can get backed by investors in exchange for a piece of the pie. I'm also encouraged to consider the alternative -- smaller-scale turnkey operation or existing structure to renovate. The only thing that would be really important to me if we go this route is to have a separate building for OQ.
Seashanty -- What you describes sounds absolutely perfect. Perhaps we can turn an building just like that into the inn we are dreaming of ....

Be careful with 'investors'. It sounds like the perfect way to raise the needed funds but then it becomes a source of irritation as the investors want to be able to direct how the biz is run. Or they want free nights. Or they think they have better ideas. Or they're not making their money back fast enough.
Just be clear on all the points and be sure you have contracts. Don't so anything 'as friends' or with family without a contract.

 

[kris_pip]

Thanks for the welcome and advice. Such GREAT suggestions. I most definitely will try to arrange living there for a month. It will be a huge adjustment.
I think we are looking at $80-$100k for the property, and $900k for the building. I think we could save $250 - $300k for a down payment, but not much more. We'd have to mortgage the rest. I wonder if SBA loans could make up any difference? You are right; we absolutely need to research this aspect more.
We would start with me working part-time (or possibly full-time telecommuting), both of us taking reservations/greeting/checking-out, my husband cooking breakfast, doing all maintenance, and hosting kayaking, etc. (as he is available - we would create a schedule). We would then pay someone to clean rooms, do laundry, wash dishes, and possibly prep food. Just breakfast at this point.
Our thought is that we could then build on our services as we make more $$ and gain experience -- my husband starts buildling more cottages on property, we hire staff to help with weddings, we hire staff to help guide tours (like high school / college kids), and continue paying someone to do housekeeping.
I think the winery/vineyard, in-house spa services (if any), and restaurant are WAY down the road.
Am I still being a little crazy? I guess I just want to get it out of my mind if it's just not possible (or scale WAY down and wait until retirement, which is NOT my dream if you know what I mean ...).

Thanks for the welcome and advice. Such GREAT suggestions. I most definitely will try to arrange living there for a month. It will be a huge adjustment.
I think we are looking at $80-$100k for the property, and $900k for the building. I think we could save $250 - $300k for a down payment, but not much more. We'd have to mortgage the rest. I wonder if SBA loans could make up any difference? You are right; we absolutely need to research this aspect more.
We would start with me working part-time (or possibly full-time telecommuting), both of us taking reservations/greeting/checking-out, my husband cooking breakfast, doing all maintenance, and hosting kayaking, etc. (as he is available - we would create a schedule). We would then pay someone to clean rooms, do laundry, wash dishes, and possibly prep food. Just breakfast at this point.
Our thought is that we could then build on our services as we make more $$ and gain experience -- my husband starts buildling more cottages on property, we hire staff to help with weddings, we hire staff to help guide tours (like high school / college kids), and continue paying someone to do housekeeping.
I think the winery/vineyard, in-house spa services (if any), and restaurant are WAY down the road.
Am I still being a little crazy? I guess I just want to get it out of my mind if it's just not possible (or scale WAY down and wait until retirement, which is NOT my dream if you know what I mean ...)

This is a guess and not a pin for bubble-bursting...it may be very hard to get a business loan for a business that doesn't exist. It's not undoable, but it will take a LOT more work to convince someone to loan you the money. You have to show them what you will live on while you are building. If you will be working in the city while the construction is going on, who is overseeing the workers?
If your last name is Trump, you can get anyone to back anything. If not, it's a little harder.
Good idea to plan the additions. You may find that you like the coziness of the smaller B&B. Maybe not. You may want an 'empire'. We have 7 rooms. We do ALL of the work ourselves, except for snow plowing and lawn mowing. ALL of it. In the summer I don't have time to get a haircut much less to do tours.
And I'm not sure I'd trust teens with guided tours involving water (with no adult oversight). You have to get insurance and the insurance companies may have the same reluctance.
.

