Self-funding ups and downs

searcher profile

December 19, 2019

by a searcher in Seattle, WA, USA

In the vein of https://www.searchfunder.com/post/self-funded-acquisition-a-few-things-i-learned

Made a small acquisition earlier in the year and wasn't ready for another, but as fate would have it one fell in my lap thanks to the 4 D's (or is it 3? Or 5? :)

At any rate, a very good deal, but I couldn't quite come up with the full (very good, non-negotiable) buy price on my own and I have a bizarre mortgage issue w/my personal residence that makes bankers heads spin, so that funding route is closed, and the shortfall was a mere $250k or so, which is too small for the vast pool of private equity options out there and a little large for the typical individual to be comfortable with.

Fortunately I know some atypical individuals so I reached out to them and thought we were good to go, but oh no...!

One month to closing:
Investor A - sure, no problem, as soon as I'm back in the country I'll just cut you a check
(Me: yay!)

Two weeks to closing:
Investor A - I don't actually have that liquidity, I was going to just cash out one of my real-estate deals that was in progress when you called, but it just fell through and I'm too leveraged to do anything until some other deal goes through, could be a few months.
(Me: OMFG!)
Investor B - sure, no problem, as long as my CPA gives it the high sign I'm in!
(Me: yay!)

One week to closing:
Sellers are supposed to provide the semi-final numbers for evaluation by Friday, Investor B's CPA will review over the weekend before going on vacation for two weeks.
But...
Friday passes, no numbers.
Saturday passes, no numbers.
Sunday passes, no numbers.
Monday numbers come end of day w/apologies.
Investor B - I'm so sorry, but I really can't do this w/out my CPA's input.
(Me: OMFG!)
Sellers - that sucks, but we have a timeline that can't be moved. However, as we're so close to the closing there's no time to find another buyer how about we finance the remainder?
(Me: yay!)

And the deal went through w/paperwork being updated w/new terms at literally the 11th hour.

Hope that helps somebody who's feeling stressed at some point - don't give up! :)

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Reply by a searcher
from Stanford University in Houston, TX, USA
This is great Michael and really appreciate you sharing. Congrats on pushing through to close!
commentor profile
Reply by a professional
from Vanderbilt University in New York, NY, USA
Congrats and thanks for sharing.
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+8 more replies.
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