This week marks our 4 year anniversary of purchasing Wiscasset Woods Lodge.
I often get asked if I always wanted to own an inn. I find this interesting because before purchasing the hotel I worked in property management which I have found to be at its core essentially the same thing (the difference is you rent homes by the month or year instead of rooms by the day or week. Home rentals have more paperwork, hotels have more maid work). Yet, in my entire time as a property manager nobody ever asked me if I’d always dreamed of working in property management. I think this is because owning an inn has been romanticized by TV shows like Gilmore Girls and Newhart and movies like White Christmas and Holiday Inn. I’ll save my critique of these portrayals of innkeeping for another post 🙂
Anyway, the answer is no. I’d never even thought about owning a hotel. Being Innkeepers was something we stumbled into rather than something we actually planned. So how did we end up owning a hotel in Midcoast Maine? I usually start the story with Eric and I meeting in Yellowstone National Park.
We were in our 40’s and each of us were going through a midlife crisis. He had been a high school math teacher in Tennessee where he’d lived with his wife from whom he’d just separated. I’d been all over the place working in environmental education and international development. Neither of us wanted to go back to our old careers and neither of us knew what to do next. So we both returned to Yellowstone where we’d worked in our late teens/early 20’s. Although we’d both worked in the park during the summers of 1988, 1989 and 1990 we never met. This time around we worked for the same company in the same location. I was a cook in the employee kitchen and he was a floor manager in the general store.
When the summer season ended we tried moving to Oregon where Eric grew up. It was the height of the economic recession and with 5 college degrees between us (Eric has undergraduate degrees in Math and Business Management and a masters degree in Secondary Education. I have an undergraduate degree in Environmental Studies and a masters degree in Elementary Education) the most we could find were part-time seasonal jobs. He worked the night shift at Target stocking shelves and I worked as a cashier at JC Penny’s.
We married in May of 2012 and returned to Yellowstone because at least we could have full-time work and housing. When the season ended we found regular work in Bozeman, Montana. He worked as a night manager at a CVS and I worked at a deli in a grocery store. My husband is a “nester,” he always has to buy a house the minute we can afford one. I’d never even owned a house before I married him. In Bozeman houses aren’t cheap, we couldn’t afford to live in the city. We managed to put 5% down on a cabin on a river about a half hour outside of town (incidentally it’s the river where A River Runs Through It was filmed). The house had been on the market for over a year and hadn’t sold because it was dark and dirty. I remember taking a metal spatula and scraping the grease off the kitchen cabinets before I could paint them.
About a year later I couldn’t stand working in food service any longer so we moved 4 hours away to Missoula where I could find a job as a property manager. Eric initially worked as a produce manager in a grocery store before coming over to work as a bookkeeper in the same property management company. We still owned the house on the river outside Bozeman and a duplex in another town. We used an inheritance to cover the down payment.
Even with white collar jobs we were just scraping by and falling behind a little more each month. Within a 3 month period of time each of our rental units had a major problem. One of the apartments in the duplex had a water leak in the roof. The other apartment’s carbon monoxide detector suddenly started screeching (I added a CO detector when we bought the duplex). It turns out the previous owner had installed the wrong type of gas heating system and the whole thing had to be replaced. Then I made a bad choice with tenants for the cabin and had to hire a lawyer to negotiate with their lawyer to get them out. When they were finally gone and new tenants moved in there was a strong smell in the frontroom. I gave the tenants permission to pull up the carpet and they discovered the wood floor underneath was covered in mold. We had to pay to have that mitigated.
At this point we were bleeding money and I knew we had to do something or we would risk losing everything. So we decided to sell the properties. We took a loss on the duplex (a very long story and not the point of this post). So we changed realtors.
This time we found a realtor who specialized in river front property. A day after listing the cabin we received a cash offer for far more than we’d paid for it. We upped the amount and they met it, no conditions attached (remember this is a cabin on the river where A River Runs Through It was filmed).
Suddenly we had money and a limited amount time to spend it. Because the property was now a rental unit we had to reinvest the profit in a business within 6 months or pay more in capital gains tax than we made in a year. So we were very focused.
What was the best way to use this unexpected windfall?
We considered just taking the tax hit and using the money to help with the mortgage on the house we had just purchased in Missoula (you caught the part where my husband’s a nester, right). But it wasn’t enough to pay it off completely, so we’d still have a mortgage.
We really saw this as an opportunity, and perhaps our last opportunity, to do something to improve our lot in life. Five college degrees weren’t doing the trick. So we decided to try to own our own business, but what business could Eric and I run successfully.
We thought about property management but the town we were in already had 38 property management companies and with both of us in our 40’s I wasn’t interested in taking years to build a company from scratch. Plus the money had to be reinvested within 6 months.
We looked at miniature golf courses, but a visit to a nearby course quickly taught us that unless the location can operate year round, they don’t make enough money to survive.
We looked at storage units but the purchase cost was higher than we could afford for the size they needed to be.
Finally we settled on the idea of purchasing a mom and pop hotel. Eric had a business degree and experience in bookkeeping and management. I had experience in property management, commercial cooking, and working a front desk. What we didn’t have was experience cleaning rooms and neither of us had actually worked at a hotel before.
So how did we get from Montana to Maine? That’s the topic of my next post in this series.
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More in this Series
- Ahh, the Finances (part 2)