Monday, December 2, 2013
Separate owner's home with fireplace, 3 bedrooms, 1 bath is an added bonus!
Offered at $525,000. Visit the listing page on my website for more details.
Friday, November 29, 2013
Ten rooms, spacious owner's quarters, strong business, prominent location in a destination location. For more details, visit the listing page on my website.
Friday, November 22, 2013
Congratulations to my clients and new innkeepers, Russ & Meg and to my colleague Rick's seller, Margot. We wish you all the best in both of your future endeavors!
Sunday, November 17, 2013
We just returned from the New England PAII conference held at Mount Snow outside of Brattleboro, VT. This was my second PAII conference (my first was the annual held in Vegas, January 2013) and second time as a workshop presenter. We're headed to Charleston, SC in January for the annual conference which should be a nice little escape from the weather in Maine (although I love snow, yes, that's right!).
The advocacy and support that this organization provides is unparalleled. And the planning that goes into these events, to educate and support our industry is greatly appreciated. And I'm honored to be a part of it!
|The B&B Team at the trade show (most of us, we're missing a couple)|
|The amazing women on the staff of PAII!|
Ingrid, Michele, Brook, Isabel & Donna
|Jay Karen, the President of PAII, with the Beekman Boys!|
|Deneen Pottery Mugs|
|Rick Wolf and Peter Scherman holding one of the workshops|
|Our bus ride (with Jay Karen!) headed to our night out in Brattleboro, VT|
We work hard AND have fun!
Tuesday, October 8, 2013
Would you go to a cardiologist if you're having problems with a swollen ankle?
Or take your watch to be repaired by a seamstress?
Then why would you go to a lender who doesn't deal in the hospitality industry?
A little dramatic, yeah, but you get my point!
There are many reasons to speak with local lenders when considering your lodging purchase but here are five pretty strong ones:
- THEY KNOW THE INDUSTRY - One of the most important is that a lender with a reasonable hospitality loan portfolio knows the tourism industry (and the local tourism) and associated lending risk. They understand this "lifestyle job" and that depending on the size of the property, it may not provide a big paycheck in the end. But it does provide a nice lifestyle and many of the innkeeper's living expenses are passed through on the income taxes as a certain amount is perfectly acceptable to the IRS.
- TAX RETURNS - In that same regard, these lenders know how to abstract a lodging property's tax return. They understand what personal expenses might be typical for an innkeeper to pass through to the corporation. This is not being less than honest to the IRS, rather an understanding that a portion of your mortgage, utilities, food, etc are being paid by the corporation but you may not be taking a large salary either. If you had a home, a job offsite, you'd get a paycheck, pay your mortgage, utilities, food, etc. from your income. With a hospitality property, a certain percentage of the business is being used by you as your home and living. This is taken into account when doing your income taxes and is understood by both lenders and appraisers well versed in hospitality.
- SEASONAL PAYMENTS - in some seasonal tourist locations, lenders understand the short window innkeepers have to make their money, often May through October. Local lenders understand this and some offer seasonal mortgage payments, where the annual mortgage is made in 4 installments, for example, paid in July, August, September and October, when the income is the strongest. Not only does this alleviate any possible concern on the lender's part, but helps some innkeepers who prefer not to budget for monthly payments either when they're closed or when business is much slower. This also helps buyers who have missed getting into the business before the busy season but want to close in the off season - ask the lender about seasonal payments. They might be willing to defer your first mortgage payment until the busy season starts. Lenders who aren't in hospitality won't usually play this game.
- THEY GET TO KNOW YOU - working with local lenders who know the community, know the tourism and get to know you and how you're handling your business are more willing to make things work for you down the road (if you need a loan, equity line, future purchase, etc). Sometimes when I refer clients to a couple of my local lenders (with whom I did business), my clients always come back and tell me that the lender commented about being pleased that they're working with a broker who knows her stuff as a former innkeeper! Why? Because they knew what I did with my business. They have a level of confidence with a client who proves they did what they told the lender they'd do in their business plan!
- KEEP IT LOCAL - this movement of supporting local business goes beyond the local farmers and retailers. Lenders support the local businesses that support them. It's pretty simple.
Wednesday, September 25, 2013
Congratulations to the buyers, Katja and Siobhan and sellers, Rick and Jane! The B&B Team, Inn Consultants and Brokers was proud to represent both parties (Rick Wolf represented the buyers, I represented the sellers). We wish them all the best in the next phase of their lives!
Wednesday, August 21, 2013
The commercial and residential real estate markets are two different animals. Commercial real estate relies on valuation based on the performance of the business while residential real estate relies on the performance of the market, or what the buyer is willing to pay and can afford to pay.
We've heard for years now that the commercial market would bounce back much later than the residential market. And if you understand the fundamentals of the commercial market, you'll understand why this makes perfect sense.
What has held the commercial buyer back over the past several years has been their ability to sell their home in order to have the funds to buy a lodging business. But with indications of an improving economy and growing consumer confidence, the lodging buyer has been more successful in selling their home in the past year, more or less, and is now ready to push full steam ahead on the next step in their plan. Buyers have accepted the "new today" and realize that their assets are worth what they're worth, and in all likelihood they're only going to get better. Some have decided to reinvest their 401k's or retirement funds by a self directed IRA or something similar and are in a position to move forward now rather than wait.
When a commercial property sells, the gross revenue multiplier (GRM) and cap rate are considered. We take the sale price and divide it by the gross revenue (without sales tax) and come up with our GRM. We take the sale price and divide it by the net operating income (NOI) and come up with our cap rate. As buyers are willing to pay more and more, these indicators will slowly improve over time.
This might explain why I'm working with more buyers right now than I ever have before....and I'm ready. Bring it ON!