Selling due to Health Issues - Question?

[InnDeep]

Hi all,

We are sadly selling because my post stroke complicated migraines have become much worse (I get numb on one side and can't see straight). My doctors say 'no more stress'. Over the years since we bought our Inn, I've had to hire more staff to cover me in the kitchen and house which has affected our profit numbers some. We are still doing well though and are the #1 rated B&B on our island. We've put a great deal of work into the Inn in the 4 we've owned it, upgrading almost everything and doubling the income. So sad to sell, but I just can't do it anymore.

Anyway, my question relates to the sale, we've hired a local realtor -the one we originally bought the Inn through, but she is sending our P&L's out to interested parties after confidentiality agreements are signed before they see our Inn? Is that the right thing to do? Our numbers are decent, but definitely affected by the need for extra staff since my husband works FT and I'm sick, plus the fact we've been driving profit straight back into improving the Inn. Shouldn't prospective buyers be required to at least see the property first and have these things explained? Any thoughts from anyone? I thought about listing with a specialized Inn broker, but it was off-season for us and I wasn't sure what was entailed.

 

[brookemccarthy8]

Hi there!

I am so sorry to hear this-- I am sending you the kindest of thoughts. I have a life-long dream of owning a B&B, and Miss Molly's looks magical. I understand having to go through your realtor, but I would love to be able to chat with you about your experience of owning a B&B in the Mid-Atlantic while I embark on this journey myself. If you would be interested in giving me a few minutes of your time, my email address is [email protected]. I would be so grateful.

Have a wonderful weekend,

 

[Tamelon]

Hi all,

We are sadly selling because my post stroke complicated migraines have become much worse (I get numb on one side and can't see straight). My doctors say 'no more stress'. Over the years since we bought Miss Molly's Inn in Chincoteague, I've had to hire more staff to cover me in the kitchen and house which has affected our profit numbers some. We are still doing well though and are the #1 rated B&B on our island. We've put a great deal of work into the Inn in the 3.5 years we've owned it, upgrading almost everything and doubling the income. So sad to sell, but I just can't do it anymore.

Anyway, my question relates to the sale, we've hired a local realtor -the one we originally bought the Inn through, but she is sending our P&L's out to interested parties after confidentiality agreements are signed before they see our Inn? Is that the right thing to do? Our numbers are decent, but definitely affected by the need for extra staff since my husband works FT and I'm sick, plus the fact we've been driving profit straight back into improving the Inn. Shouldn't prospective buyers be required to at least see the property first and have these things explained? Any thoughts from anyone? I thought about listing with a specialized Inn broker, but it was off-season for us and I wasn't sure what was entailed. Here is the listing for context: https://www.realtor.com/realestatea...ague_VA_23336_M61741-80792?from=srp-list-card

I'm so sorry to hear about why you are selling. I recently sold my own b&b because I became a caregive to my daughter who also had a stroke. I too found this a complicated issue, as for two years prior to selling I had to hire a full-time innkeeper. You can ask your broker not to send the p&l to anyone who hasn't seen the property. You can also provide a note of explanation to accompany it, which I did. Once the additional labor costs were extracted, I could make a good case for profitability.

I had a quick look at your listing and have a few thoughts, if I may. It does appear that it is being sold as a single family home and not a commercial entity. That's ok, just realize that the sale doesn't necessarily include the business and you should know what value the business assets (name, reputation, email list, etc.) have by speaking with a business attorney. This should be discussed in advance with any buyers. I also think you need a better primary photo; the one used is blurry and does not show the gorgeous house to its best advantage. The interior shots however are lovely.

Feel free to email me at tamehlin@gmail if I can be of any assistance!

 

[CSMaine]

Having gone through a sale recently, I understand your concerns, especially regarding NDA's and the info distribution. If there is a way to PM on this site, I would be happy to share more of our experience. Wish you the best on the sale endeavor.

 

[marj]

As a realtor that recently purchased my Inn, I agree with Tamelon - why as a single family home? If they are listing as single family then they should not be sending out your P&L - for all you know it could be a competitor asking! Agent should have wording similar to this -

Financials are available with a signed confidentiality agreement after an offer has been presented. Or maybe when proof of their financial ability is presented to you?

