Example: Purchasing a Hotel / Pub, Plenty of Money Down

awesome story son of trigger, couldnt stop reading it ! Hope your payg job has eased some creases from the forehead, in small bus and know what its like.

 

1. I believe the previous owner made nothing over their five years, and maybe went backwards
2. The security was released by the bank as a solution to the FOS complaints - the actual mortgages against me were not forgiven, there was just less security for the bank to pursue
3. If they can they will go for summary judgement and hound you for the next 15 years
4. Going to the pub is pretty expensive vs buying a carton. We saw a substitution effect and some of it never came back

Not everything was the GFC - I was far too cocky and far too slow to react or make changes in some cases and too reactionary in others. I guess thats called experience now ;-)

 

Very true about moving on. I was bitter for a long time, its only now 5 years have passed that i can see some silver linings - I hated the job!

 

When i look back at how many posts this took I think it exceeded my total output for 12 years on Somersoft.

I actually started writing it all down a few years ago - tentative title "To Hell and Banks" lol

I'm still working on the ending ;-). Probably involves a million dollar house in downtown Charleston!

 

I wish you all the best! PAYG is a cakewalk after small business. You show up, do some paper shuffling for 7.5 hours, go home and they pay you, with money, real dollars!

 

@SonOfTrigger , like others have said, thank you so much for sharing your amazing roller coaster journey.

Small business is very tough. There's nothing glamorous about 18hr+ working days seven days per week, fighting with council who are trying to stop you because of a DA issue (caused by them), dealing with body corporate who also want to shut you down, and some plain incompetent 'professional's'. Your experience sounds like a heavier version of mine.

Life goes on and keep on looking ahead as that's where the road takes us.

 

When we're younger we always think we are bullet proof.

Your story is amazing. You hear of people who have pulled the pin for much less stress than what you and your wife have gone through.

 

You have a very clear style. Maybe you should ....

 

Maybe a book of all the best stories (good and bad) from PC should be combined in a book...? Perp's story also comes to mind.

 

Thank you for what has been the best thread I've read here on Property Chat since the forum started.

 

@SonOfTrigger thank you for being so honest and sharing your story. I wish you all the best for the future.

 

Thankyou for telling it like it is. Business is tough and that is a real eye-opener. I always thought that we'd been through the wringer, but when I read about your story, well, there is no comparison

How did you go with the security over all of your families properties? And are you still paying for it today?

 

Tip #1 - Request individual BAS & BAS statements to match to the financials
Tip #2 - Request bank statements to match deposits to BAS to financials

Buying est business 101.

 

Wow what a story. I have had a business fail before but nowhere near this level. Glad you got through it (relatively) intact

 

So initially we had stumped up this security (estimates as best I remember the vals - I've mentally blocked the exact figures)
$2M the pub building
$650k parents PPOR and inlaws PPOR
$700k own PPOR
$320k other resi (business loan)
against $2.4M in borrowings

The family properties title deeds were returned by the bank during our Financial Ombudsman campaign with no liability admitted and the pub was sold for $1.1M which went to the Receivers bill. So with the changes in security we ended up looking like this.
$700k own PPOR as security against $2M debt
and
$320 resi against $250k debt.

If we did nothing the bank(s) would achieve a summary judgement - they go to court and say you have no defence against their claims, the judge agrees as you haven't defended it and the bank is able to chase you for 15 years against this $2M note they hold on you. Our wonderful Melbourne solicitor and barrister (with us in attendance) spent 10 straight hours negotiating with the banks legal eagles at a mediation facility to result in an outcome we could live with.

They bank wanted the parents to voluntarily hand over their property (why would anyone do this?) plus take our property and us to pay the remaining $1M in cash. LOL. Great opening position.

 

If only anyone ever told me this. It seems so basic in retrospect but had never occurred to me or anyone I've known who has bought a business.

 

If it is any consolation that is not necessarily foolproof. My accountant told of people who paid a lot of money for a duck farm (business not the land) on the strength of what were grossly overstated income tax returns. I remember thinking (and this was a fair few years ago) that there was not really a big market for duck meat so how was this going to make money.They went under when it turned out there were not the sales claimed.

All you can do is ask for the paperwork and investigate- not a guarantee but a good start to uncovering misrepresentation.

When clients buy food retail businesses I tell them to go and sit outside all day (for a few days is even better)and watch how many customers go in. Multiply by the average sale price to give you an idea of weekly turnover. The clients are always too busy to invest this time it seems.

If I were buying I would work in the trade as a casual for 6 months to see the ups and downs so I would have the knowledge and a few skills to help in the purchase.

Once again SonOfTrigger a real eyeopener for people . Thanks for sharing.

 

Good advice - in my time since I've seen faked payslips, tax returns, bank statements, the works and not obvious ones either. A lot of documentation is easily replicated now