Creative Alternatives to Buying Real Estate as part of SBA Acquisition?

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February 17, 2024

by a professional from University of North Carolina at Chapel Hill in Atlanta, GA, USA

I am in negotiation with one company where I initially shared that I would be willing to buy the property in order to get the seller more cash up-front instead of raising the deal price. However, now that I've seen the operations, I don't think the location is well suited for the long term, so buying probably isn't wise.

Any creative ideas on how to get the seller more funds upfront without having to commit to the property over the long term?

The estimated value of the property is $600k, so I'd assume that's too small to do a sale-leaseback (or especially if I didn't want to enter a long term lease).

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Sale leaseback is usually the best option. Outside of that you might be forced to buy the real estate. I would look at what they are asking and what you believe the true market value of the real estate is. We often see seller's undervalue their real estate. If it is an industrial property there might be strong demand for you to sell it post close.

You might also get the seller to accept a lease with a purchase option. If you make the lease attractive enough they might get comfortable with the long-term income. Just some thoughts. Good luck.
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