Buying or selling an Inn or Bed and Breakfast can be a complex process. The purchase of a bed and breakfast almost always requires that buyers obtain mortgage financing. Lending practices have certainly changed since the 2008 “crash”. The good news is that mortgage rates remain low and many lenders like Bed and Breakfast Inns. So what do lenders’ want in order to write a mortgage loan on a Bed and Breakfast? In a nutshell:
- Buyers who are financially qualified to purchase the Inn.
- Sellers who provide clearly documented financial records of the Inn.
- A selling price for the Inn that is reasonable.
An expert inn broker will work with the sellers and buyers to prepare a financial portfolio for lenders that documents the buyers’ qualifications, the Inn’s financial history, and the market value of the Inn. (Read about Marketability Assessment and Valuation ). There is more to know, of course, but knowing these essentials is a good place to start! Questions? Contact Eliot.