All Forum Posts by: Chinmay J.

@Jim Shepard - Thanks for the tips. A while back, when I first started toying with the idea a few years ago, Subway was my first stop on this journey. I found the corporation people extremely difficult to deal with.  They seem to have some policy where they don't grant franchise rights to first time franchisors who are trying to buy a brand new store. You said it correctly !. They are overbuilt. There is practically a Subway restaurant on every corner in my neighborhood. Just in my zip code, we have 4 of them. Now, that you bring up Subway (in our conversation) I wouldn't mind looking at it with fresh set of eyes and see if anyone is selling (and at what price)

I also wouldn't mind working at a Sub Shop for couple of weeks. I make pretty good money at my day job, but I don't have any inferiority complex or any such hang up. I believe in "whatever it takes" attitude.  In fact, Jimmy Johns has 7 weeks of training and 3 out of those 7 is an apprenticeship at an existing JJ location.

I do have a very good CPA, but need to work on GC and a good attorney, so will be putting those pieces together.  Your idea about camera is outstanding and $4k is not a big price if that's something that can pay for itself in a year's time. 

Lastly, I am not doing this because I want to quit my job and sit at home. I am doing this so I can be my own boss, and rewards of business ownership are always sweeter (provided you succeed) than those of a job at least in my opinion.

Have fun at the beach sir. I hope you are going some place warm LOL

@Joel Owens  - Thanks for the tips. Its not a brand new franchise. Its a sandwich shop called Jimmy Johns. A quick and dirty search on their website shows that there a few in your city of Canton, GA.  So I am sure you are aware of the brand. 

To answer your question, this would be my first time trying to own a food business.

As far as buying a resale store. That's a good idea if I was ready to pay the premium. Not a bad idea if seller financing is something that can be arranged with Franchisor's approval. There were two of them in Winchester, VA that were up for sell not to long ago.

@Jeff B. - I understand all that. In fact, I will be owning nothing except the equipment and right to run the franchise. I will also be signing a lease for the property. 

I was strictly looking at input for acquiring the business from lender's POV.

@Lawrence Taylor - That's classic definition of mortgage fraud. If you really want to do it get an investor loan (25% down and around 5% APR these days) or live in one of the units for about an year. Once you live for an year, you are in the clear and can move out if you'd like.

I have been toying with the idea of buying a food franchise, and have been working towards it for last couple of years. I calculated my current debt to income ration at 37%. It does take into account my current salary though. If I do get the right to run the franchise; however, that will be replaced by income that will be generated from the operations of the franchise. No money coming in from my job takes my DTI to 93%. It doesn't take a genius to figure out that I currently make most of my income through my day job.

I do have all the requirements like down payment to qualify for the loan, as well as total asset requirements (around $300K) taken care of. Also FWIW, my credit score is over 800 (FICO 815 as of last month).

So my question to you guys who are experienced in lending/finance is how am I looked at by a potential lender. I will be seeking out SBA lender. What are the things to be considered (from a newbie's POV) that I could be missing. Its one thing the franchisor giving OK to me, but its a completely different ball game for me to get the loan. My target date  for applying is Oct 2017. So I basically have 10 more months to take care of anything I might have missed out on. 

So fire away guys and gals.. Don't hold back. ( I despise political correctness. So tell me I am an IDIOT if you must, as long as you can justify it with proper reasoning).

@Javier Bustos - Fannie and Freedie are GSE (Government Sponsored Entities) which back majority of the home loans made in the country. You might be going to your local bank or broker to get the mortgage, but in turn they go to Fannie and Freedie to back a good percentage of the loans. In turn, Fannie and Freedie outline the guidelines for the banks to use. There are other agencies in the country also, but they are far less known. Agencies like VA, USDA, Sallie Mae (I believe they are out of business, but don't quote me on it) etc. Agencies like these are supposed to make home ownership affordable.

The way I look at it is that its a propped up bubble by the government.

@Mike Woods  - Looks lovely. Can you give us a skinny on the numbers?

Nice job..

@Michael Trout  - I lived in York, PA for 4.5 yrs and know the city very well. I never considered the place unsafe. Even the ghettos are not bad. I know that area pretty damn well. Care to elaborate in which areas your said properties were located?

@Miles Curtis - I concur with @Natalie Kolodij. If I did not have a long standing relationship with my CPA I would be talking to @Brandon Hall myself.  Here is the link to his podcast. 

https://www.youtube.com/watch?v=JSwMOR2H-Po