Deal including real estate

by a searcher from Columbia University

10 months ago

All - Working through a deal on which there's a substantial amount of real estate. I would normally try to just rent the property from the seller, but they want to sell, and its nice property.

Looking for feedback from this group on how you might think through a) valuation implications and b) financing implications. On the face of it, the real estate makes the deal seem rich on a cashflow basis, but there is of course value in the dirt/buildings. Happy to take any thoughts.

1 like
123 views
15 comments

intermediary from The University of Michigan - Stephen M. Ross School of Business

1) If you have the capital for the real estate investment in addition to the business investment, make your offer contingent upon the lower of your bank's appraisal of the real estate or a maximum monthly payment you can afford for the property while maintaining sufficient cash flow and ROI from the business. 2) If you do not have the capital for both the real estate investment and the business investment, then find a partner, e.g., a REIT or other real estate investment group, who will purchase the property with your lease in place. 3) If you or a RE investment firm cannot make business sense of the real estate as part of the deal, it isn't the right deal for you.

10 months ago | like reply | 0 likes

searcher from The University of Chicago - Booth School of Business

Following

10 months ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Sorry, but you are a broker's worst nightmare ... and how to fix it

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.