I think I would continue working, supporting the hubs while he oversees construction. A thought is to eliminate rock-climbing/white-water rafting, and only do guided hiking tours to specific nature destinations (mountain-tops, caves) in the area and kayaking/canoes. I also wonder how camps support insurance for college-aged camp counselors who oversee swimming, kayaking and canoe trips? My husband used to do guided tours such as these for adventure companies, so I'm delegating that research to him!

 

[kris_pip]

So much food for thought. We'd be 10 minutes from a tourist/university town, but still in a beautifully wooded mountainous area. I feel confident about location, and houses for the size we're thinking are definitely going around $1 million. Fortunately, my husband has been in construction and real estate, so we think we can get in for approx $900k (doing much of the work ourselves, esp on baths, while I continue to work), but it's VERY possible that we're setting waaay too lofty goals.
After reading your comments, I think we'd be hard pressed to try and pay a $5k monthly mortgage with a 7-room inn. Though I think our market rate could range from $150 to $250 per night, I understand how long it can take for business to start up. Our other services (a.k.a businesses) were designed to add to our revenue, but may just be more of our $$ down the drain.
I've been inspired to look to friends/others for some venture capital, and see if we can get backed by investors in exchange for a piece of the pie. I'm also encouraged to consider the alternative -- smaller-scale turnkey operation or existing structure to renovate. The only thing that would be really important to me if we go this route is to have a separate building for OQ.
Seashanty -- What you describes sounds absolutely perfect. Perhaps we can turn an building just like that into the inn we are dreaming of ....

Be careful with 'investors'. It sounds like the perfect way to raise the needed funds but then it becomes a source of irritation as the investors want to be able to direct how the biz is run. Or they want free nights. Or they think they have better ideas. Or they're not making their money back fast enough.
Just be clear on all the points and be sure you have contracts. Don't so anything 'as friends' or with family without a contract.
.

I hear ya, Bree! I'm a lawyer (not the "bad" kind! and now you know why I want to open a B&B so badly!). I would work very hard to put airtight contracts together addressing all these things. Very, very good points you make.

 

[Morticia]

Thanks for the welcome and advice. Such GREAT suggestions. I most definitely will try to arrange living there for a month. It will be a huge adjustment.
I think we are looking at $80-$100k for the property, and $900k for the building. I think we could save $250 - $300k for a down payment, but not much more. We'd have to mortgage the rest. I wonder if SBA loans could make up any difference? You are right; we absolutely need to research this aspect more.
We would start with me working part-time (or possibly full-time telecommuting), both of us taking reservations/greeting/checking-out, my husband cooking breakfast, doing all maintenance, and hosting kayaking, etc. (as he is available - we would create a schedule). We would then pay someone to clean rooms, do laundry, wash dishes, and possibly prep food. Just breakfast at this point.
Our thought is that we could then build on our services as we make more $$ and gain experience -- my husband starts buildling more cottages on property, we hire staff to help with weddings, we hire staff to help guide tours (like high school / college kids), and continue paying someone to do housekeeping.
I think the winery/vineyard, in-house spa services (if any), and restaurant are WAY down the road.
Am I still being a little crazy? I guess I just want to get it out of my mind if it's just not possible (or scale WAY down and wait until retirement, which is NOT my dream if you know what I mean ...).

Thanks for the welcome and advice. Such GREAT suggestions. I most definitely will try to arrange living there for a month. It will be a huge adjustment.
I think we are looking at $80-$100k for the property, and $900k for the building. I think we could save $250 - $300k for a down payment, but not much more. We'd have to mortgage the rest. I wonder if SBA loans could make up any difference? You are right; we absolutely need to research this aspect more.
We would start with me working part-time (or possibly full-time telecommuting), both of us taking reservations/greeting/checking-out, my husband cooking breakfast, doing all maintenance, and hosting kayaking, etc. (as he is available - we would create a schedule). We would then pay someone to clean rooms, do laundry, wash dishes, and possibly prep food. Just breakfast at this point.
Our thought is that we could then build on our services as we make more $$ and gain experience -- my husband starts buildling more cottages on property, we hire staff to help with weddings, we hire staff to help guide tours (like high school / college kids), and continue paying someone to do housekeeping.
I think the winery/vineyard, in-house spa services (if any), and restaurant are WAY down the road.
Am I still being a little crazy? I guess I just want to get it out of my mind if it's just not possible (or scale WAY down and wait until retirement, which is NOT my dream if you know what I mean ...)

