How can I buy an 800,000 business with real estate on 90,000 a year. - Posted by David

Posted by David Alexander on March 15, 2000 at 11:47:48:

and see if the deal really works… SELL Cashflow.

How can I buy an 800,000 business with real estate on 90,000 a year. - Posted by David

Posted by David on March 15, 2000 at 10:56:33:

I wish to buy a very lucrative south florida business along with the real estate ( in very disirable area.) Problem: I only make 90,000 a year. How could I structure deal.

Re: How can I buy an 800,000 business with real estate on 90,000 a year. - Posted by JohnBoy

Posted by JohnBoy on March 16, 2000 at 09:57:45:

Structuring on how to buy a business will have nothing to do with what your current income is. It will be based on what that businesses income is.

What type of business is it? Service business, retail, manufacturing, import/export, etc.???

Does it have any kind of equipment it uses to run it’s operation?

Will you be running the business yourself or plan on being an absentee owner letting someone else run it?

What experience do you have with this type of business?

Why is the seller selling? Why do you want to buy it?

How much is the real estate worth without the business?

What does commercial real estate simular to this building rent for in the area? How much per square foot? What is the square footage of the building?

You need to seperate the real estate from the business to determine what each part is worth. How much of the $800k asking price is for the business Vs. the real estate?

Will the seller sell the business and lease the real estate, or does s/he want completely out?

Does the business have anything to be concerned about with EPA issues like possible ground contamination?

How is your credit?

How long has the business been in operation?

How profitable is it currently?

Does the seller still owe anything on the business or the real estate or does s/he own it free and clear?

What can you do to maintain it’s current level of sales and improve the business to make it more profitable?

Will you be leaving your job to run the business or planning on keeping your job?

Are you prepared to committ to numerous hours each day seven days a week to insure the success of this business? Do you have family that would be affected by this if you had to put in 16 hour days to make this work? Are they willing to be supportive and live on less if this affects your current income if the profits aren’t there?

We really need more information here before we can help. As far as structuring the deal to get it financed goes, there are a number of ways to get it done depending on the type of business.

Give us some more information and I can give you some more to go on. I’ve done 4 business deals using 100% financing on everyone of them. All the businesses are the same type of business and each one was structured differently on getting them financed. So if you want to get more into this and are seriously considering this business I need more information before I can help.


Consider Seller financing - Posted by Michael Morrongiello

Posted by Michael Morrongiello on March 15, 2000 at 18:45:24:

The other posts are correct. More Details are needed and also the additional questions need to be addressed:

  1. What amount of a CASH down payment are you capable of putting down?

  2. What is your credit and employment background like?

  3. Do you have any experience in running the type of business your are wanting to acquire?

  4. How motivated and flexible is the seller?

Commerical properties in general and commercial properties that also have an ongoing business associated with them are DIFFICULT to finance. The seller most surely knows this. So many small to medium size business that have real estate involved involved some degree of seller participation when it comes time to sell.

Probe some more and advise us of the details.

To you sucess,

Michael Morrongiello

You need a ladder - Posted by Tyler

Posted by Tyler on March 15, 2000 at 12:32:04:

That’s like saying, “I want to get on top of my roof, but I’m only six feet tall.”

If you planned on paying cash for the deal, you’re obviously out of luck.

But the fact that you make 90k a year, may be totally irrelevant.

That’s what leverage is all about.

You’re going to have to get a ladder to get on the roof.

Tell us about the actual numbers, and we’ll see if we can help you find that ladder.

First you need to tell us about the biz. - Posted by Bassman

Posted by Bassman on March 15, 2000 at 12:17:51:

What kind is it? What kind of machinery? What do they sell? How much real Estate? What do their financials tell you ? How much in sales?
You can be as creative with this kind of deal as you could with regular Real Estate, but we need details first. Kinda silly to ask how to do it if we know nothing about it???
Are you wanting to buy it for cashflow, for a job ,as an investment,cuz it looks cool to say I own that biz?

Just some thoughts.