Mark McMahon

Why The SBA 7(a) Loan Program Is The Best Financing Option To Buy-Out A Partner Business succession planning is vital to the longevity of any business. This is especially true when a business is owned by two or more individuals, for seldom do business partners share the same retirement and life goals. Therefore, a business is most likely to experience an interruption or even worse, the ceasing of operations altogether, when one partner is ready to exit the business and the others are not. This matter is further complicated when the partnership also owns both the business and the real estate from which the business operates. Possible scenarios, when one partner is ready to exit and the others are not, include a private loan from the partner exiting the business to the remaining partners, an earn-out for the benefit of the partner exiting the business paid out over several years or a venture capital non-bank funding source. These funding sources are often expensive and complicated. None of these scenarios likely meet the goals of all parties involved. On the other hand, if a partner buy-out is structured correctly, the SBA 7(a) loan program is perfectly suited to meet the goals of both the partner exiting the business and the remaining partners. The partner exiting the business is able to receive full payment for their equity ownership and therefore enjoy retirement by dropping all involvement in the business. The partners remaining in the business take 100% control with no cash out of pocket as long as the business balance sheets for the most recently completed fiscal year and current quarter reflect a debt-to-worth ratio of no greater than 9:1 prior to the change in ownership. Other benefits of the SBA 7(a) loan program include: SBA loan interest rates are competitive with conventional rates SBA guarantee fees may be financed instead of paid out of pocket preserving precious operating capital The loan is amortized over a 10 year period There is no prepayment penalty There are no financial covenants or burdensome annual documentation review requirements When the real estate is owned by all partners and included in sale, there is the ability for the partners remaining in the business to combine the partner buy-out with the real estate purchase into one loan amortized over a 25 year period

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USA Data: 10% of real estate agents changed brokerages in the last 12 months. Mike DelPrete insightful article sheds light on the significant movement within the real estate industry, with over 144,000 agents switching brokerages between June 2023 and June 2024. The data underscores the critical role of recruitment and retention strategies for brokerages, especially as lower producers show a higher tendency to switch. Highlights: - High Churn Rate: 10% of agents transitioned to new brokerages in the past year. - Non-Producers: Nearly half of agents sold zero houses in the last 12 months. - Active Agents: 14% of agents actively changed brokerages. - Top Producers: Even agents with $50 million or more in sales had a churn rate exceeding 10%. - Agent Tenure: Newer agents are more likely to switch compared to those with over 12 years of experience. - Office Size Impact: Larger offices (500 agents) experience a 33% higher churn rate. Real Estate Brokerages need to: - Focus on Retention: Prioritize strategies to retain high-producing and newer agents. - Targeted Recruitment: Develop tailored plans for agents prone to switching. - Support Systems: Implement robust support and career development initiatives for newer agents. - Positive Culture: Cultivate a welcoming office environment to reduce turnover in larger offices. I wonder what the numbers would be in Asia. Markets like Malaysia, Thailand, Vietnam, and Philippines have huge recruitment numbers. I personally know agents who have jumped agencies more than four times within a two-year timeframe. The grass is always greener.....(well, you know where) The point is - 5% of the agents still produce more than 75% of the transactions. Agencies still promote this business as an " earn fast, success overnight" industry. However, the numbers show a different reality. I guess things will only accelerate in this industry, which has more tech, models, methods, and AI. We have more shiny objects to show potential agents. Let the hunger (recruitment) games begin!

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📌 REMINDER!! #RealEstateEducation #NARRuling #BuyerAgency #ContinuingEducation #CanyonTitle #RealEstateExperts #ProfessionalDevelopment

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If you want to hear the latest insights from Florida's real estate market, this is your episode. I am joined by my dear friend and industry expert, @AaronAbaddie, who shares invaluable insights on the current trends reshaping the landscape. In this episode, we cover: ·  The impact of rising HOA fees and insurance costs on coastal condos. ·  The forecast of an oversupply of condos and the growing allure of non-HOA properties. ·  A real-world case study of a new construction duplex in Ocala, showcasing investment opportunities in Central Florida. ·  Practical strategies for dealing with challenging sellers and the importance of continuous training and personal development. Whether you're an investor eyeing the Sunshine State or a real estate professional looking to stay ahead of the curve, this episode is packed with actionable insights to navigate the current market dynamics.

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🏡Big Changes in #RealEstate as #NAR Settlement Takes Effect🏡 As of 08/17/2024, two major updates have changed how #realtor commissions work: 1️⃣ No More Hidden Commissions: #MLS has removed seller commissions from listings, ensuring equal exposure for all #homes. 2️⃣ Buyer-Agent Contracts: Buyers must now sign a short-term agreement with their agent, setting clear terms for commissions. This could lead to more competition among agents and potentially lower #property prices! 💰 Read more about👇 👇 👇 https://lnkd.in/e2aW8zgv #economy #titlesearch #realty #realtyinvestor #investing #realestateinvestor #alexgoldovsky

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