This is the moment in the cycle when many real estate business owners may consider a new chapter for themselves. That could include selling your company. What are the steps involved in doing that?
Buying & Selling Real Estate Businesses
Structured well a real estate business itself can be worth even more than the sum of its assets. In this phase of the cycle some operators are going to be actively looking for other businesses to acquire. Others may be considering moving on, and selling or merging with another company can be a great way to exit. So, how do you get started in selling your company, or at least seeing what those options look like?
Learn How To Value Your Real Estate Business
Understanding how much your business may be worth is a good first step in exploring this process.
There are several types of valuation methods for business. Which is used will often demand mostly on who your buyer is. Private equity funds focus mostly on the traditional business numbers and your income. Strategic buyers may be more interested in your technology, talented team, brand name and customer base. It could be worth a lot more to them. Others may be more interested in acquiring your real estate assets, and place most of their valuation on those.
Optimize Your Value
Having an idea of the most likely type of buyer of your business you can then begin optimizing to get the most out of a sale. This includes cleaning up the accounting and legal paperwork, restructuring finances and getting rid of bad debt, etc.
Create Your Materials
Be ready to showcase how great your business is, and its potential value in the hands of a new buyer with careful creation of a pitch book, putting up a virtual data room and preparing marketing and PR to position your company for the best bids.
Get Help
What level of help makes the most sense will depend a lot on the value range of your business. At the low end you may be fine with your attorney or a business broker. At the higher end you may benefit a lot from a professional M&A advisor or investment banker.
Learn The Paperwork
Just as knowing the ins and outs of your real estate contracts and paperwork can make a huge difference in the deals you do every day, so can it when it comes to all of the documents for selling your business. Know the purchase agreement, and the most important clauses, gotchas and calculations that can impact you the most.
Determine What Is Most Important
What are your top priorities in this sale? Is it the speed of closing? Price or net proceeds, or the freedom you’ll have afterwards?
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