All Forum Posts by: Jared Haxton

@Brock Mogensen Thanks for the reply! So can those metrics be calculated with the numbers I listed above? I'm new enough to not be sure if I am missing a piece of the picture. Thanks!!

Hello! I need a quick hand converting my numbers into investor-ese. I was able to talk the sellers down to $1.4M from the $2M they started at and want to post the deal on the deals part of this site. So it is an industrial park with a lot of room for future development but as it stands, it currently takes in about $10,000 in gross rents every month and if someone were to pay cash for it and collect the rents (many unchanged since 2013!) themselves, about $8000 of it would be profit. 

So with a sales price of $1.4M and annual net rental income of $96,000, what would my headline numbers look like? What is the cap rate? IRR? Cash on cash return? I hear all these terms but am not solid on their meaning yet. Would love some feedback on which numbers are the most important when pitching it! Thank you!

@Bruce Woodruff I am setting up a call with them tomorrow to introduce the idea. :) Sent you a message to connect since we are in the same neck of the woods! Thanks!

@Bruce Woodruff

@Eliott Elias

I quoted you above but not sure if it tagged you. So tagging now. Thank you! 

@V.G Jason Thanks for sharing that example. I would love to hear more about the mechanics of the deal you arrived at with her! What did the arrangement look like? What residual benefits did you receive from it? Anything you would have changed about it or might do differently now that some time has passed? This sounds like it could be very similar to the situation at my doorstep here. Very interested in how it all went down. Thanks! 

@Obed Calixte They don't seem like the are on hard times and really need the money. But they have expressed that the idea of selling it and "riding off into the sunset" would be a pure bliss scenario for them. They are in their late 60's and 70's and ready to be done with running anything. So I am thinking about how to frame a scenario where they check out completely, I run everything but there is still profit in the business because we would own all the assets at the LTV and rate they are financed at. Any ideas on that? Thanks!

 At first they seemed closed off to financing any portion of it themselves. Now that more time has passed and I haven't had any bites from interested investors, they are more open to the idea of partial seller finance. Is there any type of loan that I could use to just buy a portion of a hard-to-value business like this where I could use a loan to just buy a portion of the business and have the seller finance the rest? Thanks! 

 Thanks for the reply Bruce. I have been mulling over some kind of setup like this. A lot of the profit in this business is the fact that they own everything and barely have a small mortgage on it. So almost all of the income is profit. Even if I financed half of the price they want at current rates, that is almost 100% of the profit so the numbers don't pan out at all. I would like to step in, run everything, take a portion of the income, let them keep the Lion's share of the profit and grow/stabilize the business. Then look at how to take over completely in the future. How would you break the ice on this topic when up until now, I have just been looking for investors and exploring how to buy it myself? Thanks! 

I want to hear any creative, out of the box, or even wacky ideas of how to offer value and take over someone's business who wants to retire.

Let's say you have a couple of family friends that want to sell their business and retire. You don't have the money to buy it and they won't be able to sell it in this current market for the price they want. It is a simple business that just rents out yard space and office space to different commercial tenants so you are willing and capable to take over operations and try to develop the business further. 

If your aim was to get experience, earn goodwill, make a little money, take all burden off of them (so they can mentally retire), and one day buy the whole business from them...

1. What would you propose to them to get your foot in the door?

2. How could any type of mutually beneficial setup be accomplished?

3. Any creative avenues to explore or things you have done/seen in the past that could be applicable in this situation? 

Not sure if this is enough info to go off of but trying to keep it short and not ramble on needlessly. If you want to see the specifics of this exact situation, it is at the link below. Thank you!!

https://www.biggerpockets.com/forums/32/topics/1070617-prepping-for-my-first-pitch-to-investors

Ok. I appreciate the input. Thanks!