The purpose of a business is to buy real estate?

13 Oct 2024 · 1 min

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This content was created by Eric Siu. This content was uploaded by Eric Siu. This is a YouTube video titled "The purpose of a business is to buy real estate?" (published 2024-10-13) containing an English monologue by a single speaker who argues that businesses should buy and retain real estate for tax advantages and passive income. The speaker cites Ray Kroc/McDonald’s, early franchisees, and a YPO acquaintance who sold businesses but kept property and leased it to generate cash flow while funding new ventures (example given: buying a ranch and starting "Warrior's Heart").

Chapters

The purpose of a business is to buy real estate. And the reason is it's a tax reason. So if you look at the model of, let's say, McDonald's, Ray Kroc has said multiple times he's not in the hamburger business, he's in the real estate business. Now, if you look at the real wealth of a lot of those early franchisees, it was all in the real estate. I had another friend that did this, a YPO guy out of San Antonio. He started rehab clinics and then a private equity company came in and he sold the business and kept the real estate and just did long-term leases. And so he's retired. Then he bought a big ranch in San Antonio. And he created a whole new business called Warrior's Heart. But the point is, the cash flow from the businesses got him through that period of time while he was growing his next company, because he also had the cash, right? So if I exit something, I want to keep the real estate because I want that passive income.