Hello Fellow Searchers -

I am exploring the acquisition of a $2.5m EBITDA business (~$2m FCF). The business owns a couple of real estate assets related to business operations. We had negotiated a purchase price of $7.5m for the business ($5m SBA debt, $1.5m seller note, $1m equity), with the assumption that we were going to lease the properties. However, the seller has shifted to wanting to sell the real estate along with the business.

We are currently exploring a sale leaseback (purchase price of the business may come down if rent increases), but I am curious around our potential options to acquiring and funding the purchase of the real estate ourselves, given controlling the real estate for the long-term could prove beneficial. From our conversations, it seems the value of the real estate is roughly ~$7.5m for an owner/user.

Does anyone have experience in purchasing the real estate alongside the business, and how they decided to fund/structure the purchase? Any insights much appreciated!