Our initial plan to get going on this was to make as much money as we could while still living in Pocatello and working at our jobs. To that end, we decided the best first step was to buy an apartment building, live in it on the cheap, and make money by renting the rest of the building as well as renting our house. I had just received a promotion at work, one that, while meaning more work and salaried paychecks, it also meant a bonus check every summer at the end of the fiscal year. Nothing substantial, but enough that combined with the income from the apts, we would be sitting in a comfortable position rather quickly. There were a good number of apartment buildings available in town at that point, some priced lower than the house, and we figured we could get into one of those rather easily. We have the good fortune to be friends with the owner of Gate City Real Estate, and spoke with him about our plans. He said it sounded like a pretty good plan, but warned us it might be more difficult than we'd thought due to the nature of lending on an investment property, rather than a primary residence, but that there were still a good number of places out there that we could get with 0% down.
Turns out, had we tried that 6 months earlier, that would have been true. Unfortunately, in order for us to get an apartment building when we started looking, the banks would require somewhere between 30-50% down, depending on our history and the building, and even then, we'd have to be able to cover the payments on our own without rental income. Needless to say, this was dispiriting. We had crunched numbers, and at this point hoped to jump right from the apartments into something closer to our eventual goal, bypassing a lot of time and steps along the way. Eliminating our chance for that left us a bit afloat. Luckily, we're pretty bull headed, and dove back in, talking to our mentor friend, who suggested possibly looking into Motels for sale. Being a running business, rather than an investment property, buying a motel outright would actually be easier to obtain funding, under certain circumstances. Quite frankly, we were a bit skeptical that we'd find a place, but decided to start looking...
Saturday, November 29, 2008
Our Plan II
The first tier of our plan is still very much a work in progress, and is mutating wildly every day, it seems. What started as a crazy idea during spring break has evolved into business plans, bank meetings, investor searching, scouting trips, blood, sweat & tears, and one might convincingly argue that we're no closer to starting up than we were then.
Obviously, one can't merely walk into a bank and request enough money to build a multi-million dollar complex in Washington, so Lindsay and I realized that we needed to start smaller, attempting to find a hotel, motel, or bed and breakfast that was small enough for us to be owner operators for our first step.
Of course, not just any place would do. There's a surprisingly large number of motels for sale across the united states, but we really wanted to find one that fit a few very specific criteria.
1- Size. We needed to find a place small enough to run it by ourselves, or with very minimal help. Our profit margin would be much higher then, and it would give us the satisfaction of being in charge and responsible for every aspect of the business. When we succeed, we want to rest easy knowing that it was because of us.
2- Location. Obviously, the location of the actual motel is important, but we also wanted to find a place in an area that we wanted to live, ideally near the Or/Wa border where we would like to eventually build our final business. We also looked towards the coast, not just from a personal enjoyment factor, but also secure in the knowledge that regardless of national conditions, the allure of the ocean will always be strong for vacationers.
3- Condition. While it would be fun to waltz into a property that's performing at peak, with everything decorated tastefully, clean, and well run, that isn't a property you can improve easily. We wanted to find a place that was functioning, but one that we could immediately improve and make our mark on. At the same time, we didn't want to try and revive a business that was floundering, building falling apart, bad management, bad reputation, something that would be such an uphill battle that we'd be exhausted long before we started turning a profit. Essentially, we needed to find a place that used to be loved. Somewhere that had owners that cared for and took care of the property, performing needed repairs, taking care of the customers, and keeping good records, but one that the owners have stopped caring about as much. Ove where the decor is a bit outdated, the beds old, the landscape neglected, with a shoddy website. Something we could create into a gem.
4- Price. Our biggest, and most persistant problem. We don't have a lot of money. If we did, we could walk in tomorrow, and have our pick of a dozen prime properties. Unfortunately, we're going into this with a lot of enthusiasm and ideas, but virtually no capitol. Our families are not well off, and especially in todays market, finding funding or investors for a hospitality business is next to impossible. Hotels pricing is also all over the place. A common problem seems to be places pricing themselves based on their percieved value, or on what they really make but don't report, both things that shoot ourselves and them in the foot when we go to a bank. Money. We've learned a lot of good, hard lessons about it's power lately.
