Interview: Selling a Property Development Business for $1.5M USD

Today we’re doing things a little bit differently, the team is interviewing Michael about his own company exit and the lessons he learned from it 

Q: Let’s start from the top — what kind of business did you sell, and what did it look like at the time of sale?

I sold a Property Developer a few months ago in October 2024. By the time I sold it was very stable, no drama, boring actually, exactly what a cash flow buyer would be looking for. I scaled it for a while, mostly using bolt on acquisitions.

Q: What got you into property development in the first place?

I kind of stumbled in to it to be honest. I was working as a private equity deal originator and found a deal in Hull that didn't work for them, but I thought that had potential. I acquired it as a distressed deal and turned it profitable after a few months. From then on that industry works on transactions so you have to find the next deal constantly.

Q: How long did you run the business before selling it?

I acquired the first part of the business about six years ago. Bolted on several others over the next two years after acquisition and held it steady for the rest of the time

Q: What made the business valuable — what were the main revenue drivers or assets?

The only reason why the sale was over seven figures was because of the hard assets. The property management side and a contract side didn't sell for much so make sure you have at a minimum a mix of tangible and intangible assets.

Q: Were there any personal or strategic reasons that pushed you toward selling when you did?

I was honestly tired of being in the same industry for a while, and because I was so often not in England it didn't make sense to me anymore to have a physically-set business. 

Q: Once you decided to sell, what did you do to prepare the business?

Basically, financial spring cleaning. All the spending that wouldn't be relevant to a buyer had to be removed and any inefficiencies needed to be stopped. I stopped taking expenses out for example and had a laser focus on profit. It actually raised monthly cash flow quite a lot, I guess you’re best at whatever you focus on

Q: How did you come up with a valuation for the business?

Well, luckily enough, property is pretty easily valued, however getting a good value for intangibles is all about your skill as a persuasive salesman. This is where building rapport really came in handy.

Q: How did you find the buyer — was it through a broker, a cold outreach, a warm intro?

I tried all three, and eventually it was indeed through a broker, but the broker was found through cold outreach.

Q: Did you handle the negotiations yourself, or bring in someone to help?

I did all the negotiations myself, which was critical that on, because when the final buyer almost fell through I flew to Dubai to settle the minor issues outstanding and it was the personal relationship I’d built that saved the deal 

Q: What were some of the trickiest parts of the negotiation?

The more detail you go into in due diligence. the more it’s inevitably worse for the seller even if there's nothing wrong with the business; it just requires more energy from the buyer and therefore they'll get more fatigued with the process especially when there's delays in finding information. In the future, I plan to give buyers discount or better terms like a payment plan in exchange for a shorter due diligence period. But on a personal financial level you can only really offer a payment plan after you've already secured a liquidity event. 

Q: How long did the entire sale process take, start to finish?

Frankly, I had the idea about 18 months before the final closing. The sale fell through 3 times with two different buyers and honestly at that point it's about keeping a level head and avoiding deal-heat, which is basically such a desperation to get the deal done you're willing to compromise and reduce your final results.

Q: What was the final sale price — and how was it structured?

£1.2 million cash upfront, can’t complain. Technically they were two installments of roughly 50% each, but these were within three weeks of each other in October 2024 so I don't really count that as a divide. If anyone wants to be strict with me on that one feel free to call me out on it.

Q: If you could go back and change one thing about how you handled the sale, what would it be?

I would sell earlier. The revenue had been similar for several years and so I was ready to do different things probably two years before I started the sales process.

Q: What happened after the deal closed — what did your life look like?

Well, I'm currently living in a high-end van in rural Ukraine, visiting a different city almost every day, talking to you with my starlink Wi-Fi and honestly it suits my personality perfectly. The people who say money can’t buy happiness usually don't have any money.

Q: Was it hard to let go of the business? Any emotional hangover?

No, and frankly, I was mentally checked out probably a year before I sold.

Q: Did you jump into something new right away, or take some time off?

Most people would say what I'm doing now is taking time off, but writing and exploring places full-time is what I wanted to do, so in my opinion, I've jumped in.

Q: Now that you’ve done it — would you sell another business in the future?

Of course! I'd like to do several different acquisitions and offer a dynamite payment plan when I sell, to have cash flow. The way it works is you'd have a holding company with all the intellectual property and employee contracts. It's fairly arcane, but maybe I'll explain it in the next issue.

That’s the end of this week’s issue.

Until next time,

Unlock Wealth Weekly Team