All Forum Posts by: Todd Ashley

@Karen Schimpf, I am unfamiliar with note servicing companies, although the concept makes total sense. I’m assuming they charge a percentage on the monthly payment? Looks like I need to do a little research on the topic.

@Karen Schimpf

Thanks for the Reply Karen! If we are talking sq footage, no, the liquor store does not occupy 50% of the building. The downstairs and upstairs are roughly the same sq footage and the downstairs is split into two commercial spaces. So based on square footage the liquor store takes up about 25%-30% of the building’s sq footage. There is additional storage space in the basement for the liquor store, but I doubt that counts towards this calculation.

Anyone on BP that currently or recently has owned a liquor store?

@Travis Steinemann

Great find! Did they respond after the first mailing?

@Alyssa Strom

Where/what are the details for the event?

@Gage Edwards

Thanks! Would a loan like this be simpler to execute if I had two years of tax returns showing a profitable business? Also, would having two different LLC's (one for the business and one for the building) complicate the approval process?

@Gage Edwards

I was referring the SBA 7(a) loan when I said “commercial”.

@Gage Edwards

Thanks for the response! That is really helpful info! I believe that initially this would be an owner-financed deal. They would finance it for probably a maximum of five years with a few small balloon payments along the way. That would allow me to have two years of running the business under its new name/LLC before seeking a commercial loan. If I were to go the commercial funding route now, I'm assuming that would require 20-25% down?

Hi all, I am considering purchasing an off-market commercial building in a small tourist town. I am trying to gather as much information and guidance as possible, and appreciate any input that you can provide!

The building consists of two store fronts and a two bedroom apartment. The building was built in the 1800’s and matches the historic architecture of the town’s Main Street. The liquor store inhabits one of the retail spaces and does not pay rent (the building and liquor store are owned by the seller). Rents for the retail space and 2 bedroom apartment have not been raised in over 10 years.

The sellers have owned the building/liquor store since the 70’s and are retiring to move closer to their grandkids. The numbers:

Asking Price: $450,000 including inventory (~$65,000)

Gross Rental Income: $19,200 (2019)

Building Expenses/taxes: $8,211 (no mortgage)

Net Rental Income: $10,989 (2019)

Liquor Store Gross Sales: $471,886 (4 year average)

Liquor Store Net Profit: $124,738 (4 year average)

One of the owners currently acts as the manager of the business at a reduced rate of $20,000/year. The other owner works about 10/hours a week at the register and does not collect pay. Both of these factors would reduce projected profits. I plan to be in the area six months of the year and be involved on a part-time basis. I would hire a manager and keep the current long-term/part-time employees (if they wanted to stay on). Obviously I would need to have excellent systems in place to be able to act as a partial absentee-owner. With the increased labor costs included and the business paying rent to a separate LLC I will create, I am conservatively estimating projected profits to be $75,000 a year for the liquor store. In this model the building gross rents would increase $12,000/year, but keep in mind that there is currently no mortgage payment expense.

I could go on, but I will leave it here for now. Thank you for reading! What are your thoughts?