Author Topic: starting a business without putting current status as FIRE at risk  (Read 1257 times)

tag

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We are FI, but not yet RE. My husband will work another 1-2 years and I have a side hustle.

I am strongly considering starting a new business. I'm 36 yo and absolutely craving meaningful, purposeful, creative work.

My first idea was to purchase commercial real estate, start a business, and have the business (possibly nonprofit) lease the space from myself. So that I could be in it for the creative outlet/contribute to the world thing....but it would also be a real estate play in the way of cash flow and appreciation.

One of the properties I'm looking at is complicated. I could probably get a crazy deal on it. But I will have to jump through re-zoning hoops and also renovate it. It's a historical building - a 100 yo church. My exit strategy with selling a building like that sometime in the future concerns me.

But it feels too risky. If the business doesn't end up working and can't pay me so I can pay the mortgage....it could compromise our financial independence.

I'm looking for thoughts, comments, opinions, articles, book titles, feedback on this concept...

Could/should the business I want to start purchase the property?
Since it's a landmark type building for our area - could the neighborhood association buy it (if I fundraised)?
How can I buy a property and/or start my business without using my money?

The other option is to lease a space....

walkwalkwalk

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Re: starting a business without putting current status as FIRE at risk
« Reply #1 on: December 02, 2018, 09:44:09 AM »
Can you subdivide the space so you could use a portion of it and lease it out to other companies or do a co-working space possibly? Just some ideas. I don't know what your business is, so don't know how much space, etc it needs.

tag

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Re: starting a business without putting current status as FIRE at risk
« Reply #2 on: December 02, 2018, 03:04:56 PM »
I do have sub-leasing built in....still seems pretty risky!

damyst

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Re: starting a business without putting current status as FIRE at risk
« Reply #3 on: December 08, 2018, 01:45:09 AM »
Would you say you have an interest in, and/or aptitude for, property management for its own sake? Sounds like yes, at least for the latter?
I suspect you'll end up spending a substantial amount of effort managing the property. If it's okay with you, then awesome. If it would be purely a chore, that's another story.

soccerluvof4

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Re: starting a business without putting current status as FIRE at risk
« Reply #4 on: December 10, 2018, 06:30:00 AM »
I don't think you can make any educated analysis on moving forward till you can find it can be rezoned. Especially if it is a designated Historical building.

trollwithamustache

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Re: starting a business without putting current status as FIRE at risk
« Reply #5 on: December 10, 2018, 07:39:30 AM »
1. have you done anything like this before?

2. why is it good business to limit your potential clients to just non profits?  (does it help with the zoning changes or something?)

c-dub, c-dub run

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Re: starting a business without putting current status as FIRE at risk
« Reply #6 on: December 10, 2018, 01:37:21 PM »
I'm glad to have found your post as I have been thinking/feeling the way that you do regarding finding meaningful, purposeful, and creative work. My suggestion is to take on as little risk as possible. Purchasing real estate without an already formulated business plan would be a huge risk. Similar to the advice found under the real estate and landlording section, don't make your business suit the property, have your idea and find the right property for your business (if you find after already starting your business that you in fact need a property)...

HipGnosis

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Re: starting a business without putting current status as FIRE at risk
« Reply #7 on: December 12, 2018, 03:38:40 PM »
For finding and starting a business with limited risk; google "bootstrapping"

tag

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Re: starting a business without putting current status as FIRE at risk
« Reply #8 on: December 28, 2018, 08:31:13 AM »
Would you say you have an interest in, and/or aptitude for, property management for its own sake? Sounds like yes, at least for the latter?
I suspect you'll end up spending a substantial amount of effort managing the property. If it's okay with you, then awesome. If it would be purely a chore, that's another story.

I don't have a strong interest in property management. I spent a short amount of time managing a couple of residential rentals. This whole thing is a passion play for me....If I ended up as a property manager, I'm not interested.

I do have a list of ways I do want to spend my time within this business as well as a list of things I do not want to do - meaning if I can't outsource it for whatever reason, this gig isn't for me. On the list of what I don't want to do is social media.

To your point.....I also have been thinking A LOT about what this business really would be for me. I'd love to find/hear other examples. The one that rings true for me is all of the time I spent envisioning riding bikes with my kids, camping, cooking etc...only to find out that what being a parent really means is you are a house cleaner and a short order cook. Definitely humor in that example but you get the point. I imagine those who manage their own Airbnbs might spend a lot more time cleaning than they thought they would. I have no problem with cleaning house but it's not my passion project.

tag

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Re: starting a business without putting current status as FIRE at risk
« Reply #9 on: December 28, 2018, 08:34:23 AM »
I don't think you can make any educated analysis on moving forward till you can find it can be rezoned. Especially if it is a designated Historical building.

