Buy a Business with No Money? Can You Really Buy a Business if You're Broke? - David C. Barnett

[@maverickSTC]

As a business consultant, I've explained these concepts to my clients for forty years. You hit every point on the head. Well done. You're the first consultant I've reviewed that tells it like it REALLY IS.

[@DavidCBarnett]

Thanks Bob, I appreciate the positive feedback from someone with the experience to know. You've likely seen people try to pull these deals off.

[@amola285]

Sir I want to buy a companies and I can show them how it works

[@ginb1598]

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[@chinakainnocentmokwugwo8104]

Correct

[@tobithomas743]

Experience Speaks

[@kennethkenchen952]

I'm in Real Estate and I hate all the people who peddle get rich quick crap. Thanks so much for being honest while still showcasing where the opportunity actually is. Well done.

[@DavidCBarnett]

Thanks for watching. I'm glad you enjoyed it and I am also tired of 'get rick quick crap.' Be sure to join the mailing list so you don't miss any new videos. It's over at www.DavidCBarnettList.com Cheers

[@Jon-nyboy]

Loved this. No hype. Just real experience, this is what I am looking for!

[@DavidCBarnett]

Thanks

[@ancientenergy]

Wow holy shit this information is amazing, currently making 15k a month with my business with 20 percent profit margin, looking to expand.

[@thelimitlesslifetv8356]

What's your business ?

[@jasonamoscomedy]

This is the first video on this subject that was upfront and honest. The other content creators should take lessons from you.

[@DavidCBarnett]

That may ruin their sales results.

[@cmu593]

Hi David, really enjoying your videos! Well presented, informative. Appreciate you sharing your knowledge! I'm a Chartered Accountant in South Africa and currently learning about small business acquisitions.

[@DavidCBarnett]

Thanks for the kind words. I'm glad you're enjoying it. Gather some clients and friends, I'd love to come and address a group in SA in 2018. Reach out to me at [e-mail] if you're interested.

[@havefun3532]

Great video! What you talked about in the scenario where the owner handed over the business and walked away was EXACTLY my situation. I was broke, only $1,000.00 in the bank, no assets, didn't even own a car. I did an asset purchase of an insolvent business pulling $3M / year with with 14 employees, $0 down and I assumed 0 liabilities. Liquidated the assets, paid all the employees and closed up shop with about $80k in the bank. The owner was planning on filing bk and skipping town, leaving many creditors going after him. A few came my way, but the structure of the acquisition involved renaming the business and forming it as a subsidiary of another company. The biggest "creditor" that persisted was the broker whom was in with the owner on the whole deal, assisted him in cooking the books and is attempting to collect a broker fee of $126k for a business that was originally listed for $360k and the end cash across the table was $0. All in all, I filed my bk and now I'm ready to buy my next business. (hopefully not the same way) But yes, it can be done. All depends on the motivation of the seller.

[@DavidCBarnett]

Thank you for your comment. What you've shared highlights just how risky this can be. Business is a risky thing and I always recommend people have a foundation of financial strength when doing deals. Buying a business should never been seen as a 'hail Mary' maneuver to save a bad personal financial situation.

[@espoirelikia8956]

Hi, I would like to buy a business but plan to have a personal from bank. Anything you can recommend me under 30K? I really need help. Thanks.

[@davidgreer1263]

David has a ton of great information. His help in buying a business has been tremendous.

[@DavidCBarnett]

Thanks David!

[@stanleyrzepka3077]

Great job on this video. Although i believe what most others are teaching is how to buy a business without your own money, not actually zero money.

[@DavidCBarnett]

Nope. There are people saying you don’t even need good credit to pull it off.

[@kenttwashington]

Thank you for this content. Explained in a way that makes perfect sense to me.

[@DavidCBarnett]

Thanks Kent. There are more here: www.investlocalbook.com/p/buy-business-with-no-money.html

[@augustus28178]

No bullshit video. Excellent!!

[@DavidCBarnett]

Thanks Augusto

[@fightthepeople5454]

great video very honest. This guy just bankrupted all the false real estate scammers that tell you ( your broke self can buy property with little or no money) in the everyone can do it context. 🖒

[@DavidCBarnett]

Thanks! Business is risky and you need a solid financial foundation.

[@roberttammymaisey9397]

property is different as you cash out on equity like i did and money down was done with two investors, but different countries have different rules and regulations.

