All Forum Posts by: Craig Jones

Running an inn or boarding house that’s also your residence is a centuries old business model that still works great in 2025. Speaking from personal experience.

Fine to say it’s not your personal cup of tea, but no need to scare people off with talk of serial killers.

Quote from @Cliff Benner:

How did you find this? Was it on the MLS?

Yes. It was originally listed as a bed & breakfast (on the residential MLS). And later relisted as a "family compound" with most of the photos showing commercial aspects of the property removed. Several price reductions. It had been listed almost a year when we made an offer.

Quote from @Dave Wacholtz:

Tom,

 Try PersonalUmbrella.com   

We've used them in my agency and the premiums are generally good here in Wisconsin.

Good luck,

Dave 

Here's another vote for PersonalUmbrella.com.  The Markel policies they write are very flexible.  I have a personal umbrella from them that extends not only my personal home & auto liability, but also the liability coverage on my commercial STR policy.  No other umbrella carrier was willing to do that -- they all said I had to get a separate commercial umbrella for the STR if the primary coverage was commercial.

Quote from @John Underwood:

This house is only worth what comparable sales say it is worth.

This is how it will be appraised. Potential or actual STR revenue has no bearing on what it's worth.

There's surely an indirect effect though.  Investors will buy up all the inventory in any market that has STR cash flow opportunity, and comps will rise accordingly.  

I have heard of Kin and I believe their structure is pretty funky in terms of how they are capitalized. Very different from a typical insurance company. I don't know anything about their policyholder experience.

However, every homeowners policy I've ever seen, even with a "home sharing" endorsement or rider, requires some owner use of the property. You may get away with using that kind of policy for a full-time investment STR. Until you don't -- like when you have a big claim and it's denied for violation of the policy terms.

You're essentially operating a 1-unit hotel and you really, really want a commercial policy for it.  The liability coverage is way better, the building coverage is often better, and commercial policies typically cover loss of business income as well, which a homeowners policy isn't going to help you with.

California + wildfire area + STR is super tough. But here are a couple companies that might be able to do it, with a commercial policy:

NREIG
Berkshire Hathaway Homestate Companies

For the latter, you'll have to find an independent agent who's appointed with them.

Quote from @Alex F.:

How is the Bed & Breakfast doing?  

Really great!  

We converted to a self-service model a few months after we took over, which has substantially reduced the workload.  All the guest rooms have separate exterior entrances so we put keycode locks on those and guests get the code via text a day or two before they arrive.  And we discontinued the full service breakfast in favor of a grab-and-go breakfast bar in the foyer.  So we don't have guests in our living space anymore.

"Bed & breakfast" is maybe not the right descriptor now.  We call it a "boutique lodge" in our marketing.

The guest demographic has changed substantially too.  Before it was primarily retirees who were really looking for the social interaction with owners and other guests.  Now it's primarily young families with kids.  Also groups of 20-something snowboarders during ski season.

ADR and occupany *way* up vs. previous owners.

Quote from @Mindy Nicol:

Pricelabs has increased my occupancy and revenue significantly.  I manage it daily to update base pricing and see what the market is doing, but I wholeheartedly recommend if you want to maximize revenue and get to maximum capacity.

Mindy

 @Collin Hays I respect your position and for sure everyone should run their biz according to their own values.  But I gotta say I'm with @Mindy Nicol on this one. For me personally, our STR and our little inn provide more than half my family's income so I feel I have a fiduciary duty to my wife and kids to maximize that. The same way I'd have a fiduciary duty to shareholders if I was a revenue manager for a hotel chain or airline.

Far from gouging, I most often use PriceLabs to automate discounting strategies.  For example, ski season weekdays that are stranded between two booked weekends are pretty difficult to sell.  So I have PriceLabs set to identify those weekdays and automatically apply a steep discount, beyond what it thinks the weekday price should be.  Then I get guests who are thrilled to book a big 7-BR house for say, $600/night while competing properties sit empty.  Hard not to see that as a win-win.

Min stay automation is also a powerful feature that I think is untapped by many.  This year I chose to trust the recommendation for a 7-day min stay requirement on far-out bookings during summer peak.  And that's led to 60+% of our summer inventory booked with 7+ day stays, rather than the calendar being all chopped up with 2-5 day stays like last summer.  Any gaps that get created between bookings automatically have the min stay reduced to the gap length.  And any longer stretches of unbooked inventory will also have min stay automatically reduced as the dates approach.

Just my two cents.  Or rather, my $100K -- which is a rough guess of revenue added by pricing / min stay automation across our two properties.

Quote from @Navnidhi K.:

@David Rutledge was wondering if you end up going with an SBA loan?

I went deep on SBA 504 loans when we were buying a bed & breakfast property last Jul / Aug. 

The important thing to know is that you basically have to meet all of the qualification criteria for a typical commercial real estate loan from a bank -- EXCEPT for the down payment requirement.  If you meet the bank's other requirements, then SBA will come in with 35-40% on top of the bank's 50% to lower the down payment to 10-15% (depending on property type).

In our case, the previous owners had run the place as a part-time hobby, so the historical P&L's looked like crap.  And no partner bank was willing to finance based on projections and a turnaround story, even though we had an SBA pre-qual.

In the end we made the case to the sellers that no buyer would be able to obtain financing and got them to agree to 85% LTV seller financing.

Happy to answer more in-depth questions via DM.

Quote from @Andrew Steffens:

Definitely a little jealous as I love that area.  I imagine once fully stabilized you will cashflow and live for free onsite?

Yes, exactly. It's an STR, hotel and house hack all in one 😊

Quote from @Jake Andronico:

@Craig Jones

Super cool property!! Awesome makeover. 

I'm curious, have you run into any insurance issues? 

Insurance was a huge challenge, but BiBerk (a Berkshire Hathaway company) was willing to write a policy for us. Three Insurance (another Berkshire company) would also have written a policy if we had three years of hospitality experience. Our prior STR experience didn't count for them.