If I plan to be in the market to purchase a business in 3-5 years, what do I need to do financially to be prep

I am looking at the 3-5 year time frame of starting a serious search for a manufacturing business to buy. My biggest obstacle will be the financing of the purchase. My largest pool of net worth is in a few rental properties that I own. Should I focus the next few years on accumulating cash or paying down the mortgages?

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No User Photo Don Barrick
The BAF Group LLC

The largest number of business failures in the US, are a result of a lack of capital. I would say one of the best things you can do is to put as much cash away as humanly possible. You would want to use a part of that for a down payment, and keep the rest in reserve for keeping the business afloat during the first several months. Then keep a large amount down the road, for meeting the needs you might have when seasonal or other sluggish periods occur. Paying down the mortgages is great if you want to borrow against them. But if you have the cash in hand, why borrow and pay out interest, if you can avoid it?

Nov 5, 2015