Introduction
Buying a bed and breakfast is probably the biggest purchase you will ever make. Approach it wisely so it’s not the biggest mistake you ever make. The horror stories I can tell you about B&B sale transactions would make your toes curl (and I will share some “horror stories” throughout this Quick Guide to help illustrate my points). The purpose of this Quick Guide, as well as my other Quick Guides, eBooks, and seminars, is to help you make your B&B career be the most profitable and enjoyable possible
I think education is vital to any new business venture one takes. B&B innkeeping looks easy, so too many people enter into the business without learning anything about it first. Buying a B&B seems like it would be as easy as buying a house, so way too many people proceed without education or professional assistance. At the very least I hope you’ll put this Quick Guide to good use and at the very least ask lots of questions. Keep asking questions until you are satisfied that you have the information you need to make a decision or take an action. Ask the same question of several people, compare the answers, and then ask about the differences you find in the different answers.
To help make this the most valuable resource for you that I can, I have elicited input from B&B Brokers around the country. I was a B&B broker for over twelve years, but only in Colorado. Because you may have interest in another part of the country I want you to have expertise from other parts of the country, hence the collective mind of experienced B&B Brokers.
I’m differentiating between real estate broker and B&B Broker because a B&B Broker has so much more background and experience in the sale of bed and breakfasts than a general real estate broker. The majority of the problems I’ve heard about in B&B transactions has been when a general real estate agent has been involved, not someone with B&B experience. Regardless of how much B&B experience the broker you hire has, don’t relinquish too much power to them; stay in control and check all information you get during your process of searching for and buying your B&B. Communication is challenging in the best of conditions; you need to ensure you and your broker understand things the same way, and that the understanding is correct. There are lots of details to know about and tend to in a B&B transaction to make it go smoothly for both seller and buyer. Not only should you know as much as possible about the transaction, but so should the agent you are working with.
This checklist doesn’t replace your need for a professional inspection, but it helps guide you as you search for your bed and breakfast. My suggestion is to do a cursory examination as you first see each property. If the property passes initial reviews, when you return for a second exploration do a more thorough examination using this form more completely.
A note about inspectors. First, look for a certified inspector. You can find them at the and American Society of Home Inspectors (ASHI) – http://www.ashi.org and. National Association of Home Inspectors (NAHI) – http://www.nahi.org. If you don’t have such an inspector in your area find one with lots of experience and who gets referrals from REALTORS and buyers/sellers alike.
Some inspectors are deal breakers. They find inconsequential problems to tell the Buyer about, getting them concerned and anxious. An inspector who is a deal maker is one who finds the big issues, the ones that are dangerous or costly to repair or replace, and tells the Buyer about that, leaving the inconsequential issues as side notes. Big and small issues should be noted, but the small issues should be asides and the big issues should be front and center.
I’m sharing a checklist that is a compilation of inspections I’ve seen done on various B&Bs around Colorado. And I’ve added comments of my own to round it out to a sound checklist for your use.
The way I suggest you use this checklist, which again is one technique to help remove those rose-colored glasses that most Buyers wear, is to make notes as you tour inns you are considering buying. Mark beside each item “Poor”, “Fair”, “Very Good”, and “Excellent/New”, and then enter pertinent notes. If you have a checklist for each property you can keep track of each inn’s condition, a tool that will help you sort through your choices later.
This list may be over kill, but it gives you something to work with to make sure the property lives up to your expectations. This list will get you to thinking about your operation_s, guest comfort and cash flow. It’s not an exhaustive list of possibilities, but it’s a good start.
DIRECTIONS:
1. Go through this kind of inspection for each B&B you inspect.
2. Copy or print the pages for the Guestrooms and Bathrooms so there are enough for each inn you see.
3. Use your still and/or video camera, with the owner’s permission of course, to record what you see – these properties will start to meld after a few tours.
4. Take good notes so when you are paring your list the notes with pictures will help you remember each inn.
DO NOT USE THIS INSTEAD OF A PROFESSIONAL INSPECTOR!!!
This is a sample from the Quick Guide “B&B Buyer’s Inspection Checklist”. Click here to order this eBook and others in the Series.