I see the same problem constantly with business owners who purchased real estate between 2003-2008.  They saw their business on a growth curve and figured they would reinvest some of their profits into a building purchase or finance construction of a larger facility to expand their production and accomodate for growing demand.  They paid their mortgage for a few years and thought they were doing a good thing until the recession came.  Revenues dropped, sales forecasts did not meet expectations and suddenly they are stuck paying a mortgage on a facility much larger than what they actually need or use.  The mortgage is sucking the cash flow right out of the business and rather than this purchase being a sound investment, it becomes the business owner’s worst nightmare.  Sound familiar?

Well it does not have to be this way.  You can get out from under that underwater real estate and stay in business.  It’s called the SALE-LEASEBACK and it’s done all over the business world.

I constantly tell clients to get rid of their underwater real estate and lease it instead.  Chances are the market rental rates in your area are much lower than your note payment on the building.  Why struggle every month to cover that note payment on a depreciating asset that you are over paying for?  You are fighting for survival, you need cash flow in your business to move forward and prosper eventually, your real estate is just a building, it is not your saving grace.  You can even stay in the same facility you once owned, you won’t have to move.  Really.

The American small business man has a huge obsession with ownership.  This does not make a lot of sense.  I speak with clients who are barely hanging on to their businesses, not taking a paycheck, racking up vendor debt and getting their supplies shut off.  When I explore the possibility of selling their real estate building and leasing it, they are always resistent.  How could you be?  You are paying a mortgage far above the current market rent rates, too much of your cash flow is being allocated to stay in a facility which is either too big, too fancy and definitely too expensive.  Moving into a lease could potentially help you out tremendously and allow you to reinvest in areas of your business that will actually make a difference and which have been neglected.  I can’t stress this enough.

We can help you strip the debt off your business by getting rid of this unproductive asset and improving your cash flow.