Licenses: The Difference Between Buying vs. Pairing
First thing’s first, if you already own a property that works for what you want to do; buy a license and move it.
If you don’t have a property, and you are wanting to enter or expand in the industry, there are a few things you should consider. The biggest differences between your two options are cash flow, time and risk. If you buy a licensed property you will have earnest money as an upfront cost. This also means you will have to put into escrow for the duration of the time it takes for OLCC to process the change of ownership (which fluctuates). It used to be a year and the fastest I have seen it take was about 50 days. Right now it is between 120-180 days. Once the deal closes you pay the remaining balance and you have a licensed property and start working to make money.
Now, if you go the other route and buy a property you will have to purchase/lease the property and pay for all the improvements for the property to be licensable.Then, find a license to buy. From there beings the wait of 120-180 days for the change of location and change of ownership. Your money will be tied up, not making money for 6+ months, there will also be other unknown time variables with contractors and local jurisdiction bottlenecks that could extend the wait even longer.
For instance, the city of Portland can take months to receive your LUCS, Land use compatibility statement and a majority of sellers selling a license that need a change of location require you to have this prior to accepting an offer. Another bottleneck is the power company. If you need upgraded power, it can take 6 months or more to get that done, too.
There is a premium in buying a licensed location but it removes a lot of risks. You know what to expect and you will only pay if you successfully get licensed and the deal closes. If you don’t buy a licensed location you have to put out all the money upfront without any guarantee of being licensed in any particular time frame.
Give us a call, we can help you look at all the differences and find what option is best for your situation!