All Forum Posts by: Craig Garrow

@Jake Fugman My thought is that he would stay on at least a year after the “transition.” He’s been in business for 40 years and has lots of connections. He’s sold parents, their kids, and grandkids. So, I do see some value in that, however I do realize that we aren’t talking huge monetary value for the goodwill, etc.

@Seth Nadreau Thanks! And that’s awesome - congratulations! My initial thought is to do a down payment to “buy in” and then upon retirement, do a percentage of the gross sales for a set number of years to pay it off, rather than a set number or signing a note or something of the like. From what I can see, that seems to be a pretty clean, and popular way to sell a brokerage business like that!

I’m a 32 year old associate real estate broker, and I work for a small broker here in town who is 69, and getting close to retirement. I know that before too long, he is going to at least want to slow down, so I am thinking of offering up some sort of partnership where I could take on more responsibility, get some equity in the business, and eventually buy him out upon his retirement. I’m just looking to see if anyone has done anything similar to this? How did you set it up, and how did it work out?

Is there such a thing as pre-marital assets being treated differently than assets acquired after marriage?

I’ve thought about starting an “informal” BNI with local business owners. Maybe a breakfast once per month and sharing leads.

Arthur Clark I agree with Dennis M. - don’t muddy the waters. Use it to negotiate a better price and/or better terms. As far as the purchase price, as long as it cash flows, it’s worth the learning experience for sure. Especially if you can rehab it, rent it, refinance it, and get yourself into another deal down the road!

Arthur Clark I did a 15 year amortization with a 5 year balloon payment. Fixed interest rate. If I could get the seller to carry for the term, that would be ideal, but I think most would want the balloon at some point.

Arthur Clark I love the strategy. I just bought a duplex this way! Anytime you can use OPM to make money, it’s a beautiful thing!

Brad Tom Certainly not the intention here. The thing to keep in mind is that this deal is going to largely depend on me managing the business, increasing the income, controlling expenses, and forcing appreciation over the 5 years that I’m going to be married to it. All that time, the investor is going to make the lion’s share of the cash flow (as he should) plus get his initial investment back in the end. Even if he only got just the $6000 per year, that’s still 13% on his money plus half of the upside from there. I get a small trickle of cash and equity on the back end. Doesn’t sound like a bad deal for him at all! I should add that he proposed this to me.

Hey Michael Wagner thanks for the reply! The only way I would do it is if the return to the investor is paid out of the revenue of the business, and not guaranteed by me! Income now is pretty low due to the rents being significantly below market. Purchase price (hopefully) will be $45,000. Investor wants $500.00 per month after expenses are paid, and that’s about what this should produce. There are 24 units, and just raising the rents $10/month each will get me at least a little “dividend” for now, until we add boat and RV parking, which we will be splitting 50/50 as well. We plan to file a DBA in both of our names, and I definitely want to have a partnership agreement written up by an attorney, which includes my option to purchase the property for $45,000 in 5 years (which will be recorded with the county clerk.). I think I can reasonably expect the property to appraise for $75,000 in 5 years, especially with the increases in income. As far as the real estate is concerned, I think the plan is for me to put down about $5,000 up front. Even though I’ll have the option to purchase recorded, should I ask to be put on the title as having 10% ownership of the real estate itself? Or should I not worry about that since I’ve got the option and keep my name off from it until I actually purchase? Thanks again for all of the help!