2/x How are companies like Jersey Mikes, Massage Envy, Moes Southwest going to take on a bunch of debt right now and possibly pull out of it?
The next 18 months will be brutal. 1/2 the volume as the previous 18 months of they’re lucky.
3/x This guy (whos had a doomsday attitude since March BTW) wants to open up the floodgates to get them capital?
Are things going to get better for retail? Not for a while...
They can’t get debt because they can’t afford debt. Period.
4/x Hibernate, use PPP money, cut costs and wait for stimulus. Don’t take debt to throw good money after bad.
The companies that stop spending and restructure for the post-Covid world will survive.
The ones with interest payments they couldn’t afford before Covid will die.
5/x we should absolutely not put tax dollars out in the form of SBA loans to retail chains right now.
Stimulus? Sure. Non-guaranteed debt? Sure.
But long term guaranteed debt as we know it and did it the last 10 yrs?
Am I the only one who thinks that’s silly?
6/6 I’m sure a lot of people a lot smarter than me will be able to put me in my place and educate me.
What am I missing?
It’s a debt crunch. In some cycles debt gets harder to get. That’s what we prepare for as business owners. I’m confused at the response. Levering up right now isn’t the answer.
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First, get on google maps and search "self storage".
Make a spreadsheet of all of the mom-and-pop facilities within 2 hours of where you live.
Rural is fine. Suburbs are fine. You likely don't want to afford the ones in the big cities.
Avoid the REITs.
Call them up and say -
"My name's Nick and I'm interested in making you an offer to buy your facility. I'm not a broker and I don't need much information to make you an offer. I'm not trying to low ball you or waste your time"
My sons are going to grow up very involved in the family business.
They won't be allowed to head off to college until they source, negotiate, syndicate, close and operate a piece of real estate (with my guidance and co-sign, of course).
I'll put them on the phones to call owners until they get a deal.
They'll underwrite it and build the models.
I'll put them on an airplane with a presentation (alone) to see bankers and pitch LPs.
They'll use broom to sweep the units. Take the calls from angry customers...
They won't be given anything - they'll need to earn it all.
They'll learn the value of a dollar by working for it.
They'll be humble and open minded.
They'll learn how to sell themselves and their ideas.
I'll show them how to treat a woman (their mother) with respect.