My husband and I were in the works of buying a commercial building (3000 square ft) and remodeling it. The downstairs would be the bakery, and we were going to live in the upstairs. It would be a lot of work because the building is completely empty, no equipment. The upstairs has no walls, no plumbing, and no heat/air. The owners want $50,000.00 for the building and we were going to spend $50,000.00 fixing it up. We currently have no debt and are in an excellent place in our lives to do so. Long story short, the bank doesn't want to take a chance with the equipment and the upstairs remodeling. They will only finance the building.
I told my family about my ideas of opening the shop. Everyone was excited except my grandfather who is 81 and lives in Florida. He wanted to know everything about the place. He had no idea the bank would not finance the rest. He called me a week later and offered me $50,000.00 and asked me if I wanted a business partner. I was speechless, but when I could gather my thoughts, I said no.
I told my husband, and he wants to do it. I have my doubts: what if I fail, what if he needs the money, what would the rest of the family think, how much control does he want?
Anyway, any advice would be great. I feel grateful that he would be so confident in me and fortunate to have such an offer.
tough one...
at 81 he may be looking to leave some sort of legacy and helping you out may be his way.
bigger problem would be after he dies and his heirs maybe demanding the money back or partnership in business too.
and that's too much for it to even be an outright gift.
Have you checked w/ the Small Business Administration for a loan? they have several programs for just such situations.
also have you tried other banks or using a combo of banks, one for building and one for remodeling the upstairs and then SBA for bakery???
Talk to your grandfather again. It will take some talking to iron out details of control, and what happens if he dies. An estate lawyer might help with the arrangements about what happens with his death.
If it is what you want, and you and your husband are both willing to work your asses off, it could be the opportunity of a lifetime.
Suzy, Doug made a good suggestion for the SBA has 'mentors' who can assist you in drawing up a business plan and a product and demographic model too. All important pieces of a successful risk analysis and retail profile.
I am a business consultant who does cookies/cakes on the side, I've also been in business with 'family' in my lifetime and although this can work for you with your grandfather, the questions you are asking are ones that will need answers. Think of it this way too, if you can't go direct to ask your grandfather gently and sincerely what his expectations are, then it's likely you may not have the communication you will need to go the distance as partners.
You have a good problem though, someone who believes in you and willing to invest in you 
Yes, I've checked out doing separate loans for each floor, but the banks are very cautious in doing so. They don't want to be second in line to get the property if the business fails. I have not checked out sba yet, but I will do so before we go any further.
thanks
I don't know what the situation is in the states, but in theory in Germany you can receive a sort of pre inheritance. If your grandfather will have 50,000 for all of his heirs he can write a sort of preinheritance clause, where he cedes the money to you while he is alive. This then gets subtracted from your share of the inheritance, in the event of his passing. In any case you will have to consult a lawyer, I am not sure about inheritance taxes etc in the States as well
It's my understanding if you own 51% of the business and your husband 49%, you qualify as a minority business owner and can gets loans as such.
Personally, just based on the information you provided, the building isnt quite worth $50,000. If it's just an empty shell, ya know what I mean? I think it really depends on if you really want your bakery.
Additionally, based on my interior design experience, 50K isnt a lot when you're remodeling a commercial building. I would estimate about 8k of that to be consumed by the HVAC and plumbing. And that's conservative. Not to mention, framing, drywall, flooring and all of the other stuff. I also assume you have to buy equipment for the bakery? There are a lot of costs that have to be considered and if it is just a shell, I think its going to cost a lot.
Though it's nice to get the offer I'd have the same concerns....I keep hearing, "never mix family w/business" in my head.......unless you get a lawyer involved I wouldn't accpet the offer and I agree 100% w/ what tmdoxie said. Yes, 50K is a lot but not really when you're talking about an "empty" shell......sounds like you'll nedd more that 50K to get this place where it needs to be in order to run a business.
Thank you for all your advice. I'm just getting more conflicted because my husband is all for it. He doesn't think we should pass up this offer.
The building is an empty shell, but it is in the center of town, is 3000 square feet, and luckily my husband can do a lot of the dirty work.
I don't think I mentioned this before but we can pay most of it off when we sell our house we are living in now. Does that change anyone's opinion?
I like the idea about the loan, but if something happens to the grandfather then other family might demand the money. I don't know. I think you should seek legal advise. Also, my husband is a contractor and I see what money will get you as far as remodeling and I don't think 50K is enough since its an empty shell.
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