Monday, August 9, 2010
Become an Educated Buyer - talk with a Broker!
I spent a great deal of time taking phone calls and emails from people who are just thinking about buying a bed and breakfast and want to know how it works, what the bank will want, how they qualify, etc. And because I have had recent sales in this economy, this year, I am aware of what the banks are looking for. The first thing you need to know is that you will need a minimum of 25% down, more if the property isn't performing to the bank's satisfaction. If you went the SBA (Small Business Administration) route, you could potentially put down 10-20%. But there's a lot to understand about how a hybrid business, such as a bed and breakfast, is valued by the bank, by the SBA, by the Seller and by you, the potential Buyer. That magical number you must all agree upon in order to get to the settlement table is imperative and your Broker and banker should give you the knowledge to fully understand all that's involved in making this wonderful lifestyle purchase.
So the next time you see a property that speaks to you, take it a step further...be open with your broker or meet with one to talk about representation so that you can discuss the financial end of things. It will save you precious time.