Examining Actual Deals

Question 1

What are some of the things we can learn from actual deals?

Answer 1

1. Loan payments should match cash flow.
2. Don’t be afraid to make offers that work for you.
3. Cash within 12 months is almost as good as cash at closing.
4. Expect to renegotiate after the search for financing is underway.
5. Sometimes you can borrow more than you think, it may not always be such a good idea.
6. Some banks have programs that allow debt to look like equity so you can meet the
   debt:equity ratio requirements.
7. Sometimes sellers get bad advice.
8. Sometimes businesses can pay for themselves.
9. You don’t always have to buy today to end up with what you want.
10. Sometimes you can finance the purchase in a creative way.

Question 2

Notes about Vendor Financing.

Answer 2

• There are no rules.
• Longer terms are better than short.
• Lower interest is better than high.
• Fixed interest is better than variable.
• Match payments to income.
• The terms can be more important than the amount.