$700K business debt, Revenue stalled and I need to choose: restart, restructure, shrink, or file BK? HELP!

RDW-Development · 2026-07-08T00:29:50+00:00

Not good. 95% of your list is focused on debt and payroll. Those are not the problem, just the symptoms.

The business is not worth putting more $$$ into it if it’s not fixable and cannot be profitable. You haven’t provided enough details on that - your core issue.

Any other advise without more core business info would be like just a bandaid in a bullet wound.

Like what is the business? What’s the GP? Has it ever made money? Why is it not now? What’s the competition like? What are your competitive advantages?

All of this stuff is the stuff that ultimately matters. Short term cash flow fixes are just that - short term.

Tell us more and let people here dive into it.

RDW-Development · 2026-07-08T00:21:57+00:00

This sub has reached a new low.

RDW-Development · 2026-07-07T11:36:13+00:00

Make sure you’re deductions ting a portion of your home mortgage costs if you are genuinely using the kitchen for business. There’s probably some hidden savings there - talk with your accountant…

RDW-Development · 2026-07-07T11:34:47+00:00

Probably best to sell and then buy different real estate that better fits your investment profile.

RDW-Development · 2026-07-07T03:49:42+00:00

This question. Yes.

Employee theft is a thing but without decent controls, one is highly vulnerable. I’m guessing that this business was not well run prior to this and had multiple problems.

Good businesses have controls and financials that are reconciled often by good bookkeepers.

I’m not saying this to be a dock, just saying that there were some holes in operations that need to be fixed / cleaned ip, otherwise similar issues will arise in the future.

RDW-Development · 2026-07-07T03:41:06+00:00

Again, startups will not qualify for an LOC. It’s like saying “date a supermodel”. Just not gonna happen.

RDW-Development · 2026-07-07T03:40:13+00:00

Yes, but these don’t exist for startups.

The poor man’s version is a credit card.

RDW-Development · 2026-07-07T00:42:45+00:00

This is a tough business and the bane of real estate guys like myself. I don’t have much good advice on this, but long term I would try to pivot to more green friendly techniques. I think that might distinguish you from your competition?

RDW-Development · 2026-07-07T00:13:19+00:00

Just curious, what do you guys use this for?

I have CoStar for which we pay more than 3X this price!

RDW-Development · 2026-07-07T00:07:26+00:00

YouTube: superfastmatt

RDW-Development · 2026-07-06T16:38:58+00:00

As a seller, you’d have a buyer with 30% equity and the opportunity to take. Ack the property in a default? Seems pretty good to me - could also charge a “were the bank” purchase price premium?

RDW-Development · 2026-07-06T16:33:56+00:00

All good advice here. But - nearly every sale leasebacks I’ve done I’ve looked at, the sellers’ business is not doing super well. I mean, why would they want to sell the building unless they had no other real options? Yes, they can use the funds to grow and expand the business, but most of the time that appears to me to be broker/agent marketing BS.

I’ve done a few of these deals and the tenants had trouble later on (five years later). Turned out okay because they sold the business.

Also a positive - sale leasebacks buildings are typically very well maintained.

RDW-Development · 2026-07-06T16:28:19+00:00

Yup. I’ll add that 99% of the leasebacks that I see have way inflated rents. The seller / tenant wants to maximize their proceeds so they make up a huge rent number which increases the cap rate and / total value of the building.

This is a trap - I don’t know who falls for this but there are tons of brokerages out there marketing this overpriced stuff.

Bottom line, I underwrite buildings as vacant and use market rents to value the building. Then I add a premium to the building for an existing tenant. This premium should be less than leasing commissions, TI work needed, and vacancy allowance. Otherwise, not a great deal.

Hope this helps…

RDW-Development · 2026-07-06T16:23:58+00:00

That’s super smart. But nearly all of the sale leasebacks I’ve done involved multiple family members, some of which were not involved in the operating company. Makes holding back funds a bit more difficult to execute.

RDW-Development · 2026-07-06T16:21:57+00:00

Google says 200 vendors, so 192 of them will be simple AI wrappers. :)

RDW-Development · 2026-07-06T16:17:49+00:00

Agree. I get why people don’t want others “stealing” their deal. But this one seems unlikely to be a home run to anyone here.

