I wrote this blog in 2011. It was around 2 years after we moved to Florida and purchased a bed and breakfast and started to realize it wasn't going to provide enough income to keep going without one or both of us getting outside jobs. It's a detailed report of what led us to do such a foolish thing and what we did to try to make a go of it. Eventually, we gave up and shut down the business, sealed off the 2nd floor to save money heating and cooling that part of the house, and both worked briefly at outside jobs in the area. We finally sold the house at a significant loss and moved back to St. Louis where we purchased a home in Bridgeton, MO. As of February, 2016 Mary Rose is working as a low level administrative assistant and Stu is retired. Update: 2021 We are both retired now.
How We Became The Perfect Suckers For Two Crooks
The Economy Softened Us
In 2009 my wife, who is a programmer analyst, lost her 3rd job in 2 years. The first two she lost due to outsourcing and corporate cut-backs. Following that she took an extremely expensive class in Microsoft .NET technologies, scored an average of 95 per cent on her tests, and landed a job within a week of graduating. 7 weeks later she was fired – they said she didn’t work fast enough.
I lost a job I had been at for over 7 years as an Association Manager/Activities Director at an active senior community. Our combined income at the time was, as they say, “six figures”. We owned 2 houses, and three cars. Like many others our retirement fund has significantly shrunk; in fact, it was almost half of what it had been before the economy tanked.
After a fruitless search for comparable positions in the St. Louis area, we concluded life as we had known it had come to an end. One day my wife was baking chocolate chip cookies and feeling quite domestic. She said to me, “Wouldn’t it be fun to run a bed and breakfast?”
I’ve always been the impulsive, adventurous type and I immediately got on the internet and searched for B&B’s for sale around the country. My preference was for something near a lake. The first one I found was in Montana, and my wife gave me compelling reasons for passing on that one. It was too cold, too far away from any major town, and the prospects for making a living at it were slim.
Since we decided to rule out cold climates, both being sick of the Midwest snow and ice, I began to look at properties in Florida. I found one in Avon Park that was within our means to purchase without a mortgage.
We contacted the sellers and arranged to fly to Orlando, rent a car, and spend a few days at the house.
Come Into My Parlor, Said The Spider To The Fly
When we arrived at the B&B we were warmly greeted by Stan and Gertie Zandercreep (made up names). By all appearances they were a delightful couple, originally from England. We both loved their accents, and Stan was quite funny.
We got settled in our room, which was large and comfortable. The house had 4 rental rooms, and 4 bathrooms. There was a kitchen, dining room, and a combination parlor and office. In addition, the Zandercreeps had a small bedroom on the second floor.
They gave us a tour of the house and the grounds. The house was filled with what Gertie described as “valuable antiques”, which later proved to be mostly garage sale rummage. The house sat on two and a half lots, an impressive amount of land, and had dozens of beautiful flowering plants and palm trees. Best of all, across the street was beautiful Lake Verona.
We both immediately fell in love with the house, the grounds, and the lake. After several years of stress, disappointment, and anxiety, we were both ready for a change of scenery. A business we could run together in such a beautiful area was quite appealing to us.
We Should Have Known They Were Lying To Us – Their Lips Were Moving
Within hours of our arrival we stopped thinking with our heads, and only with our hearts. We were completely charmed by the affable Zandercreeps, and believed everything they told us. They showed us their guest book, filled with page after page of positive comments. They told us how easy it was to maintain the house. Stan explained, “Since your home is your business, virtually everything you buy is an expense to the business.” This turned out to be a gross and inaccurate simplification of the real tax laws.
They told us if need be, we could both easily get jobs in the area and mentioned a new hospital and a nearby community college. They took us on a tour of the area, pointing out all of the local attractions including an orange grove, the library, their favorite restaurants, etc.
We were so taken by them and the house that we foolishly picked up all of the tabs that weekend for meals the four of us ate out, and a tour of Highlands Hammock Nature Reserve.
On the second night there, Gertie told us that their real estate agent wanted to take us all out to dinner at Outback Steakhouse. I ended up sitting next to the agent. I told her upfront we loved the house and despite that, she tried to launch a hard sell on me.
