Curious if anyone here has grown a retreat center network/franchise for spaces that accommodate around 30 people on 10+ acres. I built my first one in Mount Shasta, California and am looking at growing it to 8 sites all over the world. The next one will be on Big Island, Hawaii (south Kona). The place has been identified and owner is finally ready to sell. Curious how you would think about financing the next few locations. First thought: Cash out refinance of first place and then use to purchase the second one? orDSCR?
Our first retreat center is profitable so it feels ready for scale.
@Belinda Liu, does your center provide on-site staff/support? If the center operates more like an active business, you may be able to use SBA loan programs as a potential lending source. 504 for real estate and 7(a) for operating company.
First step would be to find a local bank that's an SBA lender and have a quick convo to see if it's a possibility under the program guidelines.
This doesn't solve any issues with up-front capital required, but perhaps you could also get a (commercial) LoC from the SBA lender based on the current center's performance.
Thanks for this! I went through the process last year and we didn't qualify for enough capital for the scale that we are exploring. I'll look at it again to see, esp after this years 2022 taxes that show we made even more profit. :)
Do you have a relationship with a commercial bank? I'd be speaking with them, especially if you're looking to scale in markets where they have a footprint.