Yeah, didn't really have a clue how the commercial world works when it comes to being a tenant in the commercial world. Never had to deal with that before.
Acquiring Minds
Buying a $1.6m Business for the Inventory Value
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I've been a residential tenant, but much more difficult to be a commercial tenant. They ask for your personal finances. They want like a financial statement put together.
They really kind of want to see what your net worth is. And as a W2 employee navigating this world, you know, my net worth was not a lot and you know, providing my measly little financial statement over to a, you know, commercial landlord who's, you know, looking at me as paying rent of $25,000 a month and you know, paying a deposit, whatever that might be. It was, it was very, it felt very…
It, it definitely felt belittling. It definitely brought more of those fears of, you know, I'm so not qualified for this, you know, putting your personal financial statement out there and then the landlord basically saying like, this person has nothing, like, what are they doing?
So it took a lot of conversations with the broker, a lot of conversations with the seller, with myself to convince this landlord, you know, that it's, it's not necessarily my personal financials trying to pay for your warehouse space. It's the business and the business is sellable and that's the asset that, you know, is paying your going to continue to pay your rent here.
And to be clear, this was the landlord of the existing warehouse under the, under the seller. Under the, under the previous owner? Yep, that's correct.
Okay. And so did you eventually convince them?
We did. Push came to shove where, you know, we were, the loan was wrapping up and the SBA required some kind of assumption of lease of, you know, to show that it was approved for me to move into that lease. So the landlord said that he needed the prior owners to basically guarantee me and be signers on the lease as well. And fortunately, you know, they were able to do that because the lease was…
So I didn't. Even if it wasn't ending come May 2025, he was still requiring the prior owners to guarantee me, personally guarantee me for another five years. And we looked at each other and just said no, we don't, we don't really want those ties. We want to sell the business and move on.
And so then the talks, you know, of, we got the least assumption through of at least me being there until 2025 and us agreeing that, you know, they would personally guarantee me until the end of that May 2025 expiration. But I had to find a new commercial broker to help me find a new warehouse space because the terms past that were like requiring $100,000 deposit. I was deemed high risk to him.
He just wasn't comfortable with me being there. So I found a new warehouse space, easy peasy, $30,000 deposit, moved right in, no questions asked. Yeah. Why do you think that the other landlord was, was didn't have the same hang ups as the previous landlord?
Yeah, I'm not quite sure. I mean this one was very owner. Owner ran so more personal like it was, you know, he owned these buildings, he managed it himself, his family.
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