Have you ever had that feeling that you are about to lose everything? One minute you are elated. You’re walking on water. You are floating and untouchable and just before you are about to clink your champagne glasses to celebrate the last hurdle, BOOM! It all falls apart.
It was nearly October and just when we thought our SBA loan was nearly to a close, we had a peculiar incident take place. The seller’s of the Bed and Breakfast we were trying to purchase asked for a last minute meeting with us. They didn’t give us a reason and our realtor didn’t know anything about it. At this phase in the deal, I would be lying if I said that I thought nothing of it. I was worried. There were a million thoughts running through my mind. My worst thought was that they were backing out.
We were three months into the process of closing on a Bed and Breakfast. At the moment we had nowhere yet to call home. Our lease was running out in just two weeks. My two young children were feeling a bit nervous about starting at their new schools. All of our belongings were still in storage and it was starting to snow. All we had to lean on was our summer camping gear. We were pretty desperate to start moving into our new B&B and start living our lives. We couldn’t afford to hear any news except for major progress at this point. I kept my fingers crossed.
Ryan reluctantly attended the meeting. I had to pick up our kids from school, so I anxiously waited for his call at home to hear the details. Ryan sounded pretty happy when he finally called to share the news. The seller’s wanted to offer us 100% owner financing. At the surface, it sounded like a great opportunity.
They offered a low fixed rate for twenty years with an affordable down payment. We didn’t know all of the details but it had the five major bullet points in writing. We would have to wait a few days to receive more information back from their lawyer to read through the terms. When our lawyer received the amendments, he gave us a call and warned us against this arrangement. The reason being was that it was a Contract for Deed. This means that we wouldn’t hold the title, the seller’s would. We spent a week trying to dig into this detail because without the title that meant we wouldn’t be able to get another loan down the road if we needed one for capital improvements. We wouldn’t even be able to get a small line of credit. If for any reason we couldn’t make a mortgage payment, we could be kicked out and the sellers could take the B&B back with very short notice. We could potentially lose everything. And by everything, I mean all of our 401K investment, all of our Roth IRA contributions and all of our savings. Everything.
We hesitated against the offer. We tried to explain why to the sellers and we asked for different terms. We thought that we were stuck and it was this or nothing. We were able to negotiate the ability to refinance after three years, in hopes of getting out of the arrangement and extended another month onto the default period. We would just have to pray that we could refinance down the road if we needed some additional cash. So we decided against our better judgement and shook on the deal.
Just when we thought things were rolling again, two more hiccups hit us unexpectedly. One was that our SBA adviser was beyond upset that we were not going with the SBA financing. So much had gone into this effort. Our adviser was the one after all who helped us with our complicated business plan and very detailed projections. She navigated us through whether or not we could actually pull this off. Because of her, we knew we could. I felt terrible! We were in a situation we could not get out of. She seemed to realize this and took some pity on us, but I still didn’t feel good about it. We did end up with a pretty hefty and unexpected bill for services.
The other terrible thing that took place was about a week into this new plan, we realized that the seller’s were unaware of $100K in cash that we needed from them to help carry us through the slow months. This is a pretty complex part of the story and I am not sure I can really explain it well without completely losing you, so I will just simplify it by saying that originally in the SBA loan, the seller’s (maybe unknowingly) were going to be providing us with $100K in seller financing. However, this new deal did not include this part. Without it we couldn’t make this new offer work and we spent the next three weeks renegotiating terms with them. It was painful and very stressful.
We thought the deal was never going to happen. At one point we were thinking of worst case scenarios. One being that we would lose everything that we had spent thus far getting the business rolling and we would need to reinvent ourselves in a town where we hardly knew anyone, didn’t have a house and worst of all didn’t have jobs. It was terrifying and devastating. I had worked so hard getting to this point. And there was a good chance it would be for nothing.
Towards the end of all of this we felt broken. I was crushed and Ryan had completely lost himself. We had hit rock bottom and wanted to quit the fight. Our nerves and stress took a major toll on our bodies. We weren’t eating or sleeping and I can remember an entire day where my body couldn’t even move. I was frozen in place. My brain was so overly exhausted. All I wanted to do was watch movies in my pajamas. Depression had set in.
Our positive thinking realtor told us to keep holding on but we didn’t think there was anything left to hold onto. I kept thinking about how I would have to report back to all of our friends and loved ones that we lost. Our beautiful website would never be published. I would have to undo so many tasks that had been done. The dream was over. It was the very worst feeling.
But then, just when we had nothing left, the phone rang. It was our realtor. He had incredible news that surprisingly the seller’s were agreeable to our new terms after all and we would be closing in just a few short days. All we had to do was hang tight until the papers were drawn up.
I still shake my head at the thought of all of this. It’s pretty unbelievable to follow the twists and turns of the overall process. I would say that I would probably do it all over again, but only if I knew the result was a positive one. But that’s just it. You don’t know what the ending will be and it is completely terrifying.
Next Chapter…….Our new life as Inn Keepers!