 

[scottcrumpton]

Disclaimer: I've owned White Stone Marketing for thirty years and White Stone Brokers for two years. As such, anything I say is biased but also based on a lot of industry experience. If you look over anything I've written in these forums I think you'll find I do my very best to be honest and to give advice for your benefit.

Important Note: There are four prices for every business. The price the seller thinks it's worth, the price the listing/seller's agent thinks it's worth, the price the selling/buyer's agent thinks it's worth, and the price the buyer is willing to pay (regardless of what they think it's worth). Notice that I used the word "think" a lot as basically everyone is guessing at the value. The difference is in the experience of the person guessing as some are simply blue sky numbers and others are educated valuations based on formulas and experience.

Residential realtors can guess what your house and property are worth based on other nearby houses that have sold. They will generally give you a very low price so that it sells in a day. Everyone cheers this and I think it's tragic as in my opinion if you can sell something the day you put it up for sale, you obviously set the price too low. What a standard realtor can't begin to do is determine the value of your business so I never understand why innkeepers use them to sell their inns (unless they're simply selling it as a home).

Real estate attorneys are better but they still don't know anything about valuation. You'll need one involved to sell your business but their value is in the contracts and law, not the business valuation, marketing, etc.

Business brokers are great at helping people sell businesses but they don't understand our industry nor inns so while they're better than either of the above, their expertise is more general.

Inn brokers know the industry, how to value your property and business, how to market your inn for sale, how to attract and qualify buyers, how to work with attorneys, who to give your financials to, and more importantly, who not to. If you're selling your inn as a business, you need an inn broker, and your selling yourself short if you don't use one.

For what it's worth...
Scott Crumpton

 

[gillumhouse]

InnDeep - I am so very sorry to hear of your health problems. Scott is right (and so are the others regarding your P & L - information NO ONE other than a serious BUSINESS buyer should have). That is a violation of your privacy and the realtor should be "called on the carpet" about it if you are selling as a residence.

 

[Tamelon]

Just FYI

Disclaimer: I've owned White Stone Marketing for thirty years and White Stone Brokers for two years. As such, anything I say is biased but also based on a lot of industry experience. If you look over anything I've written in these forums I think you'll find I do my very best to be honest and to give advice for your benefit.

Important Note: There are four prices for every business. The price the seller thinks it's worth, the price the listing/seller's agent thinks it's worth, the price the selling/buyer's agent thinks it's worth, and the price the buyer is willing to pay (regardless of what they think it's worth). Notice that I used the word "think" a lot as basically everyone is guessing at the value. The difference is in the experience of the person guessing as some are simply blue sky numbers and others are educated valuations based on formulas and experience.

Residential realtors can guess what your house and property are worth based on other nearby houses that have sold. They will generally give you a very low price so that it sells in a day. Everyone cheers this and I think it's tragic as in my opinion if you can sell something the day you put it up for sale, you obviously set the price too low. What a standard realtor can't begin to do is determine the value of your business so I never understand why innkeepers use them to sell their inns (unless they're simply selling it as a home).

Real estate attorneys are better but they still don't know anything about valuation. You'll need one involved to sell your business but their value is in the contracts and law, not the business valuation, marketing, etc.

Business brokers are great at helping people sell businesses but they don't understand our industry nor inns so while they're better than either of the above, their expertise is more general.

Inn brokers know the industry, how to value your property and business, how to market your inn for sale, how to attract and qualify buyers, how to work with attorneys, who to give your financials to, and more importantly, who not to. If you're selling your inn as a business, you need an inn broker, and your selling yourself short if you don't use one.

For what it's worth...
Scott Crumpton

Scott, I appreciate what you are saying. However, I was unable to find an inn broker interested in my small property; two said I should go ahead and sell as residential as selling with the business would add only a tiny percentage (3% or so) to the value. As I recall, there's a formula of about 5x revenue for the sale price of a bnb - which is exactly what I received selling as a residence. I then was paid additionally for my email list. I did not sell the name/logo intentionally.

 

[gillumhouse]

Disclaimer: I've owned White Stone Marketing for thirty years and White Stone Brokers for two years. As such, anything I say is biased but also based on a lot of industry experience. If you look over anything I've written in these forums I think you'll find I do my very best to be honest and to give advice for your benefit.

