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Selling A Property To Start A Business

Discussion in 'Financing Your Business' started by eProject, Feb 24, 2016.

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  1. eProject

    eProject Member

    Can you sell your property to start a business? Let's say you have a land that you had bought earlier, will you sell it if you want to raise capital? My friend sold a house that he had bought earlier last year and started a taxi business. Unfortunately Uber is giving them a lot of competition since he can't keep up with the latest technology that Uber uses. He claims that he doesn't make money as he used to.
  2. MeshBean

    MeshBean Member

    It depends on the property value and the business itself. But I would not do that unless I was 100% sure that my business worth it and it pay me back .
  3. remnant

    remnant Member

    Business is about possibilities and there is always an element of risk. That is where entrepreneurship comes in. The keys to success is having short, medium and long term goals. That involves viewing every problem as a learning experience. Adaptability, innovation and diversification is the key.
  4. Vinaya.Ghimire

    Vinaya.Ghimire Member

    Lets analyze the facts. The property value is increasing just by 1-2 percent annually however, your business investment can give you more than 10 percent ROI than selling properly is definitely better. If you are not a risk taker than you should never sell your properly for business.
  5. Corazon

    Corazon Member

    If the property is a non-performing asset then I guess it is not an issue if you sell it for use as capital to a business. However, you have to consider that a real property - land or house or building - is an asset that appreciates in value. And if your business does not prosper and you lose money then it is like losing the value of your asset. I have a colleague who sold their small house in favor of a transportation business. After moving to a rented apartment, they bought a van from the proceeds of the sale. The van is driven by her husband that is rented to a tv station for purposes of shooting. It is doing well.
  6. Bonyi

    Bonyi Member

    In my opinion, if the business you are about to get in is worth it, then there is nothing wrong in selling a property to start the business. But you must research about the business before starting. This is what I think your friend may not have done. He did not research the business enough before getting in. Know what your competitors are doing and how you can offer better services than them before getting in.
  7. Jack Benoit

    Jack Benoit Member

    Аmbitiоus еntrеprеnеurs whо tаkе оn thе сhаllеngе оf running thеir оwn businеssеs соuld еnd up sеlling thеir hоmе аnd mоving bасk in with thеir pаrеnts tо fund thеir stаrt-ups.

    Twеnty pеr сеnt оf smаll businеss оwnеrs rеspоnding tо а survеy by оffiсе suppliеs firm Viking sаid thаt thеy hаvе hаd tо sеll оr rеmоrtgаgе thеir hоmе in оrdеr tо gаin еnоugh саpitаl tо sеt up thеir соmpаny.
  8. ruener79

    ruener79 Member

    You definitely can sell your property to raise capital!

    But this really isn't a question on whether you can or cannot. What must be considered is whether it will be worth it. The answer is not as simple as you'd like. As everybody hinted business involves a lot of risk. If you are knowledgeable about the business you are planning to put up, then to me it's worth the risk to raise the capital by selling the property. If your business do well, then you can easily purchase another property. But if you're going into business because most people in your circle are getting into business, and you're not sure whether you'll succeed, then I'd say you'd better keep the property and let it appreciate (provided what you're holding on to is a performing asset).
  9. pwarbi

    pwarbi Member

    Well there's no issue that if you want to sell property and put that money into a business you can do, but a lots going to depend on what the property or land is, what it's worth, and also what the viability of the business you want to start?

    You have to make sure a business will work, before you start investing everything you've got in it.
  10. ReadmeByAmy

    ReadmeByAmy Member

    Nowadays it is very hard to predict if a certain business will make profits or not in the long run. And if it is your first time to engage in a business the risks is always there because you are a beginner and commiting mistakes is already a common thing that will happen. I think if you had many properties why not? You cannot be called an entrepreneur is you are not a risk taker.
    pwarbi likes this.
  11. pwarbi

    pwarbi Member

    While I do agree with you, I don't know if being an entrepreneur isn't more about taking calculated risks though.

    If it's just a piece of land that you sell then there's not much risk there but if it's something like selling or remortgaging the family home, then that's a risk than even the most bold entrepreneur isn't likely to take.
  12. Alaine

    Alaine Member

    I've seen some people make mistakes. Sell property to start a business > Business collapses and they find themselves in dire financial straits.

    The wiser thing to do as the old adage urges, is to never have all your eggs in one basket. This way even if your make no money from your business, you won't losing everything. If you are making some money from your property, it would be better to get a small loan which you can comfortably repay whether your business is successful or not.
  13. pwarbi

    pwarbi Member

    I do think your right, and if the property is your only asset then it's definitely not worth taking the risk.

    I know that the old saying is you have to speculate to accumulate but that's not the case if that speculation could cost you everything you've worked for and your home.
  14. puneeth8994

    puneeth8994 Member

    I wouldn't take a chance unless I'm sure that my business is gonna click and I'll earn well.
  15. pwarbi

    pwarbi Member

    It's certainly something that you wouldn't risk unless you have a certain amount of confidence that your business is going to work, and even then selling or taking out a loan with property as security is always going to be a last resort.
  16. T J Tutor

    T J Tutor Member

    If the project you are investing the money in has a better potential and is solid, of course.

    Well, like I said, it has to be a better opportunity or investment. You first talked about selling land, but then you spoke of your friend selling his home. I don't think it is ever a good idea to sell a home for a business opportunity.

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