Buying Anything for No Money Down: Podcast Ep 207

Nicola has a hankering to buy a business. I suggested she might consider doing that with no money down. She’s bought a property using those principles way back when she acquired her B&B The Acacia in Worthing in the early Noughties. And I sold my accountancy business on that basis in the late Nineties. We’ve both studied property lease options with Rick Otton so we are familiar with the principles but we describe them as a refresher for us and to give the listeners a lead in.

Nicola asks why would any seller consider it and what should she look for to help her evaluate what she’s thinking of buying?

The idea is to help the vendor achieve whatever he wants by selling his business without risking any capital of your own. You take on the good bits of his business, leave him with the problems he’s created, and use his business’s cashflow to buy him out.

Buying an asset using an option is much more normal than we realise. You might option a commercial property until you can get planning permission and hand it back if you do not. You can option a book until you can find the funding to turn it into a play or a film and let that option expire if you do not or renew it until you can. Meanwhile you have effectively “bagged” it and no-one else can do that. That’s what you are paying your option fee for, exclusivity rights. This is so normal in commerce and big business and it is reported in the papers when it happens, when massive high street businesses are acquired for £1, you just haven’t paid much attention to it (yet).  And it is incredibly normal in America and Australia as a way of buying a home too, known often as vendor finance or rent to own/buy. You also see it here in the UK but it is much newer and therefore regarded, as yet, with some suspicion.

You need to get into a conversation with the vendor and work out between the two of you what you both want and what you will pay for and on what terms. We give some examples in the show.

LISTEN HERE TO OWN IT! The Podcast #207: Buying a Business No Money Down

In other news, our words of the week are Change (her) and Appreciation (me).

Nicola’s enjoying quieter times now that the season is over in Stoupa but oddly experiencing an infestation of flies which neither of us can work out and it is interfering with her daily meditation routine! I’m excited to tell her about Christmas games, Christmas shopping (mostly for me), a lovely bunch of flowers which arrived unexpectedly last night from a grateful client graduating from SBBM after three happy years, and that I re-dedicated myself to low carbing only three days ago in a pre-Xmas weight loss drive and have lost six pounds already, about which I am really chuffed. My body really rewards me for this way of eating which I have sought to share with my low-carb clients too.

My fire is fuelled by a business client I love working with renewing for a year and paying faster than she said she might. And Nicola’s excited by an entrepreneurial seizure to improve a website she’s been involved with from the consumer end for some months now. Turns out it doesn’t deliver on its promises, so she’s wondering if she can improve upon it. I like the idea very much and we both agree it fits very nicely with her local Write Club.

Only Nicola has an update in Project Updates and it is about her ongoing daily videos and the results they are achieving, some good, some disappointing, some detective work required.

And she’s impressed by the winner of X Factor, Dalton Harris, Nicola’s frontrunner for quite a while. I’m impressed by the Back to 60 Campaign winning the right to a judicial review and, more, I am impressed by anyone who keeps up a campaign over many years to right social and political wrongs on behalf of others. How difficult must it be to raise funds and sustain your energy for such crusades, but how worthwhile especially in a week where a judge agrees with you against the mighty government.

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Your Biz Your Way

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