The OpCo/PropCo Strategy: Structuring Main Street M&A Without Personal Financial Statements
A technical guide for acquisition entrepreneurs. How to separate the operating company from the real estate and finance the building without DTI limits.
The secret to seamless lower-middle market M&A is decoupling the real estate from the operating business. It is called the OpCo/PropCo structure.
When you buy a business and its real estate together through traditional banking, the underwriter blends the risk. They scrutinize your personal debt-to-income (DTI) ratio, your personal financial statements (PFS), and years of tax returns.
By utilizing CFGX, you structure the deal differently. You create a Property Company (PropCo) to hold the real estate, and an Operating Company (OpCo) to run the business. The OpCo pays rent to the PropCo.
We finance the PropCo.
Because we only care about the real estate and the operating business's ability to pay rent (verified via unaudited P&L), your personal finances are completely insulated. No tax returns. No PFS. No DSCR ratio. The property is the borrower. This structure allows acquisition entrepreneurs to scale without hitting personal debt ceilings.
Text 'ACQUIRE', the property address, and loan amount to Scenario Desk at 332-241-8100.