So essentially, what we're looking for is a small, cheaply priced motel on the coast that is in good shape, but not too good, that reports all of it's income, is willing to deal, and has lots of room for improvement, allowing us to start in on our dreams for the future!
Sure, it sounds easy on paper...
Obviously, one can't merely walk into a bank and request enough money to build a multi-million dollar complex in Washington, so Lindsay and I realized that we needed to start smaller, attempting to find a hotel, motel, or bed and breakfast that was small enough for us to be owner operators for our first step.
Of course, not just any place would do. There's a surprisingly large number of motels for sale across the united states, but we really wanted to find one that fit a few very specific criteria.
1- Size. We needed to find a place small enough to run it by ourselves, or with very minimal help. Our profit margin would be much higher then, and it would give us the satisfaction of being in charge and responsible for every aspect of the business. When we succeed, we want to rest easy knowing that it was because of us.
2- Location. Obviously, the location of the actual motel is important, but we also wanted to find a place in an area that we wanted to live, ideally near the Or/Wa border where we would like to eventually build our final business. We also looked towards the coast, not just from a personal enjoyment factor, but also secure in the knowledge that regardless of national conditions, the allure of the ocean will always be strong for vacationers.
3- Condition. While it would be fun to waltz into a property that's performing at peak, with everything decorated tastefully, clean, and well run, that isn't a property you can improve easily. We wanted to find a place that was functioning, but one that we could immediately improve and make our mark on. At the same time, we didn't want to try and revive a business that was floundering, building falling apart, bad management, bad reputation, something that would be such an uphill battle that we'd be exhausted long before we started turning a profit. Essentially, we needed to find a place that used to be loved. Somewhere that had owners that cared for and took care of the property, performing needed repairs, taking care of the customers, and keeping good records, but one that the owners have stopped caring about as much. Ove where the decor is a bit outdated, the beds old, the landscape neglected, with a shoddy website. Something we could create into a gem.
4- Price. Our biggest, and most persistant problem. We don't have a lot of money. If we did, we could walk in tomorrow, and have our pick of a dozen prime properties. Unfortunately, we're going into this with a lot of enthusiasm and ideas, but virtually no capitol. Our families are not well off, and especially in todays market, finding funding or investors for a hospitality business is next to impossible. Hotels pricing is also all over the place. A common problem seems to be places pricing themselves based on their percieved value, or on what they really make but don't report, both things that shoot ourselves and them in the foot when we go to a bank. Money. We've learned a lot of good, hard lessons about it's power lately.
So essentially, what we're looking for is a small, cheaply priced motel on the coast that is in good shape, but not too good, that reports all of it's income, is willing to deal, and has lots of room for improvement, allowing us to start in on our dreams for the future!
Sure, it sounds easy on paper...
Our Plan
Our plan, if it can be considered as such, is to eventually own a small sized, luxury themed hotel with extensive garden and wedding facilities in the Portland/Vancouver area. Obviously, that's easier said than done, and to accomplish this, we've devised an elaborate series of starts, middles and finishes that will take us away from everything we've ever known and hopefully, after a series of hills and valleys, land us in a place we love to be, in a job we love to do, and in a life we're proud to call ours.
This is something we've been working on for quite some time, and I'll be starting with some events that have happened quite a while ago, partly to protect the innocent and ourselves, partly to ease my sense of superstition about talking about certain events as they happen in fear of jinxing them, and partly because I just started this puppy, and a lot has happened!
First, a bit of background on us:
I'm currently a manager with a major nationwide chain of drug stores. I've been with them for 6 years now, and prior to that, I managed a gas station and a movie theater, at one point, I did all three simultaneously. I've been in management for around 12 years combined, all of it retail in some form or another. I enjoy reading voraciously, own over 2,000 DVDs, (Odds are, you'll see some reviews of books and movies pop up on here too...) and I draw, paint, sculpt and design, occasionally for actual money!
My wife, Lindsay, is a graduate of the University Of Montana, and currently works for the Best Western Hotel. In her time, she's worked at a pet store, a greenhouse, a craft store, and for her father's music store. (off and on continuously since she could work a vacuum, in fact) She enjoys reading, cross stitching, crafts, and computer programs. If not for this last thing, she could easily pass for a septuagenarian in print...
