Looking to buy existing daycare - Charlotte, NC

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Looking to buy existing daycare - Charlotte, NC

Natalie Bush

Charlotte, NC · Member since 2015 · 10 posts · 2 votes

Looking to buy existing daycare building. Preferably in University Area of Charlotte.

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Joel OwensBusiness Member

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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

Your post could be clearer.

Buy a daycare building as in a NNN investment OR buy a daycare business to run as an owner/operator? 2 totally different worlds.

If looking to buy a business look on bizbuysell.com

That is Loopnets sister site for businesses being sold rather than properties.

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Antoine Martel
Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes
9y
Interesting. Have you looked on loop net for this type of thing?
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Stephen Kiser
Wholesaler · Kannapolis, NC · Member since 2014 · 99 posts · 28 votes
9y
What is your budget?
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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
9y
Your post could be clearer.
Buy a daycare building as in a NNN investment OR buy a daycare business to run as an owner/operator? 2 totally different worlds.
If looking to buy a business look on bizbuysell.com
That is Loopnets sister site for businesses being sold rather than properties.
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Jeff Kehl
Rental Property Investor · Charlottesville, VA · Member since 2012 · 1k+ posts · 726 votes
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@Natalie Bush I have 2 daycare buildings (the real estate not the business). One of them I lucked into as a foreclosure. The other one I found by sending letters to the people that owned them in my town. I would suggest that because they are smallish commercial properties so I think brokers don't bother with them much. Also I found most of them to be owner operators and they never really considered just owning the business and renting the real estate until I suggested it to them.
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Natalie Bush
OP
Charlotte, NC · Member since 2015 · 10 posts · 2 votes
9y
Thank you all for your responses.
@Antoine Martel and @Joel Owens - Yes I've looked on loop net and buzbuysell.com. I did not see much on either. I would be buying the business to run as an owner/operator.
@Stephen Kiser - I'm currently working through my budget to see what I really can afford. I do not have cash on hand so I will be looking for finance.
@Jeff Kehl - That is really good advice. I will have to give it a try. I am looking to do something a lot smaller than what is currently out here. Sending letters to the smaller up and running businesses maybe the way to go. Thanks!
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Jordan Lane
Bethesda, MD · Member since 2017 · 7 posts · 3 votes
9y
Jeff Kehl How did you structure the deal so that both parties would benefit from them selling to you? Thank you
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Jeff Kehl
Rental Property Investor · Charlottesville, VA · Member since 2012 · 1k+ posts · 726 votes
9y
@Jordan Lane
It's been awhile since I've taken accounting classes, but one thing I remembered was that it is always better for a business to rent than own their space. Why? Because if they rent it's a straight expense deduction. If they own then they are taking depreciation much the same as you would on a rental property. That's why you see all major corporations/franchises sell the real estate to an investor and then NNN lease it back.
Many small businesses don't necessarily get that though.
So starting off with that, the seller's accountant confirmed it would be a good move for them. Also, they needed capital to expand their business. So they got what they wanted which was a chunk of cash up front and I got what I wanted which was a good return on my invested capital.
The seller had a recent appraisal on the building so I offered them a bit less than the appraised value and we worked out a rent that is comparable /sq ft to similar properties in town.
The seller gave me yearly rental increases and I gave him the option to buy the property back from me any time during the 5 year lease term because that was important to him.
One of those classic win-win deals.
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Dan Wallace
Golden, CO · Member since 2016 · 145 posts · 61 votes
9y
@Jordan Lane the premise of a business owning their real estate can be complicated but it is way too simple to state it is always better for a business to lease. Most businesses that own their space have a structure where the operating company leases the space from the ownership entity. This way the operating company gets the lease write off and the ownership company can get any possible depreciation benefit.
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Jordan Lane
Bethesda, MD · Member since 2017 · 7 posts · 3 votes
9y
@Jeff Kehl Thank you for the information. I really like hearing about situations like this that end up being win-win due to creativity.
@Dan Wallace, A quick look makes it appear that this could be the case for a building I have been looking at. I will dive into it deeper. Would it be alright to message you with questions if I find out more of the details?
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Ken Jernigan
Wilmington, NC · Member since 2017 · 132 posts · 70 votes
9y
You might try the local Partnership for Children. They work with child cares throughout NC. Also contact the NC Dept of Health and Human Services. If you operate a child care, you're going to need a license. They assign licensing consultants who may know of child cares for sale.
If you don't have any child care experience, I'd urge you to get a job in one. The business is not for everyone. Also, scale is important. Not many make money until they get to 80-100 slots, running multiple shifts and summer programs. I've financed a bunch of child cares in the past and run right, they can be real money-makers.
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