AFTER MONTHS OF SEARCHING AND paying $10,000 for professional site selection assistance, Jack and Diane finally found a commercial site that meets the criteria set by their oil-change franchisor. Now they need to find a way to lock it in and finance it.

There's a little L-shaped piece of land in the Pacific Northwest that's a third of an acre and costs $225,000. Jack and Diane want to stake their claim. The adjacent use is a gas station and a car wash, and the neighbor is willing to grant an easement so the oil-change franchise can have access from two major streets.

The creation of these business synergies is important, and the franchisor's demographic studies have shown that the site exceeds their expectations, as there are plenty of cars and people in a three-mile radius. Although the site is narrow, the franchisor's architect is willing to change the plans a bit to make it work. Our intrepid couple's attempt to wedge their location into a tight spot follows a trend in the United States, as more and more franchisors are looking for ways to reduce overhead.

The question is, how do you pay for this new opportunity? lack and Diane have saved about $100,000 from their professional careers and need to conserve their cash. The time has come to write an offer on the land, and they're going to need to structure their deal.

Spend Some, Save Some

Financing the purchase of land by using SBA financing is certainly an attractive option, as the banks that write loans with SBA underwriting can amortize the cost over a 25-year period. SBA rates usually float about 2.5 points above the prime rate. SBA lenders generally like to make loans that incorporate real estate because the land acts as a solid piece of security for the loan.

However, Jack and Diane know' they won't reach their goals for financial independence with just one oil-change center, so they're looking for ways to conserve cash for future locations. Here are some of their options:

* Contract for deed: Attorneys like to refer to the contract for deed as the neutron bomb of real estate.