This is a guess and not a pin for bubble-bursting...it may be very hard to get a business loan for a business that doesn't exist. It's not undoable, but it will take a LOT more work to convince someone to loan you the money. You have to show them what you will live on while you are building. If you will be working in the city while the construction is going on, who is overseeing the workers?
If your last name is Trump, you can get anyone to back anything. If not, it's a little harder.
Good idea to plan the additions. You may find that you like the coziness of the smaller B&B. Maybe not. You may want an 'empire'. We have 7 rooms. We do ALL of the work ourselves, except for snow plowing and lawn mowing. ALL of it. In the summer I don't have time to get a haircut much less to do tours.
And I'm not sure I'd trust teens with guided tours involving water (with no adult oversight). You have to get insurance and the insurance companies may have the same reluctance.
.

I think I would continue working, supporting the hubs while he oversees construction. A thought is to eliminate rock-climbing/white-water rafting, and only do guided hiking tours to specific nature destinations (mountain-tops, caves) in the area and kayaking/canoes. I also wonder how camps support insurance for college-aged camp counselors who oversee swimming, kayaking and canoe trips? My husband used to do guided tours such as these for adventure companies, so I'm delegating that research to him!
.

I think I would continue working, supporting the hubs while he oversees construction. A thought is to eliminate rock-climbing/white-water rafting, and only do guided hiking tours to specific nature destinations (mountain-tops, caves) in the area and kayaking/canoes. I also wonder how camps support insurance for college-aged camp counselors who oversee swimming, kayaking and canoe trips? My husband used to do guided tours such as these for adventure companies, so I'm delegating that research to him!

I think the difference there is that the camp counselors are overseen by adults who are ulitmately responsible. If you are 'back at the ranch' how do you know what is going on? And those camp counselors are overseeing children, not adults who may want a completely different experience than what a teenager will offer. You may get adults who challenge your teens' abilities and try to take over.
I have a friend who owns a resort. He has staff. Lots of them. He does breakfast and dinner for 75. And lunch is avail from last night's leftovers. HE does breakfast and dinner. With help, of course. He takes time in the afternoon to water ski, etc. But he has staff. Lots of them. (Did I repeat that?)
From April to November (when he is opening the resort, running the resort and closing the resort) he is unavailable for anything. He DID come to my wedding. Drove 3 hours, danced, ate, celebrated and drove 3 hours back to get breakfast ready. His family does nothing for those months. Which can be VERY inconvenient for the kids in the summer who may ust get tired of playing with strangers everyday. Except most of the strangers come back every summer which is kind of neat.
This is the sort of place that is mostly full everynight. Guest book 'their cottage/room' on their way out the door. He has grandparents whose sons and daughters he played with when they were all kids, who are bringing their grandkids now to the same place they've been going for 50 years. It's that kind of place. He JUST got a website. It's not that good. It doesn't matter.
I stood in the dining room on a freezing cold day in October and watched as he booked room after room for 'the same week next year'. THAT'S the kind of biz we all aspire to. Word of mouth, repeat biz.
He says there's always a room for us there, even if he has to tell his mother to go home!
Hey, glad you're one of the good lawyers!

 

[JunieBJones (JBJ)]

I'm in the same boat as you, kris, but possibly not as ambitious! Keep us updated though, because if it happens, I'm there!
I'm still in the search phase, but what I've been hearing from commercial loan brokers so far is that you'll need about 30% of your total home value (so if you're looking at a total value of $100k for land + $900k for house = $1 million, then you'll need at least $300k) in cash, ready for a downpayment. So if you save up $300k, you might qualify for the loan, but you should still budget some savings for living expenses and paying off a steep loan for a year before you start making any income.
BUT since you're starting from scratch, if you don't have at least 3 years of experience doing similar work, you'll need a VERY strong business plan and possibly a consultant on board to make your case to the banks. Normally they're looking for a few years of proof that you'll be able to make a profit, whether it's a business you're purchasing or your and your husband's resumes.
That's the issue we're facing--since we don't have the resumes, we've been told to look for a turnkey that can show a history of strong profit. And not many innkeepers making strong profits are trying to get rid of their B&Bs.
As I said, I'm just starting my search, so PLEASE don't take my word for any of this. When I asked my questions on the forum, others advised me to call the BB Team. They specialize in B&Bs and can do a feasibility study for you. www.bbteam.com.

