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Monday, May 20, 2024

Business & Land


The Founder Real Estate Business Scene
THESSALONIAN31N

A long time ago I heard something about small business - you really want to own the land where your business operates. Whether you have a mortgage or a lease, you are going to be shelling out roughly the same amount of money each month. The only problem could be is if you are in an area that is going down the tubes, like Detroit is (was?), but you probably don't want to establish a business in that area anyway. In any case, once you have been in business for 20 years, if you bought the land, you will now have something of substantial value even if the business goes bust. If you are leasing the land, you might have a business that will pay your salary and the rent, but will not have as large a value as it would if you bought the land.

View From the Porch got me started:


Meanwhile, here in Hillsboro, McDonalds closed one location which was in a very congested location and opened a new one a mile down the road near the Sunset Esplanade.

P. S. Something similar happened to Hostess - post 1 & post 2.

3 comments:

  1. Private equity has killed free enterprise. Buy a company, borrow a fortune against it and leave the company floundering in debt plus huge fees to the equity. Worse they are buying hospitals and medical urgent care centers.

    When the government appointed reorganizers at GM offered the equity a generous profit to buy Delco back they said no, moved the whole operation off shore and laid off 25,000 Americans.

    Even worse a lot of these ill gotten gains are going into Political PACs and lobbying against you.

    xoxoxoBruce

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  2. Like what happened to Sears, not realizing the real estate value was based on its retail draw.

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  3. It’s called asset stripping. Toys r us, sears just to name a couple. Romney was good at it while at Bain capital.

    Leverage the purchase, saddle the business with the borrowed purchase debt, charge the business a management fee, close the business and sell the assets, Voila.

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