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Help with Business

The last post in this topic was posted 4816 days ago. 

 

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There is a piece of property that I think would make an awesome buy for a very nice retail store. The road is heavily traveled and growing state route that has a new Wally World just 2 miles away and Home Depot being built amoung others. The property is a corner lot and has 4000 sq foot of building space and was previously a gift shop. The owners retired and have it up for sale with no inventory, they sold it all wth an auction. Talking to them they told me there was not any year in 30 years they did not profit at least 40k and many years well over 100k from an upscale type gift shop.

 

Being out of the business loop for many years I feel this location would do even better with addition of products that will suit the people traveling on the road. They maintained a gift shop but I see it as more of multi purpose type business, adding antiques, small garden center, good clean used furniture and would be an awesome small snack bar type location as well.

 

What I need is assitance as far as financing, being out of the loop I do not know how to find the financing for this type of project because it would include the property and funds needed to purchase inventory, upgrade a bit and hire help to run the place etc.

 

I would need funding for both property and inventory, with all you guys/gals knowledge and always on top of business endeavor ideas, I could surely use some help with this.

 

I looked into SBA but probably not an option, looked at commercial lending alittle and didnt find anyone who would do both.

 

Any ideas would be appreciated.

 

I purchased another piece of property not too long ago close to this property and did well with it, but it didnt have this type of potential.

 

Thank you for any input!

 

Beachfamily

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Is there a Community Capital Fund in your area? Where I live, there's one and you can only apply if the city's economic development team is willing to sponsor your application (meaning that they think there is a 65%+ likelihood of business success). Funds can be used for buildings, land, capital equipment or inventory only--which pretty much covers what you'd be asking for! Here, minimum loan is $100,000 and maximum is $1,000,000. Good luck in your financing search...I'm doing SBA paperwork as I write. :swoon:

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Normal Financing for a brand new start up business with no track record that includes purchasing property and all of the needed inventory for the business will be a very, very hard sale to lenders. You will need an outstanding 5 year business plan, experience in retail management or business ownership, strong personal assets and very good perosnal credit and be prepared to PG everything with not only your credit but also your personal assets. The best way will be to try and find investors or a liberal investiment firm as most banks probably would not bite for complete package financing as you have stated it.

 

 

Remember also, property ownership is not need. In fact probably 90%+ of all retail businesses do NOT own their stores or property. This includes the BIG name retailers who instead lease them, many built to their specs in shopping centers after they sign 10-20 year leases with big property developers.

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We had our own business for 11 years so that is not a problem.

 

Won't ever put PG on any business, ever........ Been there and done that and was a stupid move. PGing anything over 5k is a huge mistake.

 

The property itself is the gold mine, put this type of business in a strip mall atmosphere and it will not go because they limited you to what you can do and this property already has customer base built up for more then 35 years.

 

The property value itself is more then enough to cover any lenders back and more.

 

The property is a gold mine, the old couple made a small fortune in their store and never left it, they ordered in all there merchandise and never attended a gift or trade show, ever!

 

The property can be bought below what I feel is the value of it, looking at some comps an old gas station on the next corner that is run down and needs a huge amount of repair just sold for 110k and a small lot.

 

The last time they had it appraised was 1997 and they told me it was worth 185k then and they added allot since then.

 

I am looking at some comps and think it should be valued at well over 250k.

 

Community Capital is also a great idea but it is not in the city and not in an economic stuggling area thanks to Wally World the prices have went out the roof on prime land with front road access like this. Most like this property on corner lots have sold for more then double their value since Wally World.

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Question you might want to ask yourself then.

 

If it is such a "gold mine" and such a great location and the former owners made a fortune there, then how come it can be bought below market value?

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Your options are extremely limited since you refuse to PG the deal. You may want to ask the current owners to take back a mortgage. You can also negotiate some floorplanning with some of the vendors. Without a strong business file and without a PG, I don't think anyone will touch this. Even an angel investor will want you to have some equity in the business. I would also be concerned with why the previous owner sold the inventory if it was such a "Gold Mine"? Why not sell it intact? Also, the definition of a "Gold Mine" may vary, working long hours in a retail environment to make $40K to at most $100K in a great year may not make sense? This profit could be easily consumed if you need to hire employees instead on managing the business yourself. I assume that this is a rural location as the price is so low since in my area you couldn't buy a shaved ice stand for $200K :( I would look real closely at the prior owners books if you really think it's worth pursuing and negotiate with them. No bank will lend on this without a PG, in fact most wouldn't lend with a PG unless you offer a substantial down payment. Good luck.

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Question you might want to ask yourself then.

 

If it is such a "gold mine" and such a great location and the former owners made a fortune there, then how come it can be bought below market value?

 

It has not been appraised for years and as far as I know I am the only one who has done the comps on this property so far.

 

He told me he will not put it into a realtors hand to sell. I firmly believe if they did it could be listed in the 250k range with no problems.

 

I see the growth coming this way rather quickly. With Wally World and Home Depot along with a new Arbys, BK, KFC the traffic will continue to grow.

 

I asked him if I were to find financing for this property I would need some income verification, he opened up a folder and told me have at it.

 

He profited more then 70k last year after expenses and this was only being open part time with limited products to sell.

 

They are way out of the loop as far as building on the potential of this property with new products, ideas and marketing. It is a gold mine because I know if he could do that and be in there 70's and not attend a trade or gift show, I know I could do far better with vast knowledge of trade shows, gift marts and antiques.

 

I have bought items right out of there store and resold them on ebay for crazy profits.

People bring him antiques all the time to buy.

 

We have 30,000+ feedback on ebay selling products from these shows, marts and auctions and have far more ideas with the business then they would ever know.