Over the next forty five minutes I used my skill as a former professional stand-up comic to turn every thing she said into a set up for jokes. I have never done that to anyone before, but I had the rest of the table in stitches at her expense. I just felt I had told her before she started that she didn’t have to sell me, I was already sold. When she ignored me, I felt justified in letting her have it.
At the end of the meal the waitress asked how she should prepare the checks and the real estate agent quickly said, “separate checks by couples”. Hmmm, Zandercreep lie number 1.
The Negotiations
On the ride home we established that all four of us found the real estate agent obnoxious. Stan suggested we sit down in the dining room and discuss the house purchase among ourselves. He told us how much they liked us, and throw out a figure that was $20,000 below their asking price. He said, “This is it, it’s firm, non-negotiable.”
My wife will tell you that normally I am a tough negotiator. She hates being with me when we need to buy a new car. It’s a painful process for her to witness. In this instance, I didn’t even try to negotiate. Based on the size of the house, the lot, the proximity to the lake, the climate, and what the Zandercreeps presented as the annual income and expenses of the business, it sounded like a pretty good deal. I’m not sure, but I think we accepted it on the spot. SUCKERS!
The Zandercreeps told us they were anxious to get back to England before winter. This was September. We told them we had a house to sell. We had already sold one of our houses. We said in the event that we didn’t sell our remaining house quickly, we could conceivably cash out our retirement fund and still make the purchase.
A Summary Of All Of The Mistakes We Made In Purchasing This Business
You could not have asked for better patsies – we did EVERYTHING wrong! I think in retrospect it’s because it all looked so good to us after being emotionally battered by the loss of our jobs and the economy that we just wanted to make it happen, no matter what.
1) We didn’t get our own real estate agent to represent us so the negotiations could take place at arm’s length and give us an opportunity to think about each phase, and get some objective feedback from a third party.
2) We didn’t put ANY contingencies in the contract. We didn’t require a building
Inspection, or even make the purchase contingent upon the sale of our house.
3) We didn’t ask to see the books in advance of the sale. HUGE MISTAKE!
4) Later, we asked the sellers who they used for their commercial liability
insurance. They initially failed to give us a straight answer, and that should have
been a major red flag on the deal. Just weeks before the closing, they finally told
us they didn’t carry insurance on the business. No wonder their expenses were so
reasonable.
5) We priced our house considerably below market for a quick sale. We got two full price offers and accepted one of them. During the buyer’s inspection mold was found in the basement. The contract fell through, and we ended up having to completely gut our fully finished basement to get the mold removed.
6) We took our house off the market while we did the mold remediation. When we put it back on the market, again it was below what it should have been for a quick sale. We did not sell it in time to make our November 30th closing on the bed and breakfast house, and ended up liquidating our retirement fund. We paid initial penalties at that time, and even bigger ones latter when we did our taxes. Not only did we overpay for the business, but in order to buy it we lost thousands of dollars in the process.
The Fun Continues
The way the deal was structured we were purchasing the house as one contract, and the business and all of the contents in the house as a separate contract. We arranged for the closing to take place in advance of our move to Florida. This schedule change was necessitated by the mold remediation work needed to get the basement in a saleable condition. That by itself was a major nightmare, and subject for a separate essay.
We had asked Stan and Gertie to sell some of the furniture. We were coming from a fully furnished 4 bedroom home, with 2 more bedrooms in the formerly finished basement. We needed them to help us make room for some of our stuff.
When we arrived, we discovered they had not sold the dining room furniture. Gertie made a rather incompetent attempt placing an ad in the local newspaper. She had originally claimed her dining room table was worth $10,000. It’s funny, she couldn’t get anyone to pay $700 for it.
Our movers were scheduled to come with our dining room furniture two days after we arrived by car. We had one day to dispose of three pieces of furniture in the dining room. A friend of Gertie’s suggested a resale shop called the Red Barn. We drove there the day after our arrival and told them if they came that afternoon they could have a large wooden table, buffet, and china cabinet all for $100. They agreed and were there the next day with a truck. While they were there we also sold a pair of twin beds that the Zandercreeps used in the former owner’s quarters. We needed that space to store boxes of our belongings that were coming from our house in St. Louis.
