Buying vs Leasing Commercial Real Estate for Your Business

by Anthony Gilbert

There are few absolutes when it comes to making business decisions because each company has their own energy, mission, and goals that influence every move an owner makes. This can be frustrating for people who could use solid advice at the beginning of their journey, but it's also the concept that separates the successes from the failures. Buying may seem like a smart move when it comes to real estate, but this is not always the case. See how to tease out what's important from each decision and what can be put on hold.

Why Buy an Office Space?

Commercial mortgages mean that an owner will have an easier time planning the budget because their mortgage rates will be predictable, depending on the type of loan obtained. They won't have to worry the market will turn and their landlord will double the price. In addition, owners can use a positive swing in the market for their own gain by renting out additional space in the building to other businesses at the higher rates. Both the direct and indirect expenses (e.g., property taxes, mortgage interest) can be deducted for lower taxes, and owners can also use any appreciation of the property to help fund a lucrative retirement when they eventually sell the property. 

Why Lease an Office Space?

Buying is extremely hard on the budget, whereas leasing will be a more reasonable option (at least in the short-term.) Most businesses want to convey a certain message to their clients and their employees, and they may not be able to afford a very desirable property if they choose to buy. In fact, for those who want to work in neighborhoods that attract high-end clients, it's usually the only option owners have if they don't want to sink the company into unsustainable debt. Owners can then use the capital they may have used to buy a property to invest in the longevity of the business. 

Disadvantages of Buying Vs. Leasing

Buying is a lot more work then leasing — especially if owners are renting out their property to other tenants. Not only are owners responsible for the costs of upkeep, but they'll also have to settle tenant disputes. These types of time-demands mean less time to focus on the business. It also tends to destroy any kind of financial cushion an owner may need to handle any unexpected expenses that pop up (which are common in a new business.) If an owner chooses to lease on the other hand, they'll have zero equity in the space. They're subject to annual rent increases that they may not be able to pay for. 

Tips for Deciding

Owners should have a good idea of what they plan to do with their business before they decide one way or the other. While not all events are foreseeable, owners should have contingency plans on how they'll handle either a dramatic upswing or downturn in their finances. An accountant and a financial planner can help, but only the owner can determine the scope of their business (and thus, the scope of their real estate needs. For example, a small restaurant may have no choice but to lease in a popular area of a town, but a small tech company could potentially build up their business in a fixer-upper office on the outskirts of town that costs pennies to buy. 

While buying may seem like the best plan at first glance to some, the fixed-rates the owner guarantees upon move-in may not be as economical as they first appear to be. The real crux of the decision needs to be based on the owner's industry and long-term goals. When a company expands too far too fast, real estate is one of the biggest components as to why a business succeeds or fails. It's why owners need to make plans for unexpected successes or failures before they decide whether to lease or buy. 

BEST PLACES TO LIVE IN FLORIDA

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MOVING TO FLORIDA ? HERE ARE 10 GREAT CITIES IN THE SUNSHINE STATE

Viewed by many as a retirement destination, Florida has recently become a hot state for young families who are taking advantage of great real estate prices and a growing economy. Here's a look at the best cities in Florida.

• MIAMI BEACH

This city of nearly 90,000 residents features the largest collection of art deco architecture in the world along with great beaches, top restaurants and dynamic nightspots. While the city has a reputation as a party place, there are many family-friendly things to do in Miami Beach. Nearly 20 distinct neighborhoods grace the city’s landscape, making Miami Beach a magnet for diverse groups of residents as well as tourists. Miami Beach ranked as one of the Top 100 Best Places to Live in the world. 

• TAMPA

Along Florida’s west coast near the Gulf Mexico, Tampa continues to grow in population thanks to good schools, excellent health care and several Fortune 1000 companies doing business there. Downtown Tampa is undergoing vibrant development with young professionals moving in, and entertainment options include professional sports, nightspots and great restaurants, creating lots of things to do in the city.

