The story about a home sale with what is truly a home-based business is interesting for agents, homeowners, and investors around the country. As the below linked story details, a homeowner in Utah began renting out an oversized swimming pool and turned it into an efficient and profitable business. Now that it is time to sell them home, it is listed for hundreds of thousands of dollars more than simply the appraised value of the house and property.
Part of the story is that a buyer does not get the existing business name and goodwill that goes along with it. A buyer evaluating the business knows that although the elements are in place to recreate the success story immediately, there will be questions until or unless the new owner can demonstrate the same level of customer service and reliability previously in place.
Seeking a buyer willing to spend for the business potential clearly narrows down the number of potential buyers. There is also the matter of challenges with funding for the eventual buyer. Or are there?
What we have is clearly a situation which needs to be presented as a solution instead of a “property” or a “home”. Residential lenders won’t be willing or able to lend the additional funds to include a business. Some business or commercial lenders won’t be able to do the deal because it is on residential property. A new owner may (or may not) face zoning or municipal challenges from starting a new business venture at a residential address. Technically, this is different from a short-term rental of the house, especially with the additional price for purchase.
My thinking is that private money or an investor partner are solutions to make the deal happen. A situation such as this one is why you need to always have your research, sources, and network of established contacts already in place. If you have to start finding them when you uncover a good opportunity, you bring uncertainty and delay into the equation.
Those factors alone can keep a strong possibility from becoming a reality. This is not to say that you will easily or always be able to take advantage of situations like the one in the article. There is a lot to be said for being prepared to move forward quickly and effectively when the formula is in place. Finding great deals is only one part of the process.
At FIRST IN, we are here to help you establish your process and show you how we could be part of it if needed. We may bring you thousands of reasons to hire us to make you “first in” for your next big deal!
(The article referred to above:)
https://www.realtor.com/news/trends/salt-lake-city-woman-generates-income-off-pool-for-sale/