[@thedevilsadvocate3710]

Well done! Transparent and honest. Thank you!

[@DavidCBarnett]

Thanks MTC. Be sure to visit www.DavidCBarnett.com to sign up for my email list.

[@MrRevil3]

Look. I moved to California 10years ago. On my way home I saw the owner of my company getting hauled off in a patty wagon. Long story short. He was smuggling on the side got caught. I made contact with him while he was in jail. Got the trucks facility and manpower for bail and commissary. No money down, but the seller must be motivated. And yes its profitable but some seasonality though.

[@DavidCBarnett]

Wow, talk about the right level of motivation on the part of the seller!

[@jasonjammin8697]

Ha ha genius.

[@chipmarce4853]

That’s a great story!

[@onthemovemovingcompany1896]

I want to first just express my sincere gratitude to you. I am have been researching buying a business and have become susceptible to the false claims of the Business Buying Gurus. Thank G-d I have not bought any of their course but I have been tempted. What makes it so dangerous is that a lot of what they are saying is correct and I think you would agree with. The problem is the way they make people feel it is easy and quick. There is a Jewish saying ""Rabbi Yitzchak said: If a man tells you 'I didn't exert effort and achieved' - do not believe; 'I exerted effort and didn't found'; do not believe; 'I exerted effort and found' - believe."

[@DavidCBarnett]

You're welcome. I meet too many people who've fallen prey to these guys and it's always sad. Most of these people are acting out of desperation and can ill-afford the cost of these 'programs.'

[@lightshade3321]

Fantastic video in explaining buying existing businesses👍!

[@DavidCBarnett]

Thanks, glad you enjoyed it.

[@Scottysaan]

I understand you so well. Thank you for sharing your knowledge.

[@DavidCBarnett]

No problem Scott. I'm glad I was able to help.

[@CarlosVasquez-vf3kt]

Thank you for your honest points! on point

[@DavidCBarnett]

You are so welcome, thanks for watching and please remember to like and subscribe so that KZbin knows the video is good.

[@younglion4945]

Wow, very insightful! Thank you!

[@DavidCBarnett]

Thanks, please send in any questions as this is how I generate the material for this channel. If you want to learn more about buying a business, visit www.BusinessBuyerAdvantage.com

[@andres711]

David this was very useful content. You opened my eyes to the risks and what pieces of the books to look at to understand what I am buying.

[@DavidCBarnett]

Thanks Andy. You should take the course over at www.BusinessBuyerAdvantage.com if you're going to buy a business. It's a tiny investment vs. what is normally at risk in these transactions.

[@EGlobalTrading]

Thank you for this video.

[@DavidCBarnett]

No problem Josef. Glad to help.

[@maxr8392]

This Guys dropping knowledge nice vid.

[@DavidCBarnett]

Thanks for encouragement! Don't forget to go to www.DavidCBarnett.com and sign up for the email list to see new videos first. Cheers.

[@andrewjenery1783]

So, approach a business with negative equity because there's higher probability that the owner will finance the seller? Makes sense, glad I watched this!

[@DavidCBarnett]

All small business sales should have some component of seller financing to protect the buyer. Whether the seller will do it or not depends on the relationship between the buyer and seller and the level of trust. Businesses with negative equity usually have operational problems. You don't want to buy a 'turnaround' story necessarily.

[@andrewjenery1783]

@@DavidCBarnett I agree, but isn't that why owners of negative equity businesses want to sell in the first place and wouldn't those with positive equity be less likely to offer seller financing? I was thinking if you could find a way of say cutting costs for a negative equity company, then that in itself would increase profits.

[@DavidCBarnett]

Baby steps. If there is negative equity you’re talking about an insolvent entity. They owe more than their assets are worth. A deal may involve a trustee. Or, you’re willing to dig out of someone else’s hole.

[@andrewjenery1783]

@@DavidCBarnett I did say 'If you could find a way of cutting costs ..., then that would increase profits'. If I couldn't, then no, I wouldn't buy into it.

[@DavidCBarnett]

Ha! I failed to expand your comment while reading on my phone.

[@victor7530]

Thank you for the information!

[@DavidCBarnett]

No problem Victor. I'm happy to help

[@beanabong2896]

This was extremely helpful, thanks.

[@DavidCBarnett]

Great! please like and share.

[@samuelroselli138]

Thank you!

[@DavidCBarnett]

No problem Sam.

