Plenty of Louisville businesses own the building they operate in: the restaurant with its own lot, the car wash on a corner, the daycare in a purpose-built center, the machine shop with a warehouse behind it. When one of those businesses changes hands, two deals happen at once. There is the business, and there is the real estate. Winner Realty handles the real estate side, and we work alongside your attorney and CPA on the rest.

This page explains how those deals are put together in Kentucky and Southern Indiana, who handles which part, and how to keep a sale quiet until you are ready for people to know.

Two deals inside one deal

A business that owns its property can usually be sold in one of a few ways:

• Business and building together. The buyer takes the operation and the real estate in one closing.
• Business first, building leased. The buyer takes the operation and signs a lease with the owner of the property. Often the seller keeps the building as an investment.
• Building only, as a sale-leaseback. The owner sells the building to an investor and stays on as the tenant, which turns equity into cash while the business keeps running.
• Business in a leased space. There is no property to sell, but the lease still matters a great deal. The landlord usually has to agree to transfer it, and the remaining term, renewal options and rent changes can make or break the price.

Each structure changes the price, the financing and the taxes, so it is worth deciding which one fits before anyone talks numbers.

Who handles what

A clean deal depends on the right professional for each piece, so we keep our lane clear.

• Winner Realty: pricing and marketing the building or land, finding and screening buyers or properties, reviewing and negotiating the purchase contract or lease, coordinating inspections, surveys and title, and keeping the deal on schedule through closing.
• Your attorney: the business purchase agreement, how the deal is structured, assignment of contracts, non-compete terms and any question about liabilities.
• Your CPA: how the sale is taxed, how the price is split between the business and the real estate, and what the numbers look like after tax.
• A business valuation professional: what the operation itself is worth, separate from the building.

In Kentucky, brokering the real estate part of a deal requires a real estate license under KRS Chapter 324. If someone is negotiating for the property, it is fair to ask who their license is with.

If you are selling

Selling a business that owns its building is different from listing a house. Most owners want the process quiet, because customers, employees and suppliers can get nervous the moment they hear a sale is possible.

• No sign out front. Buyers are introduced privately and screened first.
• A confidentiality agreement before financials. A buyer signs before seeing sales figures, tax returns or the lease.
• Separate numbers. The building and the business are priced on their own, so a lender and a buyer can each see what they are paying for.
• Clean paperwork. Three years of financials, the lease or deed, permits, equipment lists and any liens are gathered up front, which tends to shorten the time to close.

If the business is closing or winding down and you own the building, we can sell the property on its own. Our guide to selling commercial property in an estate and our free commercial property valuation are good places to start.

If you are buying

Buying an operating business with real estate means checking the business and the property separately before you commit.

• Is the use allowed? Confirm the zoning permits the business, and that any permits, licenses or inspections carry over to a new owner. Some, such as health or alcohol licenses, may not transfer automatically, so check with the agency that issued them.
• What condition is the building in? Roof, mechanical systems, parking lot and any environmental concerns all affect value. Properties like car washes, gas stations and dry cleaners often call for an environmental review.
• Do the books support the price? Compare tax returns to the profit and loss statements and ask how the owner is paid.
• What does the lease say, if there is one? Look at the term, renewal rights, who pays taxes, insurance and repairs, and whether the landlord must approve the transfer.
• What liabilities come with it? In an asset purchase, a buyer can still be pursued for some of a seller's unpaid state taxes in Kentucky, so attorneys commonly ask for a tax clearance before closing.

Our commercial due diligence checklist covers the property side in detail.

Financing a business with real estate

Lenders treat these deals differently from a plain commercial property purchase, because they are underwriting the operation as well as the building.

• SBA loans. Small Business Administration loans are a common route for owner-operators. The 504 program is built around buying real estate and equipment, while the 7(a) program is often used to buy the business itself. Owner-occupied SBA deals generally require the buyer to use most of the building, and the buyer typically puts down around 10 percent. Confirm current terms with a lender.
• Conventional commercial loans. Banks often finance owner-occupied property directly, usually with a larger down payment than an SBA loan.
• Seller financing. Many small business sales include a note from the seller for part of the price. It can also keep a deal alive when a bank will only lend against the building.

Our guide to commercial real estate loans in Kentucky covers the basics of how commercial lenders look at a property.

Taxes worth asking your CPA about

• How the purchase price is split between the real estate, equipment, inventory and goodwill, since each is taxed differently.
• Whether the real estate portion can be part of a 1031 exchange. Under current federal law, a 1031 exchange applies only to real property, not to the equipment or goodwill in the business. See our 1031 exchange guide for commercial real estate.
• Whether a cost segregation study could speed up depreciation on a building the buyer will own and occupy. See cost segregation for commercial real estate.

Louisville and Southern Indiana

We work on both sides of the river. Our principal broker, Lisa Tucker, is licensed in Kentucky and Indiana, which matters when a business or its customers span the river, or when you are comparing a Jeffersonville or New Albany building to one in Louisville. Our Louisville commercial real estate hub and our Southern Indiana commercial guide cover each market.

Start with a quiet conversation

If you are thinking about buying or selling a business that comes with real estate, the first step costs nothing and stays private. Tell us what you own or what you are looking for on our commercial inquiry form, or text or email Rob at (502) 305-8915 or Rob@thewinnerrealty.com.

We are real estate brokers, not attorneys, accountants or business appraisers. Nothing on this page is legal, tax or financial advice. Talk with your own professionals before you sign anything.

Frequently asked questions

Do you sell businesses, or just the real estate?

We represent buyers and sellers on the real estate: the building, the land or the lease. We coordinate with your attorney, CPA and a valuation professional on the business itself, and we can point you to them if you do not have them yet.

What kinds of businesses does this cover?

Any operating business that owns or leases commercial space: restaurants, car washes, daycares, retail shops, light industrial and service companies, medical and professional offices. Larger or highly specialized operations may need a dedicated business broker alongside us.

Will my employees and customers find out?

Not if you do not want them to. We can run a quiet sale with no sign out front, a confidentiality agreement before any financials are shared, and details released to qualified buyers only.

Can I sell the building and keep running my business?

Yes. A sale-leaseback sells the property to an investor and gives you a lease so the business stays where it is. The lease terms matter a lot, so we negotiate them as part of the sale.

What happens to the lease if I sell a business that rents its space?

The lease usually has to be assigned to the buyer, and the landlord generally has to approve it. We review the lease early and ask for the landlord's consent before the deal is far along.

Do you charge a fee to talk it through?

The first conversation is free. Fees on the real estate side are agreed in writing before we start work.