New construction B&B?

[kris_pip]

Hello all!
I have been lurking for a while, and am now hoping that I could get your wise advice regarding an idea my husband and I have for a new B&B. We are currently city professionals, and want OUT! We are yearning for the peace of a mountain location, want so very much to work for ourselves, and absolutely love meeting and entertaining new people.
Our idea is to build a B&B (which would be more like an Inn or Resort/Retreat) with 7 bedrooms in the main house, and small cottages scattered throughout the property (approximately 3 acres). We want the house to be new construction and styled like an upscale ski lodge. We want to personally host and guide hiking, caving, white-water rafting, rock-climbing, etc. We would like to eventually add dinner options (breakfast would be initially included), spa services, on-site winery/vineyard, and wedding/corporate event planning and hosting. In other words, the B&B is the reason to visit the B&B (though we would be close -- 10 minutes or so -- to towns which do attract tourists, artists and academics).
We envision buying a mountain property and buildling the main building first. While we get on our feet, we hope to do everything ourselves while one spouse continues to work part-time and contract out housekeeping/laundry services. When we are confident we can make a living, we hope to then hire full-time staff (1-2 assistants to help with reservations, cooking, weddings/events, tours) and contract out housekeeping and spa services.
A couple of questions:
1) Has anyone built a B&B (new construction)?
2) Is this really a B&B, or more of a hotel/resort?
3) Are we ridiculous to think that we could save up enough $$ in 5-7 years to do this?
4) Are we ridiculous to think that we could earn a good living doing this if all our visions come to fruition?
5) Does anyone hire a housekeeper or contract out housekeeping services?
6) Did anyone bite the bullet and quit their job to start a B&B/inn? If so, how much $$ do you think you should have saved up as a cushion while you are trying to get on your feet?
7) Does it seem like we have unrealistic expectations here?
8. Did anyone build a separate home on the property for private living quarters?
Any insight you all can provide us much appreciated. This is my dream -- I don't think I can take my current job much longer. I really would like to see this come true, but make a comfortable living at the same time. We're still young and haven't even started a family yet. I just want to know if I'm being outlandish in thinking I could make this happen.
Thanks!
K&P

 

[EmptyNest]

Welcome and can I say wow!!! THis is a REALLY TALL ORDER!!!
I think you need to read some of the past posts here. that will give you some insight. We were going to build a place, but we finally found one that we wanted.
There is NO WAY you can do it all yourselves if you have 7 rooms and want to do as much as you do.
Depending on your jobs...but my guess is that if you can save say A couple hundred thousand in 5-7 years..maybe you could.... What you are talking about will take REALLY BIG BUCKS and given the market right now...I am not very optimistic. Have you even looked at prices for places similar to what you are thinking about??? At least 3 million + !!!! And no one is going to give you the $$$$
Sorry to be a the eternal pessimist..but this to me just not sound like you have really thought this out enough. Do more reading and more research, start putting a real plan together to see if maybe something a little less ambitious might be possible to start out with and then build on that later.
Best wishe!

 

[Morticia]

For all that you want to do- guided hiking, caving, etc you cannot have one person 'working' while the other handles the rest of that list you have there.
Frankly, I think I work too hard at this biz. I'd like to have time to personally guide hiking and kayaking adventures of 3-4 hours in duration. OK, so let's say I do that...who greets the incoming guests? Who checks-out the guests who are leaving? Who plans the meals?
You are talking staff of 3-4 at LEAST because THEY will be doing all the meeting and greeting while you are out adventuring. If a housekeeper bails on you? Who cleans? That's why you need 3-4 staff. I'm thinking more staff, actually. If you want this to be what you are envisioning, you need more than 3-4. You need more like 10. Someone has to cook, clean, prep food, buy groceries, laundry, check-in and out, marketing, repairs, guest relations. If you want to be the 'hostess' you cannot be doing any of those other tasks with a place that size.
Can you save $3 million in 5-7 years? Will selling your apt or condo bring in that kind of money?
With a plan you can do anything you set your mind to. It sounds like you've given thought to what you want to do!
A suggestion...if you can, take a month off work, or telecommute, and MOVE to the town you want to do this resort in and stay there for the month. Can you stand it? DO you miss everything you think you hate now? A weekend or week's vacation is a great thing, but LIVING in an area is something else altogether.

