Did you relocate for an acquisition? What was it like?
March 26, 2024
by a searcher from University of Massachusetts at Lowell in Worcester County, MA, USA
My search radius has taken me outside of 2 hours of my house. So I'm seriously considering relocation as part of my acquisition strategy so that I can be 100% mind on business from day 1.
I have a wife and 2 kids under 3 YO, so I figure I got one more big move in me before it becomes a burden on the rest of the family.
I'm curious about the people on here who decided to relocate for an acquisition target. How did you manage the move? Did you close first before making the move? Did you buy a house to move your family in? Did you move to the area before or after the close? Any advice or landminds I should consider?
from University of Pennsylvania in Portland, OR, USA
What is different is the limitation on you regarding real estate with an SBA loan and no income history from your new legal entity. If you are a renter and don't mind renting in the future it's not a big deal. If you own a home or want to buy one, get very clear on your plans with your lender in advance and understand their requirements.
We relocated 300 miles to buy the business. My lender has been great. No surprises, but it's still not easy. The equity in our original house was considered collateral for the SBA loan. Therefore, when we sold the house those funds either had to go toward principle of the loan or be held in escrow until we provided another asset as collateral. When buying the new home, no bank would give me a mortgage until the new legal entity had two years of history providing me earnings. This was despite being over 50 with a sterling credit history and substantial liquid assets in my personal accounts. We worked through all of this, but it was complicated. Talk to lenders and know what you're getting into.
from Texas A&M University in Elizabethton, TN, USA
Highly recommend the relocation if you acquire it, but also strongly recommend to acquire closer to where you currently are if possible.
I was able to "phase in", living in acquired town with some relatives for 2-3 months until family could join and house get sold.
Rebuying may get hard during transition as your W2 (if you have one) ends and gets replaced by the complicated underwriting of being a small business owner.
Might not be best time to buy anyway right now with peak(?) interest rates and possibly housing prices. Lots of price cuts in housing market now that weren't there two years ago.