• ORLANDO

Situated in the heart of central Florida is Orlando, nicknamed “The Theme Park Capital of the World” and drawing 55 million annual visitors. For residents, the city has 115 neighborhoods, great schools and excellent health care, along with numerous high-tech companies. About 25 colleges and universities operate in Orlando.

• CORAL GABLES

One of the wealthiest cities in America is Coral Gables, situated just southwest of downtown Miami and renown as a shopping destination with many international retailers. Great weather and a solid array of natural attractions provide many things to do in Coral Gables. Coral Gables houses top employers like the University of Miami and Baptist Hospital of Miami.

• ST. PETERSBURG

With 360 days of annual sunshine, St. Petersburg is popular with both residents and tourists. Its low cost of living and quality health care make the city attractive for retirees, and St. Petersburg has also moved in a more youthful direction with a vibrant downtown and multiple nightlife options.

• NAPLES

If you have big money, Naples might be perfect for you, with the second highest proportion of millionaires per capita in America. An excellent school system and great health care are in place, and the city is popular with tourists due to its closeness to the Everglades and Ten Thousand Islands.

• PORT ST. LUCIE

On the east coast of Florida is Port St. Lucie, a city of 175,000 residents and known for companies that specialize in research and innovation. St. Lucie County Public Schools are ranked among the best in Florida, and sports entertainment options include a PGA Village golf complex and the New York Mets spring training complex.

• THE VILLAGES

As a master-planned retirement community in central Florida, at least 80 percent of homes within The Villages must have at least one person 55 years of age or older. This growing city has a slogan “Free Golf for Life,” with several golf venues on site along with recreation centers and a Lifelong Learning Center.

• JACKSONVILLE

With more than 500 neighborhoods including a thriving downtown, Jacksonville operates the largest urban park system in America and oversees a robust arts scene. Top industries include tourism, health care, banking and logistics, and for water enthusiasts, the city is located on the St. Johns River and Atlantic Ocean.

• TALLAHASSEE

The state capital is a big college town with Florida State University, Florida A&M University and Tallahassee Community College, and also a major center for trade, agriculture, and research. The Tallahassee skyline features several buildings taller than 15 stories, and residents enjoy great health care, sports opportunities and a quality transportation system.

10 REASONS TO MOVE TO FLORIDA !

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10 reasons why you should come to live in the Sunshine State : 

• 1. THE WEATHER

Florida is one of the lucky states that enjoys beautiful weather all year long. We get to wear shorts and t-shirts 365 days a year. Our weather is so lovely that many Northerners have winter homes in Florida to escape being holed up at home for an entire season. Though these snowbirds can attest, after buying a winter home here, you may end up staying all year!

• 2. THE BEACHES

Beach lovers will find Florida to be a true paradise. Some of the most beautiful beaches in the world can be found in Florida. Each coast has its own stunning landscapes, all of them worth a visit. Whether you are hoping to relax in the sand, participate in water sports or enjoy a tropical drink as the sun sets, Florida has it.

• 3. AUTHENTIC CUBAN FOOD

Every sandwich shop from Tampa to Key West claims to have the best Cuban sandwich in the state, and as you wander southern Florida, you’d be wise to stop in as many of these establishments as your appetite allows. Be sure to order a deviled crab on the side and wash it all down with a cafe con leche.

• 4. PROFESSIONAL SPORTS

Sports fans with think they’ve hit the jackpot with so many professional franchises in one state. Spend football season tailgating with the Tampa Bay Buccaneers, Miami Dolphins, and Jacksonville Jaguars. Sit courtside as the Miami Heat and Orlando Magic battle it out on the basketball court. Or catch a fly ball at a Tampa Bay Rays regular season game, or a Yankees spring training game.

• 5. FRESH SEAFOOD

All along the coastline you’ll find some of the freshest seafood the country has to offer, and the best part is, you don’t need a reservation to sink your teeth into the an expertly prepared blackened grouper sandwich. As a matter of fact, Florida’s best kept foodie secret is the seafood dives tucked away in the many off the beaten path sleepy beach towns.