 

[inncogneeto]

Maybe you should do a vocation vacation first!
Where are you going to find a mountain town with a climate for vineyards that is close to a city? Better figure out your location first.
With that size of an operation, you'd be better to contract a cleaning service to come in...it is unrealistic to think you will be doing this by yourself and all of the touring, you'll be running your business, leave the touring to tourguides...you'll be lucky to have a vacation day to do any of that! You will need a full time staff to do all the things you are aspiring to, it all sounds wonderful, but it may be a bit more than you will be able to chew, an inn alone is an entity unto itself... Read the threads about trying to find reliable help...
And remember, this is a 24/7 job, those weekends you look so forward to right now, kiss them goodbye, you don't have weekends anymore.
I personally don't know any rich inkeepers...rich in spirit, yes, rich in cashola, no....
If you are independently wealthy, you could do this easily...and if you don't listen to anyone who tells you all the things you can't do and just do it, you can probably still do it (we did!)

We up and left our jobs, home and life of 30+ years and moved 1000 miles away to do this and 24 days later we were on our way to being innkeepers, with absolutely no experience and not one seminar under our belt, we learned by doing and 18 months later...we are a 5 dot (20 reviews on bandb.com) and 5 star TA inn (14 reviews) . I think are lucky, we are creative, adaptable, think outside the box people, but we work very hard.
Better make sure one of you knows how to do small and large home repairs! Can you or your SO repair a water main? You know for when the only plumber in your mountain town is an hour away, you have a full house of guests and the main bursts, and now you have no water? And that same plumber never shows and by the time he calls 3 weeks later to apologize, your SO has fixed it himself, thank God for Home Depot and Lowes, which are an hour away from your mountain town and you had to take 6 trips to get the right parts and they still aren't right but they are working..for now... but then two weeks later, you have to dig out the pipe a second time because it bursts again after you backfilled, only now it's raining so the mud is 20 tons per shovel and you are crying and yelling as you dig it out AGAIN and the plumber can't come AGAIN, because his truck broke down? Sounds fun, huh? Oh, yeah and you almost had to send all of your weekend business to the inn down the road, because you still have no water and it's 10:00 at night, but luckily those "what would otherwise would have been classified "PITA guests"" are late (for once you rejoice!) but your DH is Superman, he fixes it just in time. You got one of those spouses? Sure hope so!
Poor Seashanty often has to fix those kinds of things herself! Read the posts!
We budgeted a year to get everything ready to open and to upgrade, but we were, again, lucky, we hit the height of the housing market and had a good solid cushion. We opened 3 months early, our only regret being that we did not finish our OQ before we opened, we are still trying to get it done. I highly recommend building a separate OQ, you will enjoy your privacy.
Read the threads on doing this business with a family, you may want to wait until your kids are old enough to handle it, unless you are budgeting in a full time nanny too.

 

[egoodell]

Well, for one thing I know an innkeeper that built cottages for her B&B and then regretted it as it was double the work hauling all the cleaning stuff from one to the other and just about killed her cleaning. I would make it one building with the rooms. You would have to have cleaning help and the harder it is to clean the harder it will be to keep help. That's the most difficult to find and keep.
We built new but we didn't have big jobs or savings. We blew our wad buying the land. We built the main building and one wing so are currently booking two suites until we can get the permits and money to build the other wing. Our county only allows 5 rooms but with our wine tours, that's all we can handle. I believe we built our main building and renovated the brick cottage into a wing for something like $150,000 with my husband and brother doing most of the work except for electric and plumbing. That's with inside contacts. I think we were told it would have cost $350,000 if we would have had it built and this was back in 2002 I believe. And we are NOT LARGE.
The positive thing about tours is that you are earning the same money as rooms for less time and overhead. But for what you want to do check the liability insurance costs. I don't even want to THINK what the insurance costs would be for rock climbing, white water rafting, etc. ***shudder***. I pay something close to $3000 per year just to DRIVE people around in two vans. And I shudder to think of the lawsuits should someone get seriously hurt or died in an accident. Don't think that a legal document signed prior to the trip will protect you, either. I'm afraid to even supply bicycles.
As the others say, if our tours are booked by outside guests, we do have a wonderful innsitter who comes and turns rooms and greets the guests and babysits their needs until we get back at 6pm. I can handle it after touring all day, but would not be able to after rock climbing or white water rafting all day.
You would be best suited to have the B&B and package with other services to avoid the liability and time involved to do all that. Your're pretty much talking about running several businesses at once: a B&B, a white water rafting company, a rock climbing company.....
In essence, you are talking about a resort, not a B&B.
Riki

 

[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 ...)

 

[IronGate]

Seems to me there are too many businesses going on here, especially if you want to handle them all yourself. Reading between the lines, I would say that you would be most excited by having an adventure company. Perhaps you could establish a relationship with one or more B&B's in your proposed area where you pick up the guests after breakfast and take them out for the "adventure du jour", providing lunch and/or dinner as part of your service, and then bring them back to the B&B. The B&B could help sell it as a package. You could have a different adventure each day, so guests always have something new to do.