[@chipmarce4853]

Great video David. Thanks for providing more info on this. Just awesome content and it needs more love. 👍👍

[@DavidCBarnett]

Much appreciated Chip!

[@kayoo99]

maybe the concept also refers to funding which is "not your own money" and focuses on how to use other peoples money , funding from the banks, other ways of raising capital.

[@DavidCBarnett]

Hi Kayode, watch the start. This video is about broke people. Many wealthy people and businesses can buy a business with borrowed money because of other assets they own. Equity financing (partners) is something entirely different and I have a whole playlist on that.

[@feelewis9298]

Good information.

[@DavidCBarnett]

Thanks Fee! Pls like and sub so the algorithm knows it’s a good video.

[@jjfade2391]

David or anyone else on this thread what do you guys think the best small business to by now is? I been looking for a while still not sure if I should worry about the numbers more then what I like to do or worry about my passions first. Been in real estate for years but this would be my first business purchase , very stressful lol. Thanks all

[@DavidCBarnett]

Buy a business in an industry you understand. The best deals are in buying a business that is profitable but has problems you understand how to address. As such, it's an individual and subjective exercise.

[@mbaguy627]

Excellent content. You have a new subscriber.

[@DavidCBarnett]

Welcome aboard!

[@avikillozmusic]

Awesome VID🤗🤗🤩🤩🤩🤩🤩

[@DavidCBarnett]

Thanks Avi, glad you enjoyed this.

[@dreydimarcelaherrera8360]

Good video!!

[@DavidCBarnett]

Thanks Dreydi

[@filmaker256]

You did good explaining but I'm sure if you obtain a business with no money or not, you would have licensing cost taxes possibly capital gains. And many other things the "get rich gurus " never mention

[@DavidCBarnett]

Great observations. I've met people who've done incredible things to try and do a deal with 'no money' only to end up in a really desperate spot when the reality of trying to run a highly leveraged business hits them.. Usually in the next fiscal year when they learn that debt repayment is not an expense and they owe income taxes on all the profits they made but never saw. Buyers need to have a comfortable debt service coverage ratio because there are always expenses that are unforseen.

[@sexymonkey4979]

I need more assets 😭 seems like my "assets" are really liabilities

[@lucbauer]

What do you think about Dan Peña's QLA methodology? Have you ever tried it?

[@DavidCBarnett]

Honestly, I had to look up what QLA stood for. Looks like a personal development program? People have told me he's well known for teaching a platform/rollup method for mid-market companies. This is something that PIGs and PEGs try to execute. I know someone who's attending his workshop soon and I'm curious to hear about it.

[@RomilCPatel]

@@DavidCBarnett When it comes to business he uses a roll-up strategy with LBOs.

[@hxkdneuxbxjdidndnxj]

why would I listen to someone credible giving sensible advice when I have Dan Peña 😅 Thanks! I wish this video had more views so I’d discover it 1.5 years ago! Thanks to Tom Nash for sending me here

[@DavidCBarnett]

Just keep sharing... we'll get there.

[@ethanchabert]

Great videos!

[@DavidCBarnett]

Thanks Ethan

[@AdaptedStudios]

Great video! What if I’m wanting to buy a profitable sound business from a retiring owner, but I am in my early 20s with little to no cash or assets - can I show the profitability of this company to a bank and acquire a loan to pay a deposit to the sellers?

[@DavidCBarnett]

You can't borrow all the money. The bank wants to see you have some 'skin in the game.' Stack cash and gain experience. Learn how to run a business by being paid to run someone else's. Time is on your side at this stage of life.

[@AdaptedStudios]

@@DavidCBarnett Thanks for the response. Let’s say I have £20k saved up in cash and I am willing to use this as a deposit, and the business is worth £200k. If I can get a seller note of £130k, would the bank loan me the remaining £50k to cover the money down?

[@marques10010]

Wow this man said connive as if buying a business using someone else's money is bad LOL. You just have to get creative that's all.

[@DavidCBarnett]

Just make sure your creativity leads to a sustainable and successful business the day after you buy it.

[@wbrownati]

Typical business broker stuff. if this were true, leveraged buyouts wouldnt ever take place. if youre buying a business with lots of equipment and recievables, real estate etc... to leverage, its easy to buy without any of your own money down. You just have to have a little bit of brains, and not listen to business brokers who cant structure a deal where you dont put all cash down at closing.

