How Real Estate Investors Benefit Biz Brokers?
It’s hardly news that a building and property can have significant value, sometimes as much or more than the business on it. And many people seeking to buy a business simply don’t want to pay for or own the property. In situations like these, business brokers often sell the business and the property separately. Handsome Homebuyer, as well as other real estate investors, often becomes a business broker’s best friend in these situations – or at least an ideal customer.
Selling the business and property separately
Business brokers often sell businesses that come with property. Most deals involve the business – and the land. And that means a higher cost than just buying the business. But if someone wants to buy the business but not the property, we can purchase the property and lease it to the new business owner. That lets the business buyer pay much less, making the deal more manageable. And it gives two sources of income to the seller.
A wide range of deals
Some real estate investors specialize very narrowly: We have a lot of band width at Handsome Homebuyer, although we specialize in Long Island and the New York metropolitan area. We buy a variety of properties: The business is irrelevant to the property. That means we can be a good buyer for business brokers seeking to sell a wide range of properties. Whatever you’re working with, we can work with you.
How we work with business brokers
We works with business brokers in various, different capacities. A business broker called me the other day about dentist practices he’s selling. A dentist frequently will buy the dental practice and not want to own or not be able to afford the real estate. He makes a deal to sell the business and brings us in to close on the building at the same time and give the dentist a new lease. It’s more affordable for the dentist, who doesn’t face a huge upfront expense.
Two sales are better than one
A lot of mom and pops own real estate, where the business isn’t worth as much as that real estate. The real estate is worth everything. They try to sell the business, but nobody can afford to buy the business and the building, so they end up selling the real estate by itself in addition to a deal for the business. Handsome Homebuyer, as well as other real estate investors, can be a good buyer for the property.
When the building is worth more than the business
In some cases, a building or a property is simply worth more than the business. In other words, whoever buys it is likely to rebuild or alter what goes on there significantly. A business broker reaching out to people who will continue the business may be missing out on the real buyers: Those who want the property. The business may not be selling, because the building is worth more than the business. Business brokers come to us to just sell the property. We know how and are willing to renovate.
Real estate relationships
When the property is worth far more than the business, it’s important to know what to do with the property. In one case where a business broker was trying to sell the business, I ended up buying the real estate. We’re going to build an assisted living facility there. The owners are going to retire and really aren’t able to reach that kind of a deal. They didn’t have the relationship, the vision, the zoning knowledge, the connections, the network, the capital necessary to get approvals and the renovation and rebuilding expertise. We had to get variances for height and lot coverage as well as laying out money for architectural plans and site approval.
Sometimes there is an environmental situation. And because of that, sometimes properties aren’t mortgageable. Or people don’t want to touch them, because they have an environmental hazard or require a clean-up. Dry cleaners and gas stations often need environmental clean-up that can be expensive and time consuming. We’ve done these before and will do them again. At Handsome Homebuyer, we have a lot of experience at cleaning up environmental problems. We add value. And that lets us pay more for a property, based on profits we anticipate from a sale after we pump in money and do work.