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W W W. M A I N E B I Z . B I Z 23 A P R I L 6 , 2 0 2 0 F O C U S B A N K I N G / F I N A N C E / I N S U R A N C E Ainsworth, elin & Raftice. "ey're taking that money out and putting it into an active business. ere's a risk if the business doesn't do well." For Hinko and his wife, the main consideration was that they had to get comfortable with the fact that they were investing their retirement savings in their own ability to make their business a success and generate enough of a return to allow them to retire later on. Hinko used another ROBS pro- vider, Guidant Financial in Bellevue, Wash. He paid about $5,000 up front. "It seems like a lot when all you're getting is paperwork," Hinko says. "But there are things they're doing on the back side. I said, Yes, it's prob- ably worth the time and the effort for them to do it, as opposed to me doing it and maybe doing it wrong." e process is conducted by phone and online, he explains. Once the rollover and stock purchase in the new corporation were completed, Hinko was able to write a check to the seller of the James Place Inn. "ROBS can be a powerful tool in purchasing an inn or hospitality prop- erty," says John McCarthy of Legacy Properties Sotheby's International Realty, the Hinkos' broker on the Freeport deal. "What I noticed most about the ROBS was the excitement and determination created by allow- ing the 401(k) owner to take part in their own destiny. Buyers felt that they wanted to start using their investments for a change of lifestyle and a second career in Maine. Many spent years at a classic 9-to-5 office environment with little control over their 401(k). It was 'money for a rainy day.'" "It opens up an enormous amount of liquidity that people didn't realize they can put to work," says Rick Wolf, partner and owner of e B&B Team in Kennebunk. ROBS "has become a very helpful tool to some buyers who could otherwise not raise the capital needed to purchase, or to purchase what they would really like," says Dana Moos, director of the lodging and hospitality brokerage at Swan Agency Sotheby's International Realty. "I've had at least three or four buyers use it in recent years." But the recent stock market melt- down demonstrates timing is every- thing. Moos has been working with a client looking to buy a lodging prop- erty. e client performed the rollover shortly before the meltdown and has the full cash value of the original 401(k) on hand, she explains. Clients who haven't completed the ROBS process have a decision to make in the current climate, particularly if they hadn't yet shifted their funds to short-term conservative products, says Steven Bosinger, a certified public accountant with Austin Associates CPAs in Auburn. "Anyone who's in a position where it would be difficult to backtrack out of this scenario should have changed their investment sufficiently that this market downturn should not have impacted them greatly," Bosinger says. "Anybody who was just thinking about this sort of transaction has said suddenly, 'Now is not a good time. We'll table this discus- sion until our investments are back up to where we're comfortable liquidating.'" In the case of Roy and Sue Forsberg, in 2013 they left careers in software engineering and used a com- mercial loan and ROBS to buy and improve Wolf Cove Inn in Poland. "We thought long and hard about that," says Roy Forsberg. "e conclusion was, 'I feel better about managing my own retirement myself, by running my own business, than I do putting it in the hands of some mutual fund manager on Wall Street and letting the markets do what they may with my money, and on top of that having a percentage skimmed off the top by those firms.' e purchase was $918,000 and the inn, at the time, was doing $130,000 in revenue. Now the value is $2.95 million, revenues last year were $660,000, and the return on investment has been at least equal to the stock market, he says. "And now the market is tanking," he adds. Like the hospitality industry overall, his business is suffering, too, as cancellations pour in. "But when people start booking again, our business will be right back where it was, whereas the stock market will take a while to get back to where it was." Laurie Schreiber, Mainebiz senior writer, can be reached at lschreiber @ mainebiz.biz Member FDIC Now More Than Ever BANKING IS BELIEVING Through good times and bad, GSB has been supporting Maine businesses and communities for more than 150 years. We believe in the resiliency of Maine people and Maine businesses. Together, we can and will overcome this challenge. That's what 'Banking is Believing' is all about. Learn about our response to COVID-19. Visit GorhamSavings.Bank I try to make sure clients realize it's not free money. — Jerome Gamache

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