Buying a Bar (well at least the building)
I am what i would consider to to the investment world of real estate. I own a few small properties (condos) that I rent. Now I have been in talks with a good friend of mine who is attempting to buy a bar in a college town. He used to manage the bar and knows the business after being involved for 15 years.
SO the bar is unique and potentially a great business opportunity. he is in the process of raising capital to buy the operation and has asked me if i wanted to buy the building. The building is quite expensive at around 800,000 and basically would take all of my capital to purchase. I know as a general rule its not good to do business with a friend but it is a great opportunity. I am having two issues...
What is an appropriate return that i should be asking for as with my residential property i have always tried to find approx. 6-8%.
My other issue is his long term goal is to purchase the property from me as he would need it to be attached to the business which i understand and agree with but I have always been a long term investor with thoughts that i buy to hold for my retirement in thirty years... So how do i price a buyout in lets say ten years? As this ties up my capital is this a smart move to get involved.
Again this some what new to me so i apologize if i seem ignorant or have not given proper detail...any thoughts advice or criticism will gladly be accepted.