I was wondering if you guys can help me in my frame of thinking at this point.
I figured that purchasing my own home would be a way to access some investment money plus build my LLC some credit.
By using someone else to get the loan and transfering title to my llc. Then after a year refinance into llc.
Right now I know I can get a home in my area with $35000 cash back plus my agent will split his commision with me. The person who gets the loan will recieve about $5000 at closing.
I will use some of the money to carry the cost of the home for as long as I can .
I plan on investing in a business franchise that gurantees its franchisees a monthly cash flow up to 200k a year depending on my investment.
At the same time I will invest part time in real estate and building credit for my llc for investing. Using my new business and house to as leverage to finance my investment business.
This was just an Idea to get me started with cash in my pocket and build credit for llc, and build a business that generates me a monthly cash flow.
What do you guys think is this creative or just desperate thinking and risky?
I want to be clear on the loan. Is someone else getting a mortgage, then trying to transfer title into an LLC and they don’t think it will trigger due on sale?
LLC will usually buy the property and get a note, insurance, etc. Are you saying the guy will transfer the deed and take a promissory note from you to guarantee payment?
I would do the 2 things separate and distinct. I would buy real estate and I would invest in the franchise. If you don’t have enough money to invest in the franchise I would wait until I do. I would buy the real estate because it makes me money. In real estate I use the mailbox test. If next month there is a check in my mailbox (net cash to me), I will do the deal. If not I don’t do that deal.
By the way, what franchise guarantees you a profit? I say that because if a company has a model that is that surefire, they have no need to franchise they can just keep opening branches. An example is Starbucks. Each location guarantees a profit that is why they don’t franchise. If someone guarantees you a profit then make them put the profit funds in an escrow account beforehand.
What does that even mean? First of all, you can have a huge flow of cash but no profit. Is it per month or per year? Note that the ceiling is $200k. What is the floor?
You aren’t giving enough detail on this franchise but it sounds like BS. Why would a franchisor want to mess around with a bunch of individual franchisees who are investing a few thousand if they have a business model which is assured of generating large profits?
Answer: They won’t. If it’s the real deal they will look for a few sophisticated investors with deep pockets and business experience. Or they will find a way to get the cash and do it themselves. There is plenty of money out there.
The details are a jumble and it seems as if you are about to get taken. Stick to the basics, per the forum here and articles. If you aren’t a savvy investor, people can smell it and they’ll throw unrealistic numbers at you all day.
Basically it has been done were someone gets the loan then you pay them $5k to10k arrange with the deed to transfer with a promise to pay. I’m not sure how its done cause I have not done it yet. I do have a brother who just bought a house like that.
The franchise thing is just for , rather than get a job I can invest the cash back into the franchise for monthly cash flow.
While I work on my real estate business.
This is a office cleaning franchise whitch work will be done after 5pm.
I have been looking into the franchise since 2001. They are ranked one of the top franchises in lowest investment, fastest growing, etc.
For example they have a plan were you invest $21,000 cash payment for a total of $85,000 per gross accounts. Of course you have other expenses like they charge 8% of total monthly billing for royalty fees plus 5% managenment fee.
Plus they allow you to get your own clients.
I can’t explain everything but that what I was looking at.
The reason for this is that I don’t work at the moment so I figure if I can purchase a house to live in and invest in a franchise to cover the cost of living in my house. Plus some of the cash back will give me up to a year to work on the franchise as well as my investing.
I get the impression that you are looking at this office cleaning business as a passive source of income. I am sure that the franchisor expects you to manage it. It sounds like you are buying a job as a supervisor of cleaners. So now you are hiring, training, supervising, taking care of payroll, prospecting for new customers, keeping current customers happy, etc. This could be an easy and profitable business if you can hire the right people. By here is the bad news; you can’t hire the right people.
With many franchises you are buying two things: Training to learn how to conduct a type of business and the right to use a name/logo. Don’t you think you could get someone with an office cleaning business in another area to answer some questions and even serve as a mentor? How valuable is the name of this franchise? I have owned one or more businesses with offices since 1988, and I can tell you that I can’t name one office cleaning franchise. I can name restaurant franchises, real estate franchises, automotive repair franchises, computer repair franchises and many others. Office cleaning franchise? Doesn’t ring a bell. So how much is that name worth? 5% plus 8%? No way.
I have owned franchises in the past. My companies have grown faster when I was doing my own thing. I have taken a look at franchises in another type of business which I will most likely enter within the next six months. They cost a LOT of money and I can’t see the value.
In my opinion, most small business franchises are expensive security blankets for folks who are afraid of making mistakes and are unwilling to do the research necessary to develop a sound business plan and marketing plan. And what ultimately makes them so expensive is that they don’t deliver.
Decide what you want to do. Is cleaning offices your thing? I doubt it. Once you have decided what to do, research, research, research. And do some serious research on marketing in general. It took me years to realize that the type and quality of marketing is as important as the type of business. You can have fantastic products or services, but if marketing doesn’t bring customers then your business doesn’t matter.
When you have done this research you can develop a plan. Then use that “franchise money” to hit the market hard with marketing. That’s what I would do.