We have found a great B&B for sale. The owners are splitting up and want to cash out. We think we can get it for the right price, around 1.5 mil. The owners have committed a number of zoning violations related to unpermitted events and have lost their permits, therefore are selling as a residence and are unwilling to show income statements. We have been assured by the county that permits can be obtained by a new owner through a 3 month process.
Is there any way to buy this with 20% down and no past income records? Our very conservative income projection shows a positive cash flow about 8 months out. Most likely is 5 months out. The number of rooms and other facilities makes it easy to make money every month. I have a very good credit rating and will be taking equity out of my primary residence for the down payment. Is there any chance of finding a lender at reasonable rates to fund this? Would I be better off finding a couple of investors to increase the down payment? And if I do, how can I structure it as an investment in the property? I don't really want to share the business proceeds if we are doing all of the work.
Thanks!

do you intend to live onsite ?

Yes, we plan to live on the property and keep our current house to rent. Would that qualify us for a residential mortgage?

You mean the zoning has be re-assessed to residential and the appraisal complies with this?
What is the history of this building is it a large mansion, one that was built as a single family residence?

You will be req to put a min 10% down. You should be able to get a 75-77% Loan of the lower of either the purchase price or the value of the property. The rest could be seller 2nd. Do give me a buzz if you have any questions. Thanks!

Thanks for the replies. I didn't realize this had been discussed a few weeks ago. Nothing showed up in the search for "bed and breakfast" but in browsing, I found a previous thread.

The zoning is currently AR-2 , Agricultural/Residential, B&B is a permitted use within AR-2. The problem is that they were originally classified as a B&B homestay allowing rental of three rooms and permitting events, like weddings, by special exception. After expansion, they had been granted an exception to rent up to 9 rooms and to run up to 10 events by permit, but they ran more than 20 events without requesting permits and were caught. The new owner only needs to resubmit for a zoning reclassification and the restriction will be lifted.

The current property is 1/2 old house dating around 1850 and 1/2 new construction. There is a 2 bedroom owners house, 4 bedroom/baths in the attached original structure , and 5 bedroom/baths in a new addition. Also a 2500 SF banquet room and 2000SF solarium. So 9 rental rooms total.

The neighbors call it the "wedding factory". The financial projections look really good based on what we know they were charging for rentals.

From the zoning classification alone, I would say this could be financed as an owner occupied residential property.....with a creative lender, of course. I would first order a residential appraisal...the $350-$400 it may cost would be well worth it considering the rates and terms available should it be possible. Considering the cost of a commercial appraisal is at least 3 times that amount....and takes 3 times as long.....I think that this would be a good initial step. As a primary residence, you would not have to disclose the financials of the property, eliminating that step entirely. I spoke with a "jumbo" (loan amounts over conforming limits available to residential customers) lender about a similar scenario recently, and the lender confirmed that if the property is zoned and appraised as a residential property, past usage of it would not be an issue. My company can do residential and commercial loans in your state....call me if you'd like to discuss your options. I can be reached on the cell phone number listed in my signature any day of the week, any time of day. Best of Luck to you!