Bed and Breakfasts, Cap Rates &amp; Valuation Question
My rental business is very niche and unique to the city in which I live and due to the pandemic I have the opportunity to acquire two Bed and Breakfasts properties that are going out of business (for obvious reasons).

These properties are perfectly located and the bedroom configurations are ideal for my model. My thought is to stabilize these properties by filling them with my rent paying customers for the next 12 months and then refinance the properties based on an income approach using local cap rates.

Can you point out where I might run into problems with this thesis? I don't have a costar subscription so if someone would tell me where to find cap rates for stabilized Bed and Breakfasts in the mid-atlantic region I'd be grateful. Thanks all!
[{"id": "ge5p04s", "text": "Hotel appraiser here who also does some B&amp;B valuation. You'd have to have a decently long operating history (a few years) or at least find an appraiser who has access to a lot of reliable comp data to get a valuation done on an income approach basis. They might do a quick revenue multiplier as a test of reasonableness, but are likely going to rely on sales approach for something this size. B&amp;B's in my experience are not valued on a cap rate at all, rather a revenue multiplier.", "replies": [{"id": "ge64g3e", "text": "This is super helpful. How do I find out what that revenue multiplier might be for my city? Does Costar have this data or is there another trade based site you use to do your analysis?", "replies": [{"id": "geat0cq", "text": "Revenue multipliers are derived from the market itself. Essentially you would need a few comparable sales where you know their gross revenue. Sometimes this is made public, sometimes you need to contact some agents or property owners and ask them.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gebkvmd", "text": "You need to make two valuations.  One for the real estate and one for the business.  What would stop anyone from buying a similar big house and making it a BnB?  If nothing then you would just value the real estate using sales comps.  Usually the business is just a multiple of the gross sales but if there are no booking then the only value would be the personal property such as beds, etc.", "replies": [], "depth": 1}, {"id": "gehf93c", "text": "Niche business that can reuse B and B - halfway house or sober living?", "replies": [{"id": "gf2bf08", "text": "Not bad ideas but neither actually. It's way more niche than those and a model uniquely suited to my city.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gej73cx", "text": "[recaprates.com](http://recaprates.com) appears to be relatively new (only a few markets so far) but source of easy to digest cap rate info.", "replies": [], "depth": 1}]