It’s not for everyone, but a well-established business with planned knowledge of their space needs for the next 5 to 7 years should seriously consider a purchase. Yes, cash or financing has to be available, but if that can be overcome, then start looking. There are still some good bargains available, especially with smaller properties.
A few tips:
- Location: Buy in a location that is good both for your business and for future area growth potential. Cities and towns have a definite growth pattern; it may be spreading out in a new direction or it may be “in-fill”. Part of the search criteria is defining these parameters.
- Financing: the economy is still in an uncertain recovery mode and cash is still tight. Small landlords may be in need of cash or at least an opportunity to get away from mortgage payments. Consider asking the owner to carry your loan for a period of time. I recommend a 20 to 25 year amortization with a balloon in 5,7, or 10 years.
- Consider other sources. With banks paying virtually nothing on deposits, there are investors looking for alternate investments that can produce a higher return. Your building may be such an investment.
- Don’t forget family and friends that may wish to be investors in your building with a definite payback schedule.
- Property condition: Location and future value should be the prime factor in determining where to buy a business property. The condition of the property will depend upon your ability to use it “as is”, with minor renovation, or with a complete remodel. ( cash availability is the prime consideration)
Within our company structure we have a full service real estate firm (Arizona Real Link) that can help you in analyze if purchasing a business property is good for you. (Please e-mail me with questions)
Owning your business location has other benefits: equity build up, retirement planning, employee retention programs, etc. Over all the up’s and down’s that our country has experienced, real estate has most often been the source of wealth for those that purchased in the down time.
In anything you do, don’t be caught saying, “I wish I had”.
Nick J. Petra
Nick Petra firstname.lastname@example.org Contact me to discuss your business situation.
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