New Adventures – Workington House B&B
As alluded to in several previous posts, now it’s time for the big announcement.
At the end of April, my partner and I will be leaving Brighton to move up to Cumbria.
We have just put a deposit down on a Bed and Breakfast in Workington, and we will be live-in owners of a business from May this year.
It’s been a wild ride which started last year, and so this blog post can summarise some of the main hurdles and fun along the way.
A plan is formed
It all started with my better half’s lifelong dream of owning a Bed and Breakfast. We spoke about the idea for a while before realising we have pretty much all the qualifications necessary to make it work – we’d just need a property and a kickass business plan.
We started scouting around for suitable places where we could:
- afford to buy a property (and afford to live afterwards)
- get enough business, either through tourism or links to other businesses needing short-term accommodation
- enjoy living, and actually have a nice life around the B&B
We both took quite a shine to Whitby, and spent a while at the end of last year looking at properties and putting a comprehensive business plan together. We had a little money, but would still need to get a mortgage in order to make up the rest of the cash needed to buy a property in Whitby outright.
Business plans and mortgage brokers
We visited Whitby and narrowed our search to a couple of great properties – one was converted chapel, with the other being a terraced house in the centre of the town.
We mapped out the pros and cons, hammered out our finances until we were budgeting down to the penny, and turned the idea into a fully-formed plan. It was a masterpiece forged through sweat and tears – although even with a masterful business plan, we still had a significant challenge to tackle: funding the bugger.
As we still needed a mortgage, we starting looking into our options for finance. As it will be a commercial property purchase (regardless of whether we are living in the property) then we would need a commercial mortgage.
It’s part of this that led to me making a quick tool to check how much a commercial mortgage would cost, and the associated deposit and stamp duty.
In order to satisfy mortgage lenders, at a bare minimum we would need a full business plan, along with accounts from the businesses when they were trading (which was over 4 years ago in the case of one property).
We contacted a specialist mortgage lender (hotels and hospitality) who offered a little constructive feedback but basically shut it down – we were too high risk (which we knew) but this still felt like a fairly substantial hurdle to overcome.
We also spoke to a mortgage broker, who helped us to form the business plan and mitigate (or use the right words to play down) the inherent risks in the mortgage proposal. While this was also helpful, it was clear that our options for lenders would be limited, and would absolutely require a copy of the former business accounts, which the sellers could not provide at short notice.
We could have ended up spending several months preparing, waiting for the accounts, and then subsequently waiting for the decision on our application.
We weren’t getting anywhere fast, and we had already spent around 3 months preparing the plan and finding a suitable property. At this rate, the property could be taken off the market before we had even submitted our application with each of the lenders.
It was a low point, but we decided to revisit the drawing board and see what other options we had available.
New location scouted
While Whitby is gorgeous, we had to admit defeat in the size of mortgage we would need to move there. No suitable properties in the area were available for less than around £300k… which we could not finance with our current situation.
We cast the net slightly wider, and found a currently-trading B&B a little further north than Whitby…. and quite a lot further west…. the lovely town of Workington in Cumbria!
It fell within our price range and was a smaller property to manage for us newbie B&B owners, so we decided to pay it a visit.
As it turns out, Cumbria is a bloomin’ long way away…. pretty much the opposite corner of the country from where we are now! So we booked an 8 hour train journey and packed ourselves up for an overnight (business) visit.
It was gorgeous, from the rickety old train which took us along the coast and past the snowy mountains. If you want to know how the visit went in more detail, including our stop in Carlisle, then visit Naomi’s blog post about the trip.
We loved the town and the B&B itself, so we agreed this was the one for us!
Legal stuff and paperwork aplenty
After the decision was made, we began the months-long process of wrangling between solicitors, surveyors, estate agents, banks, and property management.
As it turns out, buying a business comes with a few hurdles you need to jump over!
For the most part, our own solicitor has been fantastic (credit to Daniel Curry at Crosby & Woods Solicitors) and has made the process as stress-free as possible. Shame I can’t offer the same praise to some of the others involved in this chain, but they’ve not stopped us so far!
After some due diligence, a bit of property surveying, a lot of land registry wrangling and more jargon-laden reports than you could shake a stick at – we’re pretty much all ready to go now.
We’ve now finalised the contracts and agreed the moving date, so as of 27th April 2018 we (should) be proud owners of a Bed and Breakfast.
We’ve learned a lot about property purchases, found out about our Chancel liability (and that we’re at the mercy of the local church without insurance!), discovered what radiation and contamination is possible at our new gaff – many wonderful and baffling things that we didn’t know before!
Now we just need to pack our lives into boxes, plan the logistics of moving everything 300 miles northwards, and say goodbye to the city that has been our home for nearly a decade (and closer to 2 decades for Naomi!).
We’re planning some leaving drinks with everyone in the coming weeks, but of course everyone is invited to come and stay with us in Cumbria (once we’re all set up).
I’ll post some more details about the B&B once we’re moving in, but for now here’s a link to the website: http://workingtonhouse.co.uk
That should do for today – will post more about our moving plans soon!