Buying Businesses With Equity

Shauna Anderson is using real estate to create multiple streams of income

value of $500,000. She intends to spend $50,000 renovating the building, which will house a restaurant she plans to open.

The appreciation of her real estate has made it easier for Anderson to build two businesses. She left the IRS in 1986 to launch her first venture, SRA Business Services, a tax and accounting business. “I knew the business of accounting and taxes, and by working with clients, I learned the kinds of mistakes other companies make.”

Anderson took on a number of construction firms as clients, a move that made making repairs on her properties easier. Last year SRA earned about $80,000. But now Anderson’s main business is The Chitlin Market (www.chitlinmarket.com), which provides cleaned chitterlings nationwide over the Internet. The business, which opened in 1995, posted about $250,000 in revenues last year. “I thought it would be a little, part-time business selling meat, but it’s turned out to be much larger than I expected,” says Anderson.

It was Anderson’s involvement in real estate that has allowed her to become an entrepreneur with multiple streams of income, increasing her overall wealth.

To duplicate her strategy, Anderson offers three pieces of solid advice:

  • Stay vested in real estate. Anderson leveraged the equity in her home to develop her other businesses. She saves on overhead costs by owning her properties, which enriches her businesses. Once you profit from a property, use that money to buy other properties.
  • Get a good accountant. There can be no shortcuts here. Anderson could keep track of her own personal or business expenses because of her background with the IRS. It is important to know where you are financially to avoid surprises down the road.
  • Take business or financial courses. Managing multiple properties is a business. There are always courses you can take to learn more about managing your finances. Look into it.
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