Several Bed & Breakfast propertied are for sale but the seller don't have or don't want to share any financials....preventing me form getting an SBA loan.
Real Estate Agent · Manchester, NH · Member since 2013 · 120 posts · 159 votes
4y
Offer to sign a Non-Disclosure Agreement. If they still refuse to share, then go ahead and make an offer contingent upon reviewing them to your satisfaction. If they still won't share them, calculate your own numbers, then lowball them.
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
4y
When I evaluate a property I count the number of beds it will hold. I multiply that number by $200. I multiply the resulting number by 26. If the purchase price is less then the second number I buy it. But I'm not in the typical re market.
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
4y
Sometimes the seller is reluctant to give out those numbers to anybody on first blush. It might not mean they are hiding anything. Put in an offer contingent on reviewing those financials. You could even have the offer state you will review financials before depositing earnest money. That way you can exit the deal if they numbers don't work.
When I evaluate a property I count the number of beds it will hold. I multiply that number by $200. I multiply the resulting number by 26. If the purchase price is less then the second number I buy it. But I'm not in the typical re market.
Boise, ID · Member since 2018 · 203 posts · 188 votes
4y
I feel that sellers are reluctant to give financial details for three different reasons:
1. They have been cheating on their taxes for years and are uncomfortable sharing. You would need to make the financials a contingency and do a deep dive to reconcile their financial numbers with the "real" numbers.
2. They are uncomfortable giving them out to everyone, so they want a more serious buyer before disclosing. A contingency clause fixes this.
3. This is probably the most common. Their business isn't making hardly any money once they pay to replace their own labor. Who wants to buy a business that nets 75k per year and the husband/wife both work 60 hours a week? This business won't want to disclose financials at all, with the hope a dreaming buyer comes along...
Several Bed & Breakfast propertied are for sale but the seller don't have or don't want to share any financials....preventing me form getting an SBA loan.
Do you recommend to skip or still place offers?
I’ve bought Airbnbs that are barely bringing in 100 K in annual revenue. Then I take ownership and get them over 200 K revenue per year. What they’re earning is totally irrelevant, it’s all about your vision for the property. And your business acumen
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
4y
So @Benjamin Aaker has a point @David Smith. When we were looking at BnB's way back, we had to jump through a few hoops to get a look at their full financials. Did you discuss with them why they won't disclose?
We used a specialty real estate firm in New Hampshire (we were looking in the New England) and they pretty much handled all the hoops. Pretty much just verifying that we were serious. We did fly 3500 miles to check out the area. :)
Real Estate Agent · Manchester, NH · Member since 2013 · 120 posts · 159 votes
4y
Offer to sign a Non-Disclosure Agreement. If they still refuse to share, then go ahead and make an offer contingent upon reviewing them to your satisfaction. If they still won't share them, calculate your own numbers, then lowball them.