Important Note: There are four prices for every business. The price the seller thinks it's worth, the price the listing/seller's agent thinks it's worth, the price the selling/buyer's agent thinks it's worth, and the price the buyer is willing to pay (regardless of what they think it's worth). Notice that I used the word "think" a lot as basically everyone is guessing at the value. The difference is in the experience of the person guessing as some are simply blue sky numbers and others are educated valuations based on formulas and experience.

Residential realtors can guess what your house and property are worth based on other nearby houses that have sold. They will generally give you a very low price so that it sells in a day. Everyone cheers this and I think it's tragic as in my opinion if you can sell something the day you put it up for sale, you obviously set the price too low. What a standard realtor can't begin to do is determine the value of your business so I never understand why innkeepers use them to sell their inns (unless they're simply selling it as a home).

Real estate attorneys are better but they still don't know anything about valuation. You'll need one involved to sell your business but their value is in the contracts and law, not the business valuation, marketing, etc.

Business brokers are great at helping people sell businesses but they don't understand our industry nor inns so while they're better than either of the above, their expertise is more general.

Inn brokers know the industry, how to value your property and business, how to market your inn for sale, how to attract and qualify buyers, how to work with attorneys, who to give your financials to, and more importantly, who not to. If you're selling your inn as a business, you need an inn broker, and your selling yourself short if you don't use one.

For what it's worth...
Scott Crumpton

Scott, With this new set-up, I cannot figure out how to do a conversation with you. Can you do a conversation or just contact me? I have a question I want to ask off-forum. Kathleen - gillumhouse

 

[marj]

Disclaimer: I've owned White Stone Marketing for thirty years and White Stone Brokers for two years. As such, anything I say is biased but also based on a lot of industry experience. If you look over anything I've written in these forums I think you'll find I do my very best to be honest and to give advice for your benefit.

Important Note: There are four prices for every business. The price the seller thinks it's worth, the price the listing/seller's agent thinks it's worth, the price the selling/buyer's agent thinks it's worth, and the price the buyer is willing to pay (regardless of what they think it's worth). Notice that I used the word "think" a lot as basically everyone is guessing at the value. The difference is in the experience of the person guessing as some are simply blue sky numbers and others are educated valuations based on formulas and experience.

Residential realtors can guess what your house and property are worth based on other nearby houses that have sold. They will generally give you a very low price so that it sells in a day. Everyone cheers this and I think it's tragic as in my opinion if you can sell something the day you put it up for sale, you obviously set the price too low. What a standard realtor can't begin to do is determine the value of your business so I never understand why innkeepers use them to sell their inns (unless they're simply selling it as a home).

Real estate attorneys are better but they still don't know anything about valuation. You'll need one involved to sell your business but their value is in the contracts and law, not the business valuation, marketing, etc.

Business brokers are great at helping people sell businesses but they don't understand our industry nor inns so while they're better than either of the above, their expertise is more general.

Inn brokers know the industry, how to value your property and business, how to market your inn for sale, how to attract and qualify buyers, how to work with attorneys, who to give your financials to, and more importantly, who not to. If you're selling your inn as a business, you need an inn broker, and your selling yourself short if you don't use one.

For what it's worth...
Scott Crumpton

as a residential realtor, I completely agree with this.

 

[InnDeep]

I’m sorry not to have responded sooner here. My health got much worse for a while. Improving a bit now.

Still trying to sell our Inn, but the residential realtors strategy of showing our P&L’s to interested parties once they’ve come to see our Inn (where they see our high labor costs even though I did write an explanatory statment) has netted us exactly nothing except a bunch of tire kickers.

Over this winter we replaced our entire foundation and front porch and repainted the house on the realtor’s advice ($$$) - everything looks great, yet crickets. We are still raking in tons of 5 star reviews on Trip Advisor and are fully booked yet between infrastructure, labor and as we all know, food this year, costs remain high.

Since we are only a 6 room (5 rooms, 1 2 br suite property) I’m not sure an inn broker would even have interest in us. We’re listed residential bc we are zoned both residential and commercial so I guess the realtor didn’t want to lose out on a possible residential sale? I also don’t think she knew how to value the business as a part of the sale. As someone else mentioned, 5x our annual Gross is close to the residential value estimated by Zillow. I think our gross is somewhat low and someone else could make more with our inn if they were onsite all the time, but that’s neither here nor there. In any case, I’m close to giving up. It’s pretty depressing. If there are any thoughts I’d love to hear them. Thanks everyone.