New Bar on South St. question about funding and feasability

[rugbyprop501]

Yes, I am young and inexperienced, however, before you rip me a new one, I do have many friends that work in various stages of nightclubs and bars and will have them helping me. Also, I have a business plan, a very specific location, and the drive to get this done. I don't have much experience myself, or much money. The money is my biggest problem, I have worked in real estate, construction, and currently work for an (mostly) environmental engineering consulting firm. My friends/partners have worked in energy, software, hospitality, and have worked in bars, restaurants, and after hours night clubs among many others. I don't have highly accurate estimates for some parts of my business plan, but for building, land and renovations I have good estimates based on my designs and requirements. I understand it is a high risk business, and as such, banks (especially in the current economy) are very wary investors in it, especially since my monetary contribution is almost nothing.

Part of my plan diverges for different situations/presentations, my ideal situation includes real estate, which having worked in commercial real estate seems like the best option for getting a larger loan from a bank. If they have the real estate as collateral then that is a better option for them. however, I don't have the credit or cash to put the down payment on the mortgage. Now I am not asking here for funding, but I would like to know if and where it would be possible to get the funding for a project like this. I know that I have a winning strategy and plan, and I know that I can present it very well, but without bank loans, and since VC's mainly go for the tech and real estate industries, I am coming up blank.

I was thinking that a VC interested in real estate could buy the property as their "investment" for a percentage of the profits. Is that something that anybody might know about here?

And if you plan on just telling me that I should go back to what I'm good at, or stay out of the industry, shut up and don't say anything, I am looking for real replies, with advice, or even someone explaining what I need that I don't have.

[BostonDave]

I wish you luck man. We are also young and are in the process of purchasing commercial RE and opening a bar in that building. It hasn't been easy at all. Banks and lenders here want at least 20-25% down for any type of commercial property and will also want to see a good credit score. We have considered SBA backed loans (small biz admin) where banks will work with them to finance you and the sba backs up a % of the loan. Still though there are fees and money required upfront. They will still want money from you though. I would recommend writing up your business plan as best as possible and trying to get a partner(s) involved. Maybe managers of other local establishments that have the desire to work for themselves? Definitely not gonna find 100% financing from banks or credit unions but you have the right idea being creative with real-estate. Keep thinking and dont rush into anything too quick - if you can work for a little bit more and really try to save as much as possible you can make it happen. Also try to build your credit up as much as possible in the meantime.

Heres a pretty good guide on getting started with RE:
http://www.thecitruscountyclassifieds.com/downloads/2/fsbo-ebook.pdf

[ca. club owner]

Rugby... hey I just posted a lil advice on how to get a VC companies attention on here for Jack.. I tell you what, PM me your info an i will get a hold of you an see what you have going on. I take special interest in things that go on in philly... I travel there a great deal..