 

[IronGate]

Maybe you should do a vocation vacation first!
Where are you going to find a mountain town with a climate for vineyards that is close to a city? Better figure out your location first.
With that size of an operation, you'd be better to contract a cleaning service to come in...it is unrealistic to think you will be doing this by yourself and all of the touring, you'll be running your business, leave the touring to tourguides...you'll be lucky to have a vacation day to do any of that! You will need a full time staff to do all the things you are aspiring to, it all sounds wonderful, but it may be a bit more than you will be able to chew, an inn alone is an entity unto itself... Read the threads about trying to find reliable help...
And remember, this is a 24/7 job, those weekends you look so forward to right now, kiss them goodbye, you don't have weekends anymore.
I personally don't know any rich inkeepers...rich in spirit, yes, rich in cashola, no....
If you are independently wealthy, you could do this easily...and if you don't listen to anyone who tells you all the things you can't do and just do it, you can probably still do it (we did!)

We up and left our jobs, home and life of 30+ years and moved 1000 miles away to do this and 24 days later we were on our way to being innkeepers, with absolutely no experience and not one seminar under our belt, we learned by doing and 18 months later...we are a 5 dot (20 reviews on bandb.com) and 5 star TA inn (14 reviews) . I think are lucky, we are creative, adaptable, think outside the box people, but we work very hard.
Better make sure one of you knows how to do small and large home repairs! Can you or your SO repair a water main? You know for when the only plumber in your mountain town is an hour away, you have a full house of guests and the main bursts, and now you have no water? And that same plumber never shows and by the time he calls 3 weeks later to apologize, your SO has fixed it himself, thank God for Home Depot and Lowes, which are an hour away from your mountain town and you had to take 6 trips to get the right parts and they still aren't right but they are working..for now... but then two weeks later, you have to dig out the pipe a second time because it bursts again after you backfilled, only now it's raining so the mud is 20 tons per shovel and you are crying and yelling as you dig it out AGAIN and the plumber can't come AGAIN, because his truck broke down? Sounds fun, huh? Oh, yeah and you almost had to send all of your weekend business to the inn down the road, because you still have no water and it's 10:00 at night, but luckily those "what would otherwise would have been classified "PITA guests"" are late (for once you rejoice!) but your DH is Superman, he fixes it just in time. You got one of those spouses? Sure hope so!
Poor Seashanty often has to fix those kinds of things herself! Read the posts!
We budgeted a year to get everything ready to open and to upgrade, but we were, again, lucky, we hit the height of the housing market and had a good solid cushion. We opened 3 months early, our only regret being that we did not finish our OQ before we opened, we are still trying to get it done. I highly recommend building a separate OQ, you will enjoy your privacy.
Read the threads on doing this business with a family, you may want to wait until your kids are old enough to handle it, unless you are budgeting in a full time nanny too..

. . .
Where are you going to find a mountain town with a climate for vineyards that is close to a city? Better figure out your location first.
. . .

The Grand Mesa and Grand Junction, Colorado area is just such a place, with world-class wineries. Willow Pond can probably tell you more.

 

[JunieBJones (JBJ)]

Welcome to the forum!
Lots of questions, your responses will be very lengthy. #1 answer would be - if you build it they will come? That is a misconception. Marketing takes $ and time. You can't expect to go through all of that (you mentioned the saving, working, building, etc) and have them knock your doors down.
From there you get to the financial part of my answer. How much do you need set aside to live and operate the B&B after open? Well that depends on how high your mortgage is, overhead and of course, that depends on how much you save and where you build your dream. location is key.
What you have described is very possible and many have done it. But costly. Very costly. If you look online you will find many such places for sale.
I would definately build it in stages. And of course, when you start building you will realize this is probably the only way possibly anyway, unless you hire in the whole job.
There are not many B&B's that are "the reason to visit the B&B" so don't be fooled into putting yourself out as a destination with nothing else to draw your guests to you. You will need other things there or nearby your place - recreation, history, other wineries with festivals, restaurants, shopping, etc.
All the best.

