Now that the economy has improved we are seeing our clients interested in buying buildings again. I recently heard about a woman who wanted to open a coffee shop so she went to the bank first to get a loan to buy the building. Just because a building is for sale on corner AB doesn’t mean it is a good place to open a coffee shop. Why not try and lease the space with an option to purchase to see if the business will be a successful and location really works. Will she have enough capital after she drops a good amount of cash on the building? If you need your capital for equipment or inventory than perhaps you should think again. Unless you are Doctor I’ve yet to see zero down payments.
AT THE SAME TIME I WAS WORKING WITH a man who owned a framing shop and art gallery. He was so crammed in there so tight there wasn’t enough space to show off the art. He had been in business for many years. The business was mature and ready to buy a building. We looked at leasing verses buying a building. He had been to the bank so we knew how much of a mortgage he could get. We found several great buildings that would work with either scenario. I ran financial calculations for him and we found it was less expensive for him to buy a building. It took some time but we found the perfect building for him. It was about 50% bigger than he needed but it came with a tenant. He was also able to lease out his extra parking spaces to other companies near him that didn’t have enough parking. Overall the purchase was the way to go. We had also found him a location with a higher traffic count and higher income demographics. When I recently visited him at the shop he was so busy with walk in traffic he was grinning from ear to ear. If your business would like to buy a building give us a call we are happy to help you find the perfect space for your business.