 

It would be a perfect ebay listing location, traffic on this 2 lane highway is amazing as well as addition of a small snack/ ice cream store, garden center and more then enough room for a drive through.

 

His customer base is already there and could be built on enormously with new products and ideas they never had.

 

Business plan would be simple with this potential.

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Your options are extremely limited since you refuse to PG the deal. You may want to ask the current owners to take back a mortgage. You can also negotiate some floorplanning with some of the vendors. Without a strong business file and without a PG, I don't think anyone will touch this. Even an angel investor will want you to have some equity in the business. I would also be concerned with why the previous owner sold the inventory if it was such a "Gold Mine"? Why not sell it intact? Also, the definition of a "Gold Mine" may vary, working long hours in a retail environment to make $40K to at most $100K in a great year may not make sense? This profit could be easily consumed if you need to hire employees instead on managing the business yourself. I assume that this is a rural location as the price is so low since in my area you couldn't buy a shaved ice stand for $200K :rolleyes: I would look real closely at the prior owners books if you really think it's worth pursuing and negotiate with them. No bank will lend on this without a PG, in fact most wouldn't lend with a PG unless you offer a substantial down payment. Good luck.

 

Your post came in as I was typing. Down payment is not a problem. The house on the property could be rented for more then half the payment amount.

 

And yes, we thought of the idea since the buildings are so huge to add an antique mall type of atmosphere in part of it thus creating no less then 125.00 per month for an 8x10 space.

 

DW and I already thought of this and actually measured one part of the building and you could easily get no less then 40 dealers/vendors in just the end of the building.

 

I sell in antqiue malls myself and pay anywhere from 125.00 per month for an 8 x 10 to as much as 250.00 for a 9 x 13 in rent.

 

Yes, it is rural but will not be for long as growth is moving this way quickly.

 

If he made 70k with limited ideas and products I am sure we could more then double that with no problems and not working it 24/7.

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Are you going to look into private investors to fund this project ?

 

I really don't know yet, I am looking at all options at this point. Actually was hoping for get some ideas from you guys on this before I do anything.

I have one of those "gut" not sleeping feelings about this.

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Update !

 

Great News. :D

 

I spoke with a local banker about this property last week and got a pre approval as long as the appraisal came in at 250k or more. He told me that the property itself would serve as enough security and equity for the loan no matter if it had inventory or not. It will be owned by a newly formed LLC.

 

( The 4 bdrm home on the property along would rent in the 800.00 per month range covering a huge chunk of the payment not including the huge potential it has)

 

I had to pay out 300.00 to get an appraisal then I got permission from the owners to have it appraised and it came in at 279k !!!!

 

I have been speaking with my attorney about this and this morning we met with the owners of the property to have them sign a contract for 200k. They signed it and once the financing comes through its a done deal.

 

Wow, what a break this would be to own our own business again with this potential. We will drop it into an LLC with absolutely no PGing... which I am dead against for anything above 500.00

 

All we need is to go over our business plan of what we see this place doing. We can finance the inventory through the LLC.

 

The best thing is not only the automatic equity but instead of being on the wholesale side of things like we were for years, when we had 27 employees, we will be on the retail side of it and can run it all with about 4-5 employees.

 

DW thinks a pit BBQ would fly as well as the retail side of many things such as gifts, antiques, garden store, convenience store, ice cream, pizza, hot dogs and hamburgers etc. There is enough room for even a few gas pumps later on.

We are totally excited and ready to go. What an opportunity for us.

 

Thanks everyone for your input !

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The property is ours !!

 

We close in a few days. What a great buy.

 

All I can say is wow.........................

 

24 months ago I couldn't buy a car, now a new home, a new truck and a new property to start a great business in, great Florida vacations again... we are so lucky!

 

Very easily shows what can happen with allot of effort and positive thinking.

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The property is ours !!

 

We close in a few days. What a great buy.

 

All I can say is wow.........................

 

24 months ago I couldn't buy a car, now a new home, a new truck and a new property to start a great business in, great Florida vacations again... we are so lucky!

 

Very easily shows what can happen with allot of effort and positive thinking.

LAUGHING OUTLOUD I AM SO PLEASED FOR YOU :swoon::yahoo: :yahoo:

YOU SO DESERVED THIS REALLY SCREAMING (inside since kids are sleeping) HAP-HAP-HAPPY FOR YOU!!!!!

WOW after ALLLLL that hard work ~ All of it, all those headaches, all that learning about deletions, all that STRESS all that etc ETC ETC !!! WOW! Incredible amazing awesome spectacular fabulous WOOOO HOOOO !!!

 

I am sooo glad I opened this thread ~~~ :yahoo:

 

ooooh see now YOUR SUCCESS STORY is even MORE :yahoo:

 

what a great great smart clever person for this good news to come for. I bet you're so excited you still can't hardly sleep ! *LOL* !!! Way to GO!!!

 

 

ETA: LUCKY!???? are you KIDDING?!?! NOOOOO no no no no , well maybe a tiny tad lucky , but honestly it was your HARRRD hard smart Work !!!

Edited by slow_but_eventual

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This place has even more potential then we originally thought after spending some time on the property.

 

I wish I could post pics but it is vitally important that no one post items that would link you to your ID.

 

For those who encouraged this venture thank you, for those who didn't, I suggest positive thinking goes a long way, for us, we have been in business long before the most of you, had 27 employees at one time and knew it could work if everything is in line, I just wanted some help because we have not had a business for a few years and was rusty.

 

If you have a dream, it can be done, you just got to think positive and act on it.

 

We are ready to roll, this time it wil be a business that no cheap global importer can steal from us.

 

I cannot urge people enough to never PG anything that you cherish, the bankers dont give a crap about you or your family, they will take it in a heartbeat.

 

Be careful PGing anything. Been there, done that and wont do it again.

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