Inn Sale Story - How the Inn at the Canal Was Sold
The Inn at the Canal is a delightful 7 guest room Bed and Breafast Inn on Maryland's Eastern Shore. New Innkeepers Bob and Carol Roethke would love to be your hosts!
Recent changes in real estate values and lending practices have had a big impact on the process of buying or selling an Inn. But even in difficult economic times, Inn buyers and sellers can achieve their goals. The recent sale of The Inn at the Canal in Chesapeake City, Maryland is an excellent example.
The Inn at the Canal is an excellent property – an historic Inn, tastefully furnished and renovated, with an established business. It is the kind of Inn where guests relax and linger. The location, overlooking the water in a charming harbor town, is not far from major cities. With 7 guest rooms, the Inn can be owner operated, as most Inn buyers envision. Quality antiques and furnishings were included in the sale, making the transfer truly "turn-key."
The owners, Mary and Al Ioppolo, spent many years developing their business. They wanted to retire and had given much consideration to selling when they contacted Eliot. Through a process that included analyzing the local real estate market, as well as the Inn’s business activity, Eliot established the market value of the Inn at the Canal. The Inn’s clear financial records were critical to the process – and would be essential for lenders.
The buyers, Bob and Carol Roethke, were soundly qualified to purchase an Inn. Bob had management experience at a large Country Inn in the Finger Lakes. Carol planned to continue in her profession. Wisely, they sold their house while focusing on their search, which put them in a strong position to make an offer. With Eliot’s help over a period of eight months, they considered many properties while refining their list of criteria. Three reasons they chose the Inn at the Canal were:
- The Inn’s business fundamentals make sense.
- Bob loves the harbor location.
- It is possible for Carol to commute to her job.
As soon as the Ioppolos and Roethkes reached agreement on a price and terms, the process of getting to settlement began. There are many steps to closing on the sale of an Inn. In the sale of Inn at the Canal, financing and the structural inspection presented the biggest challenges.
Eliot, the buyers, and the sellers were partners in preparing the financial portfolio for mortgage lenders. Lenders expect complete financial profiles of both the buyer and the Inn. Transparency is absolutely essential. The Roethkes and Ioppolos were willing to explore different financing solutions including the possibility of seller financing (which in the end was not necessary) and Eliot presented the package to a number of lenders. Several national, SBA and local lenders proposed financing with less-than-ideal rates and terms. Eliot introduced the buyers to a regional credit union whose loan officer approved a mortgage with favorable terms after a lengthy review and a personal visit to the property. Eliot recommended a certified commercial appraiser and provided Bed and Breakfast industry statistics to expedite the appraisal process.
During the structural inspection of historic buildings, items that require remediation often come to light. Throughout this process, both the buyers and sellers were flexible as issues were worked out. Eliot and Al Ioppolo sought out qualified contractors. Painting conservators and experts in conservation of historic plaster ceilings were found to stabilize and preserve a section of delicate, elaborately painted, 19th century ceiling. The services of a petroleum tank remediation expert were required to remove an underground oil tank, subject to the Maryland Department of the Environment regulations.
As these and other tasks were being completed, both the Ioppolos and Roethkes were packing and preparing for new careers. Eliot stayed in close contact, following up with contractors, the lender, the accountant and the closing attorney, as well as addressing any eleventh-hour snafus. The process took 16 weeks from beginning to end and the transfer went smoothly on settlement day… The Ioppolos are now enjoying retirement and the Roethkes are planning the menu for tomorrow’s breakfast!
Ask Eliot how he can help you with your Inn purchase or sale!