• 6. DAY TRIPS

With so many unique destinations, Florida is the perfect state for day tripping. Drive a few hours and find yourself in the United State’s largest subtropical wilderness, The Everglades; checking out the work of Frank Lloyd Wright on the campus of Florida Southern College; or pondering life as you wander Bok Tower Gardens, which is a bird sanctuary, historical landmark, and gardens all rolled into one.

• 7. THEME PARKS

Whether it’s coasters, characters, or water slides you crave, Florida is bursting with more theme parks than you can fit into a week. The Orlando area alone has enough to keep you busy between Disney, Universal, Legoland, and Wet N Wild, but if that isn’t enough to fill all your thrills, head to Tampa, which is home to Busch Gardens and Adventure Island.

• 8. THE WILDLIFE

The trees are sumptuous and protected, the Everglades offer an exceptional playground for lovers of hiking and photo safari; In Miami for example the Coconut Grove neighborhood, offers an incredible density of tropical trees and plants. All of Florida is populated by many wild animals: a couple of peacocks cross the road and snub you by blocking traffic, an alligator that tans the scales as you cycle family cycling along a small path in the Everglades, A racoon that nibbles your picnic remains ... You will live with the beasts in Florida!

• 9. THE FAMOUS ORANGES

Since orange juice is the state beverage, it’s only fitting that the glorious orange is the state fruit. The fruit is a huge part of Florida’s economy, as the state provides the country with most of its oranges. In 2012, Florida produced 70 percent of oranges in the U.S. And that’s important, since our country’s per-person consumption of oranges is higher than that of any other fruit.

• 10. THE HIDDEN SPRINGS

It’s easy to understand why Ponce de Leon thought Florida's natural springs were the "Fountain of Youth". They are simply breathtaking. There are close to 900 freshwater springs in Florida, ranging from small ones emitting a little more than a trickle of water, to Silver Springs, the largest spring in Florida, which emits over 550 million gallons of water per day. Experiencing one of these springs is like entering a new world — you can swim in underground caves! Even better, the water temperature at the springs averages 70-75 degrees year-round.

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Sources : http://wcicommunities.com/about-wci/blog/2015/12/23/10-reasons-why-people-move-to-florida/ http://www.huffingtonpost.com/2014/03/27/florida-best-state_n_4981731.html http://livability.com/fl/real-estate/8-reasons-to-move-to-florida

E-2 Visa: The less expensive option to start a business in the U.S

A noncitizen of the U.S. can come to this country and start a business under an E-2 treaty investor visa for an investment as low as about $50,000. And that business owner, as well as members of his or her family, can live here legally as long as the business is a going concern.

First of all, the visa applicant must make a "substantial" investment in the planned business, according to the U.S. State Department, that is "sufficient to ensure the successful operation of the enterprise."

Denmark native Mia Pedersen went through the process in order to start up an ice cream store, Paradis, in the Montrose Shopping Park in 2009.

"You have to have your business almost 80% ready to go before you can apply," said Pedersen, who with her husband and brother spent several hundred thousand dollars to open Paradis.

And even a small business, such as a single ice cream shop, has to prove it will provide some benefit to the local economy by creating jobs or by other means.

"The U.S. government is not interested in what they call marginal investments — businesses that are too small to make any meaningful contribution to the American economy," said Bobby C. Chung, an El Monte-based immigration attorney who specializes in E-2 visa law.

An E-2 visa can be renewed every two to five years, but every time it comes up for renewal the business owner may be called upon to show that his or her enterprise is providing economic benefits.

The E-2 is not the only visa that allows a person to come to the U.S. to start a business, but it is less expensive than others. The amount of investment depends on the type of business that's being started, and although there's no set rule, immigration attorneys said $100,000 is often enough and $50,000 could be sufficient.

"E-2 is really for small businesses," said attorney Louis Piscopo, who spoke on the topic at a recent meeting of Orange County business brokers.

By comparison, the EB-5 immigrant investor visa requires a minimum outlay of $500,000 and has far more rigid criteria regarding employee counts. But it provides a pathway to a green card and permanent residency.