We have 4 pets, all of whom are treated like our kids. We have a 2 year old Newfoundland/Retriever mix, named Ludo, a year old Great Pyrenees puppy, Pooka, and two cats, sisters that were born on St. Patrick's Day. The black one is named Clover, and the Siamese is named Sassafras.
We currently live in Pocatello, ID, a city where we were both born and raised, a city where if you don't know someone and their entire history, you inevitably know someone who does. Some people consider this a good thing, others want to move to Oregon and open a Hotel.
All joking aside, while we have great respect for the city and it's history, it's just time for us to stake our own claim in the world, and we figure now is a good time to try something crazy that might work out better for us than we could possibly imagine.
This is something we've been working on for quite some time, and I'll be starting with some events that have happened quite a while ago, partly to protect the innocent and ourselves, partly to ease my sense of superstition about talking about certain events as they happen in fear of jinxing them, and partly because I just started this puppy, and a lot has happened!
First, a bit of background on us:
I'm currently a manager with a major nationwide chain of drug stores. I've been with them for 6 years now, and prior to that, I managed a gas station and a movie theater, at one point, I did all three simultaneously. I've been in management for around 12 years combined, all of it retail in some form or another. I enjoy reading voraciously, own over 2,000 DVDs, (Odds are, you'll see some reviews of books and movies pop up on here too...) and I draw, paint, sculpt and design, occasionally for actual money!
My wife, Lindsay, is a graduate of the University Of Montana, and currently works for the Best Western Hotel. In her time, she's worked at a pet store, a greenhouse, a craft store, and for her father's music store. (off and on continuously since she could work a vacuum, in fact) She enjoys reading, cross stitching, crafts, and computer programs. If not for this last thing, she could easily pass for a septuagenarian in print...
We have 4 pets, all of whom are treated like our kids. We have a 2 year old Newfoundland/Retriever mix, named Ludo, a year old Great Pyrenees puppy, Pooka, and two cats, sisters that were born on St. Patrick's Day. The black one is named Clover, and the Siamese is named Sassafras.
We currently live in Pocatello, ID, a city where we were both born and raised, a city where if you don't know someone and their entire history, you inevitably know someone who does. Some people consider this a good thing, others want to move to Oregon and open a Hotel.
All joking aside, while we have great respect for the city and it's history, it's just time for us to stake our own claim in the world, and we figure now is a good time to try something crazy that might work out better for us than we could possibly imagine.
Rodents of unusual size?
Why the title?
Apart from it being a line from one of my personal favorite book and movie, Princess Bride, I also thought it was kind of a funny take on the problems we've found in our attempt to get going on the hotel/motel business. The worst problem a hotel could have would be Rats, and while we don't physically have rodents of any size, brother, we've got problems!
- Kristopher
(also an alternate name for the small dogs everyone seems to have these days, the Pocket Dogs that are suddenly okay to take anywhere and everywhere, just because they fit in your purse... )
Apart from it being a line from one of my personal favorite book and movie, Princess Bride, I also thought it was kind of a funny take on the problems we've found in our attempt to get going on the hotel/motel business. The worst problem a hotel could have would be Rats, and while we don't physically have rodents of any size, brother, we've got problems!
- Kristopher
(also an alternate name for the small dogs everyone seems to have these days, the Pocket Dogs that are suddenly okay to take anywhere and everywhere, just because they fit in your purse... )
Welcome!
Welcome to a new experiment for us! For the last year or so, my wife and I have been working towards our dream of eventually owning and operating our own Hotel. It's been a long road, and quite frankly, balancing our full time jobs, our pets, family and friends while still concentrating on the things we need to secure our future career has been difficult, to say the very least.
I started this blog, in part as an attempt to keep the friends and family we've been seeing less of in the loop and informed, but also as a journal of our efforts, both successes and pitfalls, as we attempt to grasp our dream with virtually nothing but our energy and enthusiasm.
-Kristopher
I started this blog, in part as an attempt to keep the friends and family we've been seeing less of in the loop and informed, but also as a journal of our efforts, both successes and pitfalls, as we attempt to grasp our dream with virtually nothing but our energy and enthusiasm.
-Kristopher
Subscribe to:
Posts (Atom)