We partner with business owners to help them achieve property ownership for their businesses; reduce operating costs and increase their bottom line.
Through the partnership, we assist and educate business owners on all the steps of acquiring and managing commercial real estate so they can successfully build long-term wealth.
CONTROL
We allow business owners to take control over their own property, limit approvals required for changes, and improvements, and enjoy peace of mind and security over the long term.
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Business owners acquire joint and direct ownership of the property, build equity from day one, pay rent to themselves, and grow their long-term wealth instead of their landlords.
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Take control of your business and financial future.
NO DOWN PAYMENT OR CLOSING COSTS REQUIRED
25%-35% down payments for commercial properties can be overwhelming, most businesses opt for leasing to preserve cash for operating costs, inventory, and expansion plans.
R2 Capital will cover all due-diligence costs. ($10k-$35k)
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R2 Capital is responsible for all loan origination and lenders fees; these fees are typically 1%-2% of the total loan paid upfront.
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R2 Capital has the balance sheet to qualify and if necessary provide personal guarantees for the commercial loan.
CASE STUDY
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lEASE
1-year
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Rent payments: -$73,093 (annual)
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Cash Flow: $0
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Equity: $0
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10-years
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Rent payments: -$730,090 (not including increases)
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Cash Flow: $0
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Equity: $0
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25-years
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Rent payments: -$1,827,325 (not including increases)
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Cash Flow: $0
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Equity: $0
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25-YEAR TOTAL: -$1,827,325
oWNERSHIP
1-year
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Mortgage payments: -$64,109 (annual)
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Cash Flow: $3,552 (annual)
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Equity: $0
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10-years
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Mortgage payments: -$641,090
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Cash Flow: $99,775 (cumulative)
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Equity: $486,084
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25-years
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Mortgage payments: -$1,602,725
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Cash Flow: $564,467 (cumulative)
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Equity: $1,748,305 (property is owned free and clear)
25-YEAR TOTAL: $2,312,772
Assumptions
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Initial Building Value: $835,000
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Interest Rate: 6%
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Mortgage Term: 25-Years
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Income Inflation: 2%
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Expense Inflation: 2%
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Sale Price: $1,748,305 (25-years)
THE PROCESS
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Business owner engages with R2 Capital partners (“R2”).
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Business owner provides R2 with their businesses' financials for the last 2-years.
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Once approved, the business owner and R2 determine the building and location.
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R2 begins the property underwriting and due-diligence process.
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The business owner and R2 create a new entity that owns the property.
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R2 applies for and secures the commercial loan.
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Exit/R2 Buyout; in a 2-5 year time frame, the business owner will buy out R2's ownership at fair market value via refinancing; owning 100% of the property. The buyout is pre-determined in the initial shareholder agreement. Fair market value is determined by an independent, third-party appraisal.
REQUIREMENTS
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The business must be operating and have 2+ years of financials.
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The building must be $1M+ in value, or the commercial loan must exceed $750k.
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The property must be located in Canada.
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The business must occupy 25%+ of the building.