The E-2, of which 25,500 were issued by the government in fiscal 2010, is intended for what the State Department calls "temporary visitors." And children of E-2 visa holders can't stay in the country once they turn 21 unless they qualify for a different type of visa.

In the last two years, bills have been proposed to allow E-2 holders to eventually earn permanent residency. But it's doubtful proponents of the new rules will be successful anytime soon. The efforts have been caught up in "the larger politics of immigration," said Bob Litan, vice president at the nonprofit Ewing Marion Kauffman Foundation, an entrepreneurship research and advocacy group in Kansas City, Mo.

In the meantime, Pedersen is thankful for the opportunity the current program has given her family. On Saturday she and her family held a grand opening for the second Paradis shop, on Vermont Avenue in Los Angeles in a former Pinkberry frozen-yogurt store.

With the opening of the new shop, the company's employee count went from three to five. In the future, Pedersen hopes to sell franchises of the operation.

"If we can make it here, we can really make it," she said. "It's a big country."

smallbiz@latimes.com

INTERNATIONAL BUYERS

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Why use a business broker?

1-Always Good To Have A Buffer Between You and The Seller:

They can be a conduit to help deliver bad news to the seller. There may be instances where you have to retract or modify an offer and certainly times where you'll need to adopt an aggressive negotiating position. Since you'll most likely need the seller to train you after the purchase, it's not a good idea to aggravate them too severely. As such, let the business broker deliver the bad news.

Venir vivre en Floride (French Article)

Pour s'expatrie aux USA, mis à part situation spéciale comme les athlètes ou célébrités, l'achat ou la création d'une entreprise est nécessaire a la demande de VISA de résident.

Ce visa est un visa E2 d'investisseur et la pluparts des avocats d'immigration demande un investissement minimum de $150,000 US pour déposer le dossier auprès des services d'immigrations US.

Le Business Broker de Miami spécialise dans l'installation de familles Française à Miami et dans le reste de la Floride. Non pas en tant que cabinet d'avocat, mais en tant que courtier d'entreprise et consultant d'affaire.

Le Business Broker de Miami peut non seulement vous trouver le meilleur commerce ou entreprise pour votre budget mais aussi vous assister avec toutes votre installation en Floride, comme les ouvertures de sociétés, de comptes bancaire, achat de véhicule, etc. 

Contactez nos bureaux pour plus d’informations.

Deliver a Marketing Plan

Selling your business is all about marketing. Properly positioning the sale of your company to attract and motivate as many buyers as possible should be your goal. Ensure your business broker has a marketing plan including details of advertising strategies to attract a wide range of potential buyer leads.

Practice Due Diligence

Just as a prospective buyer of your company will exercise due diligence so should you. Examine your broker's background, experience, and credentials. Are there any lawsuits or complaints against them? Check the Better Business Bureau. Investigate their references. Have they handled sales of your type of business before?

BUYER'S WAITING LIST

As of 06/10/2014, they are 1,567 buyers in our system, looking for a business opportunity throughout the State of Florida!

Finding a Business Broker

Get Referrals: One best practice is to always get a referral from a trusted source. Ask your accountant, lawyer, peers, and industry association for names of good business brokers.

WOULD YOU LIKE TO BECOME A BUSINESS BROKER?

If you have a real estate license and would like to learn a new career, please contact our office. Selling businesses can be more interesting and rewarding then selling residential real estate. Contact us for more information!
Office: 305-537-3724 Cell: 407-928-0725 Info@BusinessBrokerofMiami.com

Find a Specialist

A business broker who spends all their time selling businesses will add more value to your sales transaction than a part-time agent. A full-time business broker can not only bring in a network of contacts but has an understanding of the principles of business valuation. Find someone who is dedicated to the profession. If your company value may be worth millions, consider merger and acquisition intermediaries.

Want to sell your business?

What is a Business Broker?

A business broker is similar to a real estate agent. Business brokers provide the match making service of bringing together buyers and sellers of businesses. The right business broker can help your small business to achieve the maximum dollar value.