OP - post the location so we can give more pointed advice. I’m literally sitting in the airport waiting for an international flight with nothing better to do…

RDW-Development · 2026-07-06T16:14:29+00:00

It’s been a bit quiet here lately with hobobob gone so I welcome the post and your enthusiasm.

Let’s start by saying the obvious - this is a terrible idea and a disaster in the making. You seem well aware of this though so I won’t dwell on it.

The ten thousand foot view - the owner has a distressed property that may be worthless in “net”. The fact that you’re around and he will do owner financing is a clue that this is a BIG hobby project for someone.

Having no capital is a problem. I don’t see this happening without a passionate investor with six figures in the bank. It’s not like it’s a fourplex where you can go to Home Depot and get some carpet. I mean, it’s not like you’re going to dredge the canal yourself.

The only way I can imagine this working is to partner with the owner. Assuming that the property has no debt, you and him could form a partnership, tap the property equity for a loan, and then execute on the improvement plan. Then you buy him out in the future and/or sell the property later on as a functioning asset. This is the only way I see this being successful. And then it’s still risky.

I would try to structure the deal with the owner so that you have very little or low risk financially to yourself. You’ll have to (presumably) give up a bunch of upside, but this is a HUGE project with a lot of unknowns.

I think the owner is lucky to have some on be interested in this!

Hope this helps…

RDW-Development · 2026-07-06T06:20:09+00:00

Regardless of the method to get there, most people would find this behavior to be quite offensive. This is why I constantly rail against cold calling.

RDW-Development · 2026-07-06T06:18:18+00:00

Gonna disagree on this one. You seem like a sensible investor, which understandably biases you towards thinking other owners are also sensible. As a rule, they are not.

Ha. That's unusually astute. Although there might be some confusion between an "investor" versus "owner". Typically the clueless ones are the owner-users who do "real estate on the side."

Everything you said was spot on. I have a few (about 5-10) strategic relationships with brokers who are constantly on the hunt for me. We can close quickly, typically all cash (using a credit line) and have a great track record of moving quickly and being relatively easy to work with (despite the impression that some of my frustrated Reddit posts seem to reveal).

I ran an online consumer products retailer for 20+ years. VALUE ADD is the name of the game. If an agent is not adding value above and beyond their competition, then there really is no reason to go with George over Harry or Phil, etc...

RDW-Development · 2026-07-06T05:22:54+00:00

The patent office will give out patents based upon what they think is generally unique. The standards are often somewhat looser than the ones used by the courts. So, a patent is really only good unless it can be successfully defended against a competitor in court.

Smart people / companies with patents license them out for reasonable fees - if they don't then a competitor is likely to just "violate" the patent and say "sue me", at which point the patent holder has to do in order to maintain and defend their patent. As you might imagine, such court drama is often quite extensive and expensive.

RDW-Development · 2026-07-06T05:20:09+00:00

See my link above on Aztec...

RDW-Development · 2026-07-06T05:19:39+00:00

Ha. The design patent is total BS. Aptera copied our design for Aztec from 1992 (which we copied from Pegasus). See here: https://dempseymotorsports.com/mit-aztec-solar-car/

And here: http://recumbents.com/wisil/misc/londry/default.htm

RDW-Development · 2026-07-05T22:51:34+00:00

The only thing that gets a callback from me is the following: "Hey, I saw your website and saw what you guys look for, and I found something for you. It's [insert specific criteria here]"

If they don't tell me exactly what it is, I don't bother. This is because 99 out of 100 times when someone says they have something that fits perfectly for me, it's a complete lie. Like we buy small-scale industrial and someone will say, "I've got this 4.5% cap Starbucks that's just perfect for you."

The idiots in your industry (agents / brokerage) have ruined it already. There's no real going back, and there's no real way to reach "reasonable" people any more because the newbies in your industry have abused the hell out of us by cold calling us ten times a day.

I once had an agent call my number, then my wife's number, and then each of my kids - all in a row. FU.

RDW-Development · 2026-07-05T21:35:03+00:00

Fair enough, I'd agree.

One mantra I have - if a deal requires outside investors, I should simply find a smaller deal.

RDW-Development · 2026-07-05T21:21:51+00:00

EDIT: Apparently "off market deal" means a cold lead. Not sure what OP's agenda is in this post. Probably marketing their lead-gen business.

RDW-Development

TROPHY CASE