And not many innkeepers making strong profits are trying to get rid of their B&Bs.
Not true. False.
They get rid of their B&B's all the time, it is called burn out. Noone can do this indefinately. We wear out. I know of a couple places with wonderful occupancy rates and income stream that are for sale.
Many many reasons innkeepers sell out - maybe sick of having people in their homes day in and day out. Maybe the hard long hours wear them thin. Maybe health goes. Many reasons to sell.
I surely hope you do not think all the "turn-keys" for sale are dogs? Not true at all.
.

I know of a couple places with wonderful occupancy rates and income stream that are for sale.

What am I saying? What I should be saying is "WHERE?!!" I'd love a wonderful occupancy rate! Hey, if you have insider info, please pass it on ;-) I'm sure there are other lurkers who'd appreciate it, too.
I've been keeping an eye on about 10 "for sale" websites, but there's nothing like a personal referral.
.

I know of a couple places with wonderful occupancy rates and income stream that are for sale.

What am I saying? What I should be saying is "WHERE?!!" I'd love a wonderful occupancy rate! Hey, if you have insider info, please pass it on ;-) I'm sure there are other lurkers who'd appreciate it, too.
I've been keeping an eye on about 10 "for sale" websites, but there's nothing like a personal referral.

I might just email you something... NO, not for my place. I hope your email works on here.

 

[gillumhouse]

Sorry to be late chiming in - been gone for 3 days at a Conference. I do a lot with my City because I NEED to make me taking up space on this Earth count for something. I ca ndo that because I only have 3 rooms and because I am willing to half kill myself making a breakfast that even MY DH can put in the oven and serve.
You are talking BIG inn and many adventurous side bars. You recognize that means staff but realize also the more staff you have the more money you will have to make to pay that staff and the more forms and red tape you will have to deal with ad infinitum! Staff means FICA, Workman's Comp, Unemployment taxes, benefits, sick days when you need them least and as for you having a sick day fergitaboudit!! The one and only way most of us can make ends meet (or even come close) is to not have staff and that means sometimes you are half-killing yourself because of the workload and the rest of the time you are sharpening the hari-kari knife because the phone did not ring and how the heck am I going to pay the bills and the staff and the government (state,local, and federal) their bite and the credit card processor is going to dip into the bank account tomorrow for their share of the credit card revenue and the $100 in the account is not enough to cover the check for the lawn mowing high school kid (which may be the only job other than bus boy that a high school kid can legally do for you) much less the processor......
Lord knows I am the rah-rah section usually - however your initial post told me you are thinking you can do more than 6 people. As for the whitewater rafting, hate to give you the bad news, but rafting numbers are down. I believe the peak year was 2002 or 2004 (just heard it this week from the premiere rafter in my state). He did it all but started on the "ground floor" of the industry and built up - and this year 4 of the rafting companies merged for survival and he was part of the merge.
Dream, but get real with it regarding just what 2 people can do in a 24 hour day with 7 days in that week and 31 days in many months. Good luck. Keep dreaming, just scale it back a bit.

 

[swirt]

I agree with what the others have said. You have some great ideas, but none of them are small. They are all pretty grandiose and it sounds like you may be underestimating the time that it takes to do each of the things you plan on doing in a day. You'd need staff, and in order to have staff, you need to be making a profit. The margins for many B&B's (even the successful ones) are pretty small.

 

[user 26]

okay, now that we have all dampened your dreams a bit ... i just want to say DREAM BIG, start small. you need lots of enthusiasm and a little bit of stars in your eyes to take this on. we all do!