[@DavidCBarnett]

Thanks Wayne. I'll do up an LBO video shortly.

[@DavidCBarnett]

Here's the video on LBOs... kzbin.info/www/bejne/i6OlfYKqh75jhas

[@AceHardy]

🙏

[@DavidCBarnett]

Cheers Ace.

[@salnooristani9850]

Learned a lot of new things. thank you!!! do you offer class or webinar to teach someone new to the BR world? Your thoughts on Dan Pena.

[@DavidCBarnett]

To learn how to buy a business, go to www.BusinessBuyerAdvantage.com to sign up for my program. I'm not an expert on Dan Pena but if you liked this video, check out this page: www.investlocalbook.com/p/buy-business-with-no-money.html Cheers

[@mkhayami]

Thanks for your video it was very informative , I have a question which I don't know if here is a suitable place to ask or not, the question is that, does it worth buying a laundromat these days?

[@DavidCBarnett]

Sure, if it makes money and there is no reason to believe that the market is declining for the service. Everyone needs clean clothes somehow. Take the online course at www.BusinessBuyerAdvantage.com to learn how to analyze this deal or contact me at www.clarity.fm/davidbarnett if you'd like to discuss the specific case over 15-20 minutes. Cheers.

[@tubewatcher38]

Do leveraged buyouts / 100% financing not work at all for small (or mid-sized) businesses then?

[@DavidCBarnett]

They do, but as you'll see in later videos it requires equity or cash elsewhere. The video is in response to the 'buy a business with no money even if you're broke' crap all over the internet.

[@kakerake6018]

I'm trying to buy a business I think it has huge potential but is being very mismanaged and is failed I have a skilled team of programmers,designers and an accountant I believe I can turn it around ( I mostly want their software lol)

[@DavidCBarnett]

I'd love to help you tackle this one Haley. You can reach me for quick conversations at www.clarity.fm/davidbarnett

[@kakerake6018]

David Barnett wow thank you!!😀😀

[@steveninverse9579]

Hey David. Is it possible to buy businesses, build a team to buy them and do business with banks despite having a criminal record? Specifically identity theft? Was in a bad place in life many moons ago and did some dumb stuff, turned things around for myself a long time ago but these things still hold me back on paper(long story short) Thanks in advance.

[@DavidCBarnett]

Every bank I’ve ever dealt with has done credit checks. I’ve never had a banker do a criminal check to my knowledge. But many banks require insurance and I know that for bonds, etc this can have an impact. How is your credit score? Have you been denied credit because of your record?

[@steveninverse9579]

@@DavidCBarnett My credit score is very low, I just recently began building it up by paying off my debts. I don't have many debts I just have never opened a line of credit and never been denied credit due to my record, I've been denied but only due to my low score. I myself don't know any bank procedures and what their guidelines are for rejecting commercial business loans and whether they would based on one parties record. Where are you based out of? Also, thank for answering. It's seriously appreciated.

[@jeremyalvarado2523]

David, such a great video. But something came to mind about buying a business. Will this process work for someone selling an internet business? I have been looking to purchase an online business and was wondering how that would work with no tangible assets...

[@DavidCBarnett]

This video is really not about buying businesses with no tangible assets. Yes, you can sell an internet business. No, the bank will likely not finance a buyer. Check out this video on valuing online businesses: kzbin.info/www/bejne/ZmWydI14mNuJrdU

[@tomjens2046]

Your first whiteboard example: 8:00 where you claim that instead of selling a business you could rather liquidate the company yourself. Wrong. Business value is often MUCH higher than assets - liabilities. Why would you liquidate the company and end up with X if you can sell (even seller financing) and end up with 3X, 10X, 50X etc.

[@DavidCBarnett]

A bird in the hand is worth two in the bush. Handing a business over to a broke person is no guarantee that the note will ever be paid. Watch it again and imagine the perspective of a business owner.

[@tomjens2046]

@@DavidCBarnett I understand that. I merely say that you made it sound as if business sale value is somewhat similar to liquidation value. It is often 10 or 100 times higher than that. Just this isolated point. I agree with everything else.

[@DavidCBarnett]

Not in the cases that these gurus teach. They specifically tell you to seek high-asset companies so you can borrow against these things. It’s why certain machinery based companies will often go to auction instead of selling. Their equipment is worth more than the value of the cash flow the business generates. I’ve seen this lots.