 

[IvyLee]

I'm not certain this would work financially. For arguments sake, lets say you can get a 30 year fixed rate mortgage at 5.75 for 980,000 (80k for land 900k for building and setup). You're in for $5,719.00 a month before you even have the lights on. If you have 7 rooms and again for arguments sake, let's say you can get $150 USd per room (I know that's a bit on the low side but any mythical place you can get a piece of buildable land with water and sewage for 80K will probably not be a hot destination). at $150 USd per room, you'd need to book 38 nights a month 12 months a year, just to pay your mortgage.
Now add in everything else it takes to run an inn: food, water, taxes, help, etc. etc. and you see that this isn't financially viable really. I think the estimate for the land is really low as well. For example, New Paltz NY, which is a funky little college town, surrounded by some of the best rock climbing in the US (The Gunks! I climb there all the time) , has a climate suitable for growing wine grapes, rivers and trails, and is 90 miles from NYC a decent buildable lot of a few acres will set you back at least $200k, and anywhere you could build a 7+ bedroom inn probably won't have water/sewage/electricity. Throw in the cost of an architect and the number gets even more unreasonable.
The other large hurdle is getting a mortage or loan for something like this. There's no way anyone will lend you the money, it's way too risky of an unrecoverable investment. Plus, as we all know the whole mortgage industry is the shakiest it's ever been. All of the very large inns and small hotels that are new constructions are privately backed by investment groups, and are almost never owned by the inkeepers themselves.
You should investigate a smaller property, especially one that has a proven track record of being profitable, which would be a more realistic way to make some changes in your life. Believe me, I sympathise, I'm a born and raised NY'er who didn't even see the woods until I was 20, so I understand the 'Escape the City' feeling, you may just need to adjust the way you make that happen.

 

[stephanie]

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

 

[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.

 

[stephanie]

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.
.

Oh no, not all! There are some great ones on the market. Retirees, family situations, etc. Should have qualified that by saying "not many within our price range that have the number of rooms we want."
And what the bank considers a good net income stream is apparently 30% of gross. Don't know what it is they like about that number. I've seen some profit margins that I'd be happy with, but not that high.

 

[EmptyNest]

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 ...).

For that size of a building and where are you living..you need owners quarters as well. You are dreaming if you think you can build it for $900K SORRY... Do you want HGTV???? And in this day and age..don't even think about SBA....so much hassle and I doubt it would get you anything.

 

[EmptyNest]

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.
.

Oh no, not all! There are some great ones on the market. Retirees, family situations, etc. Should have qualified that by saying "not many within our price range that have the number of rooms we want."
And what the bank considers a good net income stream is apparently 30% of gross. Don't know what it is they like about that number. I've seen some profit margins that I'd be happy with, but not that high.
.

"not many within our price range that have the number of rooms we want."
That is because the number of rooms you want will never be found for your price...at least in a prime location:-(

 

[stephanie]

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.
.

Oh no, not all! There are some great ones on the market. Retirees, family situations, etc. Should have qualified that by saying "not many within our price range that have the number of rooms we want."
And what the bank considers a good net income stream is apparently 30% of gross. Don't know what it is they like about that number. I've seen some profit margins that I'd be happy with, but not that high.
.

"not many within our price range that have the number of rooms we want."
That is because the number of rooms you want will never be found for your price...at least in a prime location:-(
.

Eh, yes and no. We've found a couple hopefuls, but there's always something a little wrong. You know how it is. Anyway, if it's making 30% profit (including the mortgage!) and under 2 hours from a major East Coast metropolis, there's not much under $1 million because you're paying for real estate AND business. The "good deals" are the ones that are just trying to get out, and quick. Of course, there's a few I've got my eye on that could work.
I'd love to start from the ground up, but with commercial loans the way they are these days, probably not an option for us.
Chin's still up, though! We're narrowing down now... May be heading down your way soon ;-)

 

[stephanie]

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.

 

[user 26]

i think it would be better to purchase an existing place. a lodge of some kind that has trails and has the capability to house people.
i stayed at an aging place in new hampshire that had guest cottages, the 'main house', a facility for weddings, lots of woods, trails, swimming, near golf ... we couldn't find the place at night because the sign pointing to the road they were on was just the name painted on a big rock! unlit of course. the furnishings looked like they had been their since the 60's. well, it was recently purchased by folks who saw it for the gem it is and are making it into an amazing place.
surely there must be places, maybe rundown, in need of tlc, with the BONES of what you dream of. preferably one where the location calls to you. and with a business already in place so you don't have to jump through hoops to get zoning and then find out you can't have it.
think about it.

 

[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.

 

[Morticia]

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.
.

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.

Let me tell you a funny little story...we took about a year to find this place. Hubs is an engineer. You can read that to mean he had spreadsheets and weblinks and 5 brokers working for us. He fizzled out. 'We've seen everything. No one is calling with new properties. We need to change our plan and get jobs.'
No way was I going 'to work' again. I'd had my own biz for a couple of years and was working PT at a hospital. Absolutely hated it.
Cut to the chase...he says there's nothing out there, I say I'm not going back to work FT. I sit at the computer and Google 'b&b for sale Maine' and the place I now own pops up. It was just what we wanted. In town, making money, nice property.
All that to say that you can watch the websites, but sometimes the right place just pops up. Hope JBJ has some good insider info!