How far should I go with financing? [Seattle, WA]
I need some advice regarding commercial properties in Seattle. I'm  hoping to open a Montessori school mid-next year, but I'm just not finding enough properties that meet our needs. I'm looking in North Seattle, Edmonds, Shoreline ... mostly north King County, and my agent has been able to find 1 home in Queen Anne that used to be a day care, but they only want to sell, and 1 standalone in Shoreline that needs $325k+ in renovations.

I've been going back and forth with him and he thinks we should consider just buying, instead of trying to lease. Honestly, the state of leased buildings in the area is pretty sad. A lot of buildings are run down and the owners don't want to put their own money into renovating. I'm willing to help make upgrades, but I feel like $325k+ is a lot ... and risky.

This is my first small business, and I'm confident I can run it well -- I've been in the industry for a long time, and I know how a Montessori school should be managed. I would like to be able to do this for a long time as well -- is it worth it for me to invest the money, even if it's A LOT of money? There's another property I'm looking at, and it's gorgeous. Already an established preschool, and they're sitting on .6 acres of nature. Again, the owners want to sell, and I'm debating if I should just do it. I would take out a home equity loan to make the down payment and get the school set-up, but it would be a pretty hefty loan -- probably around $500k. It's a risk to me, and I'm just not certain if it's worth it. But on the other hand, I wonder if I'm missing out on a great opportunity for this school.

Any advice? Suggestions? Should I wait a couple more months for that "right" location?
[{"id": "da6ff8e", "text": "If you buy a property, and your Montessori business fails, how quickly could you put a tenant in your property, and would you be able to collect enough rent to cover the monthly loan payments?", "replies": [{"id": "da6h53n", "text": "That's something that I've asked myself too -- and by how this house is currently selling, I doubt I could get a tenant into that building if my school fails. The first house (in Queen Anne) that I was looking at is still on the market, one month on. Which is what's sending up red flags for me -- just seems too risky.", "replies": [], "depth": 2}], "depth": 1}, {"id": "da6ou9l", "text": "Why not an SBA loan instead of a home equity line of credit?", "replies": [{"id": "da6owav", "text": "I've heard there are limits as to how much you can get from SBA, and it's difficult if you're a start up. Please correct me if I'm mistaken! ", "replies": [{"id": "da6s1u7", "text": "You're mistaken.  Talk to a SCORE counselor (google that).  You just need a business plan and a down payment.", "replies": [{"id": "da7lwx3", "text": "Thank you! I will reach out to SCORE.", "replies": [{"id": "da9kxj9", "text": "there are sometimes restrictions on startups - it's a bank policy thing and not something dictated by the SBA. If it comes time to do the deal and you are getting turned away for being a startup, you might just have to keep reaching out until someone bites. ", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "da6zs45", "text": "There is no question the the market has made a turn to the downside. If you can hold off the purchase, you should.  The spreads on CMBS have blown out in addition to the 10yr so the only thing standing in the way of good deals is seller capitulation.", "replies": [], "depth": 1}, {"id": "daaekkq", "text": "Well of course your broker wants you to buy rather than lease, that's a much larger commission for him/her. \n\nMost business lease, even the big ones. Why? They would rather take that capital and invest it into their core business, aka what they're good at. They're not real estate companies and they don't want to make large investments in it. \n\nYou should be the same way, most of your capital should be invested into developing the school. Keep searching for a place to lease. Mind you, you will also not be the best tenant. A new business in a small field, you're definitely the opposite of a \"Credit tenant\", so you may have to compensate with slightly higher rents", "replies": [{"id": "daaezxj", "text": "That's what I was afraid of. I wanted to give him the benefit of the doubt, but it would be a huge mistake on my part to invest too much into this school before it's even started. Thanks for the advice.", "replies": [], "depth": 2}], "depth": 1}]