Monday, August 31, 2015

Orchestrating the purchase of a Bar - Real Estate and Assets

We want to buy a bar with assets and Real Estate,  however as the bar owner,  we do not want to own the realestate.  So it looks like we will need to orchestrate a couple of transactions,  which will require a couple of transactions.

  1. Purchase the all asset from the current seller,  the realestate,  and other bar assets.  Into a Bar Operator LLC company.
  2. Have a Real Estate Holding LLC purchase the Building from Bar Operator LLC and Lease the Property back to the Bar Operator LLC.
This method will allow us to put together a lease on the property which should show some sort of a profit.  (i need to investigate cap rate or other real estate investor terms in order to find out what reasonable rates are)

Additionally,  the liability for the bar owner will be restricted to the insides of the bar.   A proper lease agreement must be maintained to property isolate them and proper payments must be done.

Unfortunately the method above does not allow us to easily get a loan for the Real Estate.  In fact the method above disqualifies us for a SBA loan because in transaction #2 the SBA can not give loans for purchases from the same owner,  (they spend alot of time talking about who is the same owner).

So perhaps the other way to do this would be to make two separate purchase agreements one with the real estate into the  Real Estate Holding LLC and purchase the Liquor License and and other bar operator 'blue sky',  etc into the Bar Operator LLC.

Then only get the loan for the Real Estate Holding company and pay cash (or get a separate loan) for the Bar Portion.   This method would require that we likely invest more money of our own cash.




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