[@ozanz7649]

Sir can you pls do a Video about Mr Dan Penas QLA Methode. What the risks are etc.?! Great Video anyway

[@DavidCBarnett]

Hi, you're not the first person to ask about this. I'm not that familiar with his system other than it's about relationships, mindset and actively building a network of relationships designed to be leveraged. They all sound like great ideas to me. The overall idea is to buy a platform company and do an industry rollup which is a common mid-market strategy among private equity groups. I know one person who attended the Castle Seminar and I'm keeping in touch with him to see how he progresses. What I've learned so far is that the guy is working full time since March on hunting for his deals and is building the best team he can to help him. Whether he succeeds or quits, I'll try to get an interview with him but it will likely be a year away or more.

[@trecooper122]

Hey Dave, but what if the owner of the business is a bad owner and that’s the reason the business is tanking. Would it still be a bad idea to take on the debit and easily fix all the lazy and bad mistakes the owner was doing?

[@DavidCBarnett]

Perhaps if you were an expert in that industry and had a lot of management experience already. I know someone who does this with restaurants. New people with no experience can rarely make something like that work. Here's a really old video I made about turn arounds kzbin.info/www/bejne/eoGpk4erocyKbsk Maybe it's time to revisit this topic.

[@CS-Jnr]

What do you think about Qla acquisition system

[@DavidCBarnett]

I amde a video about it: kzbin.info/www/bejne/pHPSf5aiicxmpKc

[@swiftaudi]

I've watched two of your videos and I've realized what I already know, I need to work on myself. What is the best way to save money so that it earns to most intrest, thus getting to my goal faster.

[@DavidCBarnett]

There's a difference between investing and saving. You need to save. I'd look for a high-interest savings account at a bank that is a pain to get money out of so you're not tempted to spend it. I googled 'high interest savings accounts' and got all kinds of results. Really, it's more about how much you deposit than what the interest rate is because they're so low these days.

[@hakhinton8019]

question..... if you have an investment property that isnt paid off... can I still use that as collateral for a buying a business? is that possible? please answer....

[@DavidCBarnett]

Hi Hak, depends on who the lender is and how much equity is in the investment property. Ultimately, it's the lender who decides if the collateral is good. So if the lender is a bank, their criteria could be very strict. If the lender is a business seller who wouldn't mind one day owning such a property... the collateral could be fine.

[@hakhinton8019]

@@DavidCBarnett thank you for replying back. i sent a email to you in regards to your services. Im looking to buy an existing business, a liquor store to be exact.

[@DavidCBarnett]

I saw it and replied. Looking forward to working with you.

[@mansoorgroupltd679]

How to convince sellers to sell for us for export in instalments. Repayment upon arrival and clearing and delivery. We have buyers but cannot pay in advance while goods are away.

[@DavidCBarnett]

You're describing an un-dercapitalized supply chain. Search for supply chain financing and see what the options are. If you're shipping to the developing world, they may be limited.

[@devinbeverage1888]

This is positively awesome. Thank you so much.

[@DavidCBarnett]

No problem Devin, thanks for watching. Please Share if you found it useful.

[@prestoncook7330]

If a seller did seller financing instead of getting it all at once wouldn't they also pay less in taxes overall?

[@DavidCBarnett]

Depends on where you are. Oftentimes sellers can create 'capital reserve' situations with the help of their CPA and at the very least drag the tax liabilities out over the collection period of the note. If it's a pass-through entity, this may lead to the money being received when the marginal tax bracket is lower. This kind of question is always best to be posed to a local accountant.

[@sirnicholas6626]

So I can use my home and the equity in it as collateral for a business loan instead of a down payment or without refinancing and using the equity taken out as the payment?

[@DavidCBarnett]

Hmm, that questions is a bit confusing to me. Many people will remortgage or do a HELOC on their house in order to get money for the down-payment on a business. Some banks would take the equity as security for a business acquisition loan. Depends where you are and the loan program you're using.

[@victorpradaa8245]

Nicholas O'Connor that is what RAY Kroc did to star creating franchises of Macdonald

[@geno816]

I was kinda hoping I could buy a business with no money down. Lol

[@pipesmokingHeathen]

Look up Dan Pena

[@DavidCBarnett]

You can. No money down doesn't always mean you can do it with no money available. I give several examples in the beginning of the video of deals I've done with no money down from the buyer.

