This business owner ran an adoption agency that helped house families in addition to providing services. For years, she had been putting up her clients in hotel rooms – at a huge annual expense to the business. Luckily, she was able to find a 7-bedroom mixed-use property to alleviate that expense. With tenants in the retail space below, the building helps pay for itself!
In addition to purchasing the mixed-use property, the buyer also wanted to refinance her other owner-occupied office property at the same time. We were able to do the purchase and a $475,000 refinance using SBA 504 loans (for both, simultaneously) with 25-year fixed rates under six percent (6%).
However, this was not an easy transaction to close. When the appraisal came back almost $100k lower than the asking price, the buyer asked us to work with a very difficult seller’s broker to keep the deal on the tracks and convince the seller to lower the price to match the new appraisal. In addition, we had to restructure the entire loan – both parts – to fit the new uses of proceeds.
Now, our success in refinancing and funding this challenging purchase will allow the business to convert its investment and realize an additional six figures in EBITDA.
Or, as we say – she paid herself to buy the property. This is another example of how owning your own business real estate can significantly increase your business’s profitability!
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