Micro private equity + real estate
I currently buy distressed properties and renovate them to hold or sell, backed by 2 investors I know personally (the only people I know with money, 1 family, 1 family friend). I have been looking into what I believe is classed as micro private equity, doing the same thing I am doing with properties, buying businesses worth around 700k-1M with leverage and seller financing not necessarily distressed, using profits to pay debt down whilst looking for bolt-ons, organic growth and margin expansion etc.
Properties I am buying to hold either take 30 years to pay off, or on interest-only waiting till the market rises to shrink the principle, Meanwhile, I'm seeing small businesses for sale at 3-4x earnings, essentially paying themselves off in a fraction of a time. I am thinking If I can find some stable businesses and have management in place, along with my improvements, after the first couple are paid off this could snowball into larger and larger deals. Is anyone else doing this or have any drawbacks/advice on this?