[@RonnyW]

David - amazing video! Question: what if I am looking to purchase a assets of a business with 80K equipment liabilities, I want to put down 80K as working capital in a new entity to turn the business around (not pay down the debt). The current business owner is stuck with the 80K equipment debt but will have equity in the new entity with a horizon of actually making money. Is this customary? Thanks!

[@DavidCBarnett]

That would be a creative deal in his mind. 'Customary' to most people is selling something and getting paid for it. Assuming those liabilities is a way that the deal can get done but he may have personal guarantees and be cautious of this kind of deal. If this is something you want to discuss further, hit me up at www.clarity.fm/davidbarnett I'd need to ask you more questions before recommending a strategy.

[@noneofyourbusiness792]

There is a strategy from a broke man to buy a business with no money. But you must find the right deal. You need a motivated seller. You need a commercial bank loan. You can look into grants, SBA backed business loans. Seller financing is the real key. You don’t ask for 100 percent seller financing. You ask for 20 or 30 percent. The right deal will have cashflow to pay the seller if the seller believes in their own cashflow. Banks will give you a loan as long as you do two things. You leverage the assets of the business and you leverage the cashflow. You just made sure the banks got the two payment methods. You got your primary payment in cashflow. If the business tanks the bank can get their money back by selling off the assets. You need to know how banks work. Secured loans and unsecured loans. You also need to know that you can over finance. You can get an even bigger loan as long as the cashflow and assets and your down payment supports this. You use the financing from the seller as a down payment.

[@DavidCBarnett]

This strategy used to work at one time but the problem today is that the bank wants to see a minimum debt to equity ratio either on the businesses balance sheet or with your own net worth in other assets. The bank will not lend you 100% of the value of the business assets. Finding 'motivated sellers' is not the key to pulling this off. Only motivated sellers even consider selling a business as the multiples are so unattractively low for sellers that without motivation, they'd never do any deal.

[@noneofyourbusiness792]

David Barnett the debt to equity ratio isn’t a problem. It’s a challenge that can be overcome. The sellers you are describing are not motivated enough. A true motivated seller is looking to leave the business in the right hands of a person that will continue the business even after the seller passes on. Some sellers are forced to close their business due to illness or due to retirement. In those cases they don’t want to close their business down on employees who they value and know for many years. But no offer is on the table at all. They’ll have to close the business down and all they get is selling off the assets. You present them a better offer and the idea that they could profit more from a deal and their business still continues on even after they pass away. The debt to equity ratio can be met. You can can get the services of a lawyer and an accountant to help in these matters of analyzing the business. This is why you over finance in the first place. You can also give them free equity of the business too. There is more than one way to skin a cat. I seen what deals are out there but you can’t just look up the US for deals. You have a whole world of banks out there and a whole world of businesses out there. Not all banks are the same. Not all bank policies are the same. Not all businesses are the same as far assets and liability of the business, revenues, cashflow and owners. There is a way to buy a business with no money. But it’s up to you to find the right deal. It’s hard but not impossible and hard is better than impossible. A teenager became a billionaire by 21 through acquiring businesses. A teenager... let that sink in to everyone that’s reading. A teenager purchased several million dollar businesses with zero money of his own. A series of transactions with the banks and met the debt to equity ratio on each business. The cashflow becomes your personal guarantee. The assets become your personal guarantee. They just have to meet the requirements otherwise no deal.

[@DavidCBarnett]

@@noneofyourbusiness792 Hmm, I feel like I've read a lot of your words before somewhere else. How many of these deals have you done yourself so far?

[@pablomuzzobar8940]

@@DavidCBarnett that's none of your business 😄🤫

[@CG_VON]

If the business is insolvent, could you turn the business around to come out of being insolvent?

[@DavidCBarnett]

You could. Normally when businesses become insolvent its because they're losing money on operations. You have to make them profitable again AND make sure any debt is affordable from a cash-flow perspective. I know several people who fixed businesses and made them profitable but still ended up bankrupt because the debt service demands were draining all the cash. Loan payment principal is not an expense, only the interest is. You can be making money and still go broke. Usually when a business is in this situation, they seek help from a trustee and use a bankruptcy or proposal solution to restructure the debts.... some people try to sell the business.

[@CG_VON]

@@DavidCBarnett Thank you and great videos

[@sheltzshelton1454]

Why couldn't you use commercial debt as well!? Instead of your own Equity?