We told the Zandercreeps they could stay in one of the guest rooms until they departed for England 9 days later. We figured we could use the time to get as much information from them as possible before they left.
The Real Gertie Appears
We theorized, based on Gertie’s response to our selling the dining room furniture so cheaply, that she was very angry with us. I reminded her that we had paid her top dollar for the business and contents. In truth, the furniture in the house is not high end, and we doubt if there were any authentic antiques. We have spoken with some friends of theirs and they told us most of what they furnished the house with came from resale shops and yard sales.
When she asked, we told Gertie we were planning on computerizing the bookkeeping. It made sense to us since we both have used computers for accounting for years. The day before the Zandercreeps left we asked to see the books. Gertie informed us, “When you told me you were putting everything on the computer I figured you didn’t need them and threw them out.” Un-F-ing-Believable!!!!!
She also took the liberty of disposing of all guest records, addresses, and most of the receipts for repairs. She had no logical reason for doing that other than pure malice.
Let Karmic Justice Deal With Them – Unless You Know A Hit Man In The U.K. We Can Hire Cheaply
We got one twenty minute training session with the Zandercreeps before they left. When we asked about the credit card processing company they used, they merely said, “Call the number on the phone and they’ll set you up.” We did, and almost immediately had problems with this company. When we mentioned this to their friends later, they told us the Zandercreeps had problems with that company for 3 years. We are now locked into a 3 year contract. All the Zandercreeps had to do was give us a little heads up to find another company and we would have – instead, they left knowing we’d sign on with the same people with whom they were glad to no longer be affiliated.
Since they left we have discovered that they greatly exaggerated the amount of business they had, and understated the expenses of the house. They left no forwarding address, and obviously haven’t been in touch with us since they departed.
Let’s Make Some Lemonade
Okay, so we did this deal about as poorly and incompetently as anyone could. We were the perfect suckers for the Zandercreeps. They had been trying to sell this place for about three years. So, what do we do?
Since we’ve been here we’ve made tons of improvements both inside and out. This will be the subject of another article, but here’s the short version:
(Note - I've posted a video on the main page with all of the improvements we made)
We tossed out their one page freebie web page and created a professional one at: www.lakeveronalodge.com
We redecorated all of the guest rooms, and created fun, memorable themes.
We replaced the analog televisions with high definition LCD sets, and removed the 20 foot TV antenna tower in the back of the house and installed DirecTV.
We put coffee makers in every guest room, and upgraded the wireless internet.
We replaced the limited toll call phone contract with unlimited long distance service.
We lowered the price on the two guest rooms that don’t have private bathrooms.
We created a new parking lot in back. We had a concrete pad poured, 4 truckloads of rock installed, and created a large fenced area.
I could go on, but if you’re interested just visit our webpage or our Facebook page at: http://www.facebook.com/pages/Lake-Verona-Lodge-Bed-Breakfast/321169662491?ref=nf
Since we moved here we have been written up in the local newspaper:
http://www2.highlandstoday.com/content/2009/dec/14/couple-brings-casual-fun-personality-bb/news/
We were also recently received the 2009-2010 Avon Park Chamber of Commerce Beautification Award.
This is summer, the slow season, and bookings are scarce. However, for 2011, we are already fully booked during the 12 Hours of Sebring Races in March, and during a few other local events like the Flywheelers.
Our answer to grossly over-paying for this business is to work our tails off to make it become what we thought it already was. We have had wonderful reviews from guests so far, and are encouraged, although a little anxious.
Right now we’re still subsidizing the expenses of the business with what little remains of our cash reserve. We’re both looking for work outside of the house and there isn’t much in this area for people with our backgrounds.
Still, we love our new little town and have made some wonderful friends. We bought a cheap used boat and go out on one of the nearby lakes once or twice a week. It’s hot and humid right now, but we love the sunshine and of course the view of the lake just across from us. We often sit on our front porch in the evenings and enjoy it.
I do promise you one thing – we will never again be anyone’s suckers!
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