Business sales falling out of escrow

[Triplethought]

So my buddy who sells web businesses says business deals are falling out of escrow left and right. Buyers are getting cold feet. Banks are also getting cold feet on SBA loans. I'm currently in a deal to buy another small business but I feel it is relatively recession proof and seller is financing half of it. It's supposed to close by end of year and is probably 80% there. I'll let you know next year whether I should have bailed too.

Interestingly when I talk to small business owners in my area they are still hiring in the face of finally being able to get a few good people. The only industry we're seeing cut back is construction right now. Everything else seems to be humming along. Quite a few technology purchases, and people are doing more repairs on heavy equipment rather than buying new. Usually, small businesses are more nimble than bigger business so layoffs will come there first. Morale in small business is low right now - both among owners and employees.

Also the real estate wheeler dealers are having a harder time getting money. One offered to trade me interest in a North Carolina warehouse plus I put in some cash for a mortgage note on a hotel in Lake Tahoe and they're willing to take a $400K haircut on the note to get the deal done. It's because they need cash for their next deal. after this deal I will be out of bullets for at least 6 months (until another hard money loan hopefully pays me off). Also my investments in Fundrise (real estate REIT) have slowed to a 2% rate of return for the year.

I've cut way back on my stock buys. I have mostly a wait and see attitude. Based on our "fills" section I'd say everyone else is the same. I expect a good bump in stocks right after the elections but am not sure it will last long. I think I'll spend next year focusing on businesses for the first 6 months and then see about real estate loans after that assuming no one defaults.

On my unsecured consumer loans via Prosper.com I had a "AA" rated client default on a loan the other day. Since i do $250 slices it wasn't a big deal. It just lowered my return below 7% for the year. But if AA borrowers are starting to default that won't be good. The customer for the loan was a nurse so you'd think her job would be secure.

ibonds are looking good. Wish they'd raise the limit to $35,000 (currently $10,000 per person per year). Whenever I have to create a new trust or LLC to hold real estate I use the new entity to buy another ibond with the new EIN number.