[@DavidCBarnett]

Because banks want to see a debt to equity ratio that meets their loan requirements. You need to have a reason to fight to succeed. Something to lose.

[@victornyamu2547]

@@DavidCBarnett if i buy a deal at 3x ebitda and finance the 30% down payment like this, half commercial debt, half sellers finance, the DSCR requirments will be met isn't it?

[@DavidCBarnett]

Seller financing is debt, not equity. It falls on the wrong side of the debt:equity ratio unless the seller is willing to be totally sidelined by the bank like a postponement until the bank note is paid up. In your example, it’s 100% debt with no equity. The only way this deal gets done is if you have other assets outside the deal for the bank to consider as equity like a strong balance sheet in an acquiring business or a piece of property or something to put up as collateral. Banks manage risk by requiring a minimum debt:equity ratio on the opening balance sheet.

[@victornyamu2547]

@@DavidCBarnett the seller's equity is delayed until the note is paid off. Its only 10%. Also I am refering to using cashflow lenders not asset based lenders. E.g, business doing $1m EBITDA, buy for 3x, $3million. Cashflow lender puts up $2.1 million at 5% = 105k annually Bridge loan to bring cash at closing will be $300k @10% = 30k annually. The seller's note will be delayed. DSCR = $1million/350k =300% My friend, I think you can pull more money out if the bank lends at say 2.5x for the industry i.e you get another $400k for working capital. What are your thoughts please?

[@capitalestateking]

David, do you know if it's possible or how to buy a business that's incorporated and all of the executives are deceased?

[@DavidCBarnett]

Wow! That's a first for me. If the executives are deceased then the board would have to appoint new ones. If they're the same people, then you need to find out who inherited the shares. A local attorney would be able to map this out for you.

[@capitalestateking]

@@DavidCBarnett LOL!! I get that a lot. It's NOT quite that simple. Is this something we can discuss? I'd be interested in retaining your services if you can bring value to the matter.

[@DavidCBarnett]

Where are you located?

[@capitalestateking]

@@DavidCBarnett OK...how about you?

[@onelifetime5874]

I m looking forward to buy motels having between 40-60 room. I m really intrested into it. I bow down with you, can you please give me a tips to own a bussiness. I m kindly anxious for help.

[@j.r.1426]

Did you purchase your hotel yet

[@chanhyun4412]

No money down comes from leveraging the debt from lender instead of seller.😒😒😒😒 You want to purchase a profitable business. It's always the people who have never done it who have the most to negative advice.

[@vykintasjocys6401]

well assetss will go to 0 soon covid, and you will pay 5 times revenue way better then pure liquidation

[@DavidCBarnett]

Depends on whether the seller ever collects that money. Covid is certainly causing a lot of grief this year.

[@vykintasjocys6401]

@@DavidCBarnett Yes they will, majority of businesses don't even have social media marketing and optimal management

[@jaimel2037]

So we don’t need to pay Dan Pena 20k Sterling to learn this???

[@DavidCBarnett]

No, maybe use the funds as a down-payment on a house or something.

[@youngatnaruto]

You aint a real man if you do not pay me 20k. Is what Dan Pens would say

[@hishamelkot6886]

how many businesses do you own?

[@DavidCBarnett]

One. I've had many over the years that I've bought and started. I've sold and closed businesses. I've worked on hundreds of acquisition and sale deals. My history is here: www.investlocalbook.com/p/all-about-david.html

[@dawnyaj2197]

How do you find business for sale?

[@DavidCBarnett]

Several ways. The easiest is via business selling websites (there are many) or from business brokers. However, the best deals are often had when you find businesses before they go on the market. This is one of the things I teach in my Business Buyer Adventure program. Learn more at www.BusinessBuyerAdvantage.com

[@luxurybuzz3681]

Bizbuysell.com

[@wreckdproject]

Great video. What are your thoughts on QLA?

[@DavidCBarnett]

I've not studied it or spent much time on Dan's videos. It seems like a mindset program to me. I'd love to meet someone who's gone through it and successfully done a deal and interview them on my channel.

[@kentheengineer592]

Bruh fr people r just so dumb its so obvious on the ways to buy a business with no money depending on the context of that phrase i can approach this differently

[@DavidCBarnett]

I've never said you can't buy a business with no money. I've just said it's nearly impossible for a broke person to pull off. Visit this page for all the 'no money' content... www.investlocalbook.com/p/buy-business-with-no-money.html

[@TheSamosaCritic]

Before watching this video, let me say, no. No, you can't buy a business with no money.

