| After half a century of buying businesses, people still | | | | the water as an investment. |
| ask me why I spend so much of my time investing in | | | | But it's actually more than that because the amount |
| buying businesses instead of real estate, the stock | | | | you normally invest (if you use investor financing) is as |
| market and other things like that. | | | | close as you can get to zero in most cases. |
| And I always tell them -- and this is absolutely true -- | | | | And while it's true you need to have an attorney and a |
| the reason I don't do anything but buy businesses is | | | | CPA help you through the whole process, if you |
| because, in 50 years of doing so, I still have yet to | | | | understand what to say to them, they'll "ride along" with |
| come across a better investment than buying a | | | | you, not billing you until after you actually buy a |
| business. In fact, nothing else even comes close in | | | | business -- so you can pay them with money from the |
| terms of both return on investment and risk. | | | | business you bought, and not your own money. You |
| Let's put it this way. If you get any financing at all, the | | | | may also have expenses for traveling to different |
| cap rate on the average business with somefinancing | | | | cities, too, if you choose to go long distance. But even |
| is about 60 percent. What I mean by "cap rate" is | | | | with that, you just make sure you tell your investors |
| you're getting 60 percent of your money backevery | | | | that at the close of escrow, you're pulling back all the |
| year. | | | | money you invested. Which they will almost never |
| So, if you invest $100,000, you're going to get $60,000 | | | | complain or care about. |
| back a year. I mean, on real estate you invest a | | | | Again, I have yet to see anything else that even |
| $100,000 and you're going to get 10,000 back -- if that. | | | | comes close to buying a business as far as return on |
| So, buying a business gets you six times what you | | | | investment and risk go. |
| normally get with real estate and blows it right out of | | | | |