After a couple of months perusing several Bed and Breakfast ads, we found one that really caught our attention. There were a few that checked off some of the boxes, but ultimately they were either in the middle of nowhere (which meant not great schools for the kids) or they were about one or more hours away from skiing. Not ideal. The one that we liked was located in Steamboat Springs, CO.
Originally, the facility had been one of three lodges located very near each other, that housed students. A few years prior, one of the students left a candle burning in one of the structures and it burnt down. The second building was sold to a private owner and the third was this newly running Bed and Breakfast. The present owner was mostly renting it out as a vacation rental. According to Eben (our advisor), this was not an ideal model for running a B&B. It seemed like a great business model to me. What’s not to love about making a little less money to rent out the whole place, when you as the inn keeper come in at check out to clean up? Eben said that in the B&B world, you make a lot more money as an actual Bed & Breakfast. It’s all about those higher rate room prices.
After digging into the property, it seemed like financially we wouldn’t be able to make it work. The current owner was not seeing the profits that banks would require to lend. I will try to elaborate on this a little more later. The property was priced amazingly well for the area. If you have never been to Steamboat Springs, it’s a really cool town but also very pricey real estate. It is a stereotypical ski town with several pubs, plenty of adventure stores, hot springs, an incredible ski resort and so much more. For an outdoor enthusiast, this place has it all. There is even a nearby airport conveniently located just about twenty minutes from shuttle pick up to first run.
A fresh powder day!
We had met with our CPA who helped us sort through the expenses and income and he didn’t think we could cover our mortgage. We would need to bring up the business quite a bit and after talking this over with Eben over at Inn Partners, he explained that you need to factor more into the equation than just the straight numbers received back from the seller. Basically, you want to purchase a B&B that has had good occupancy rates in the last couple of years. If the business hasn’t been pulling enough profit, then you will need to make sure that the business has room to grow when you take it over. You will need to prove this case to your bank and in our case, the SBA as well. And proving that is not easy. This business had been run more like a vacation rental for the previous years, so we were hoping there would be a way to convert the room rentals back to typical B&B rates allowing us to increase sales and show more profit. The current occupancy rates were only 50% overall. However, these were mostly for vacation rentals. We would need to drive that number up to something like 70%. But would creative marketing and remodeling do it? The location was quite off the beaten path. It was located near Rabbit Ear’s Pass about ten miles from the resort and pretty far from downtown.
I booked a flight for Eben our advisor, and another flight for myself. Eben would come with me to assess the property and help us figure this whole thing out. I decided to leave my family behind since Dylan was in school and Caleb was too much for me to handle in this sort of situation. (There would be serious conversations needing to take place and I knew Caleb would make that nearly impossible.) During my stay, it had dumped snow!! And I mean a lot of snow. I knew that it was the perfect time to be visiting by the excitement and the buzz I could hear among the locals. Thank god I brought my snowboard gear! The snow was incredible, there was no doubt about that. I had heard it referred to as “champagne snow” and I would agree. Although a local needed to explain it to me first, but the term referred to how the snow would lightly buzz your nose when it flew towards your face, giving you a tingling sensation. Legend has it that one of the founder’s of the ski resort coined the term. (I do not know if this is true or not, just a local legend.) I would describe it as light and airy cream. You could smooth over and through it like a denser version of whipped cream. I was in heaven!
I also loved the parking situation. For a non-local, I typically anticipate a total nightmare when it comes to parking at a ski resort. They usually force your car to park miles from the closest lift and getting your equipment (especially for children) is just a total bummer. It’s a lot of heavy awkward lifting and then there are the usual shuttle lines. But Steamboat had ample parking, albeit cost $30 for all day for the premium spots. Otherwise, you could park in a free lot located a short walk away. There were not too many people there. It seemed as though maybe everyone traveled by shuttle from their conveniently located condo. The downside of all this would be the hundred plus condos that bordered the entrance to the resort. These structures were peppered all along the base of the mountain and it felt crowded, even claustrophobic. It felt strange to pull up to this amazing mountain, navigating through a maze of condominiums. But once you strap on your skis or board and head up to the beautiful top, you soon forget all about them.
After seeing what Steamboat had to offer with all it’s amazing recreation, natural wonder and good local vibes I fell hard in love. I couldn’t stop imagining my new life here. We set a time to meet with the seller and asked if we could tour the lodge in and out. Unfortunately for me, I was so little prepared for what happened next.
Before we even started the tour, she made a comment about having an offer already and being in contract. I literally shook my head quickly to shake out whatever could be clogging my ears. There was no way I traveled all the way to Steamboat Springs, only to find out that they were already under contract. She seemed surprised that I was in shock over this news. She said to both Eben and I that her realtor told her that he had told us about being in contract before we booked our trip. We shook our heads in disbelief and said no, definintely not. He totally lied to her and us!!! Without knowing all of the details over this news, we could only assume that her realtor had played a dirty trick to force her to sign a contract and take a less than desireable offer. He used us as bait to pressure into taking it. Afterall, we did know that the couple making the offer was also represented by her realtor, so he would “get both sides of the deal.”
I was heart broken. We finished the tour of the Inn and tried to make the best of the rest of our stay (I still had two days left) to try to enjoy our time and not come across too awkward. We were staying at the Bed and Breakfast, so I couldn’t really do anything other than pretend to just be on a happy vacation while I still had time left. It was really a huge let down but I made the most of my time and enjoyed the peaceful snow falling and visited several of the local shops.
One thing I can take away from this mistake is that the “champagne powder” is real and totally worthy of checking out. I hope to be back someday.
(to be continued)
Good Medicine 