[@DavidCBarnett]

Well, what did you think?

[@pablomuzzobar8940]

@@DavidCBarnett I will buy it with faith

[@devlinfrancis-howard9162]

Lol, just "save money" he says...

[@DavidCBarnett]

If you can't demonstrate that you can operate a household profitably, how do you expect any lender to believe that you can run a business?

[@hqrlock]

@@DavidCBarnett Hi David, your point makes sense in theory. The thing is, you can run a household profitably while working for minimum wage. But the surplus generated will be nowhere near what you need to finance a deal. You will not generate hundreds of thousands by "saving".

[@forsakengospelministry3570]

This is why you won't get rich EVER! your giving half ass information. Conventional wisdom is why people don't grow wealthy.

[@DavidCBarnett]

Please post your net-worth statement so we can all see that you're an expert on wealth creation.

[@forsakengospelministry3570]

@@DavidCBarnett my net worth has nothing to do about you being full of shit and scared to think outside the box. I've rolled three deals this year alone with no money. Your telling people to lower their expectations because your to big of a chicken shit to pull the damn trigger or your just ignorant.

[@DavidCBarnett]

If you watch the video, I say that this is for a person 'with no money.' If you're already in business it's not the same. I say in the video that I've worked on lots of no money deals for people who already had businesses and assets.

[@DavidCBarnett]

Have you watched the whole playlist of 'no money' videos?

[@jasonjammin8697]

You don't understand his business structure.He gives some free info and then sells his product to you if you want more.which I respect.There many other people doing this.You want to be a better Christian ? Stop trolling the internet spreading negative vibes.

[@RobertSmith-go9hh]

Nobody cares about ur reason/backstory for a vid , just get into it

[@DavidCBarnett]

Behave yourself Robert or I’ll ban you from the channel. No need to be rude. I have feelings, you know. 😉

[@phamman88]

Russian oligarchs did it

[@DavidCBarnett]

Yes, 'controlling productive assets while there is a political upheaval and take them for yourself' is a business strategy which very few people are able to execute consistently. Ha Ha.

[@danamcwhite]

So this is click bait

[@DavidCBarnett]

Sorry, I have no idea what you mean. The title asks the question about buying a business with no money and I do my best to discuss. You may wish to follow up on the other videos in this topic line: kzbin.info/www/bejne/rovUe4eXlL6NoJY kzbin.info/www/bejne/i6OlfYKqh75jhas kzbin.info/www/bejne/joeclHuKq89jmqM Cheers

[@danamcwhite]

David Barnett there’s a lot wrong with this video. I have purchased business with no money personal money or personal guarantee. Loans, credit cards, turning credit into cash, etc. but there are errors in this video and I stand by it being Click bait

[@DavidCBarnett]

That's great. I'd love to have a video chat with you so you can tell my viewers all about your deal. Just pop me an email at [e-mail] and we'll set something up.

[@jasonjammin8697]

@@danamcwhite what kind of business you buy ? You had collateral ? You have good credit ? I'm curious

[@danamcwhite]

Jason Murphy I’m in the fire prevention business. Service side of things. Fire alarms, fire sprinklers, extinguishers, all Testing and repairs. Recession proof industry. Excellent credit is key. Atleast. 700. I was talking to a loan agent today. And they can structure a loan on a business incoming invoices. With zero down. The trick is to get a great business loan company. There are tons of ways to get loans with no money. You have to have good credit. You can with weak credit but your amount isn’t going to be high. My first business I bought for 1.5m. I was approved for 500k with 580 score. I used that has a down payment and owner financed the rest. Once I bought that I got a new business loan on the new company for Triple to buy my next company. Right now I’m looking to purchase 3 more. If anybody tells you no Personal guarantee they are lying. I went to every loan company in the world. PG is gonna happen for your first loan after that than no more PG

[@marques10010]

Lies!!!

[@DavidCBarnett]

😘 I don’t lie. I just tell what I’ve seen and done.

[@nathanacosta5508]

You guy talk to much get to the point wasting my time

[@DavidCBarnett]

...and being a troll is not a waste of time?

[@jasonjammin8697]

Nathan.Your lack of patience shows you would suck as business.