Hey all,
So my in-laws finally sold their restaurant (Chinese restaurant in the SoCal area) after years of listing it. The restaurant is run in a rented space that they pay 'discounted' rent on to the current landlord. The current landlord was very particular about wanting to keep it a Chinese restaurant where someone would just take over operations or re-brand. At the same time he wanted to make sure my parents had fair or better offers on the table - he could have accepted offers from other prospective tenants to come in paying much more for rent but he wanted to make sure my in-laws sold the restaurant first, which is a nice gesture. My in-laws had a really good relationship with his parents, who were the prior landlords of whom he inherited the property, so that's mostly why.
A buyer came in offering to do more or less the same at way under their asking price ($180k offer with $60k of seller financing against the asking price of $230k) but there was at least one other offer on the table. My in-laws were so desperate they they accepted the $180k w/ $60k seller-financing w/ only 8% interest on a 2yr term as they didn't want to have the offer "walk off the table" - they didn't even consider countering. They are past retirement age and just want it off their hands, so understandably so but they tend to rush head-first into these kinds of decisions and it ends up being a bad decision down the road. This is what I fear regarding the whole seller-financing part too. I guess the upside is that they'd get $120k out of it and the restaurant back. I just don't understand why they didn't counter when they had the leverage of the other offer, or at least counter with a higher percentage interest rate. We spoke to the broker before they received the offer, anticipating what it would be, and he was leaning towards countering up especially if the buyer wanted a big discount + seller financing. Apparently my in-laws didn't listen to him, which is their bad, but ultimately their decision.
Anyway, what are some other unforeseen risks that we/they should be aware of in this kind of situation?