On Going Enterprise and Real Estate Values

The two are separate and yet the same. Quite often the situation is a seesaw of values. For example, stand alone with no business the Real Estate as a property might be worth $2 Million but with an ongoing enterprise, the real estate could be worth more or less depending on the strength of the business expensed monthly rent. The business value then fluctuates up and down with the rent shortfall or overage. Typically, we will sell a business and its real estate at the fair market annual rent rate. This gives the seller options to negotiate a long term lease (if the tenant is strong) or sell the property with the sale. If a seller currently pays themselves, a higher rent than fair market, the overage then gets added back to the business profits and will show up in the business value, not the real estate value.  Bottom line is some sellers prefer the luxury of renting long term for cash flow in retirement and some don't want the headache.

To learn more about your ongoing enterprise and real estate situation,  I am holding a business owner only dinner, my treat, at The Hattery in Doylestown, Wednesday at 5:30pm. First 5 business owners to respond on the eventbrite link below. The dinner will run an hour, will include great food and knowledge for your business acumen library. M&A and Real Estate category.

My angle is simple. If I can reach you now and help add value to your situation, you will offer me a chance to win your business when you sell. I look forward to seeing you there. Mick

https://www.eventbrite.com/e/dinner-with-mick-feite-tickets-44932809242