Yes, true. I have an update there. I don't need to re-zone. I actually can't re-zone. My only shot is if the city accepted my project as a special exemption, so that is what I am applying for. Agree I need to get that squared away first, but there are a few other things I can flesh out while waiting for that. It is pretty likely that the city will accept, based on my recent meetings.

That is good news. But the flip side of that is if/when I ever want to sell the building...whoever wants to use it in the future would also have to be a special exemption case. It will never be a restaurant, bar, retail etc. It could be a 6-8 unit residence or single residence, or a church...

tag

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Re: starting a business without putting current status as FIRE at risk
« Reply #10 on: December 28, 2018, 08:37:46 AM »
1. have you done anything like this before?

2. why is it good business to limit your potential clients to just non profits?  (does it help with the zoning changes or something?)

1. No. Nothing remotely close.

2. Miscommunication in my post. Definitely would not be limiting clients to nonprofits. I am considering structuring the business as a nonprofit though. That is another question I need an answer to....why should or shouldn't I set up as for profit vs nonprofit. There is another coworking space in town (very different than my plan) which is set up as a non profit.

tag

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Re: starting a business without putting current status as FIRE at risk
« Reply #11 on: December 28, 2018, 08:45:51 AM »
I'm glad to have found your post as I have been thinking/feeling the way that you do regarding finding meaningful, purposeful, and creative work. My suggestion is to take on as little risk as possible. Purchasing real estate without an already formulated business plan would be a huge risk. Similar to the advice found under the real estate and landlording section, don't make your business suit the property, have your idea and find the right property for your business (if you find after already starting your business that you in fact need a property)...

Yes, agree with that - little risk as possible. I would absolutely not purchase without a business plan. I am moving forward in the process at a snail's pace and using every bit of free consulting I can find before making any kind of committments. And will do thorough research to test if the business will fly or not before offering on the building. I like that - don't make business suit the property. Can you talk to me a little more about that? I get what you're saying but I'm not clear about whether or not I'm doing that. The reason I like the building I'm after is because

1) It's a historic building - lots of charm and character which I think would really suit what I'm trying to do....Style/design supports the vibe and energy of a space. I feel like it's the kind of building that should FEEL like it belongs to a community/neighborhood.

2) The floor plan is pretty good. Open sanctuary upstairs for co-working. Lower level has separated rooms conducive to kid space.

3) Location is perfect. 4 blocks to retail, highly desirable restaurants/bars...5 minutes to downtown...in an affluent biker/walker friendly neighborhood.

trollwithamustache

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Re: starting a business without putting current status as FIRE at risk
« Reply #12 on: January 01, 2019, 04:06:41 PM »
1. have you done anything like this before?

2. why is it good business to limit your potential clients to just non profits?  (does it help with the zoning changes or something?)

1. No. Nothing remotely close.

2. Miscommunication in my post. Definitely would not be limiting clients to nonprofits. I am considering structuring the business as a nonprofit though. That is another question I need an answer to....why should or shouldn't I set up as for profit vs nonprofit. There is another coworking space in town (very different than my plan) which is set up as a non profit.

it would seem if its a non profit, then its not a business?  This seems like something to discuss with an accountant... but it would seem if its a non profit, you can pay yourself a "reasonable wage" but would limit your upside potential? Also I would think whatever funds you put in the non profits to buy the place can't really be taken back out, at least not tax efficiently?


Kroaler

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Re: starting a business without putting current status as FIRE at risk
« Reply #13 on: January 04, 2019, 09:44:27 AM »
I read your post and I feel like you know you want to do something, but arent fully sure what?

What made this building and this idea jump out to you and not something else?


There are lots of ways to start big business ventures and never use a dime of your own money.  Unfortunately Im not familiar with any of them.


On the upside, there is an interesting book called "the 100$ startup" that you may find interesting if you want to start a business that is fulfilling yet not expensive to start.

Kronsey

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Re: starting a business without putting current status as FIRE at risk
« Reply #14 on: January 04, 2019, 11:27:13 AM »
So is the "business" the building purchase itself, or is the "non-profit" a separate business that would just be leasing space from the commercial building you are interested in purchasing?

What is the actual business/non-profit? What services are you wanting to provide?

Sounds like you are way too early in the planning stages to even be considering a building purchase. You need to put more effort in creating a realistic plan/timeline for the ACTUAL business/non-profit. You shouldn't be considering any real estate at the start unless absolutely necessary. At this point the whole idea is a pipe dream at best. Whatever you do, don't go investing a bunch of money in something you have little experience in.


If the idea of wearing many hats turns you off, just get a job at a non-profit that has a mission similar to what you want to accomplish. I don't care if you start with $1K or $100K, you, as the founder/CEO, will be wearing a lot of hats for a long period of time. Those are just the facts of life...

I apologize ahead of time if my post seems debbie downerish, I'm just trying to save you a lot of financial and emotional heartache before you bite off more than you can chew.