Estb business purchase finance ( none franchise )

Discussion in 'Loans & Mortgage Brokers' started by Speede, 25th Dec, 2015.

Join Australia's most dynamic and respected property investment community
Page 2 of 2
  1. Speede

    Speede Well-Known Member

    Joined:
    26th Sep, 2015
    Posts:
    786
    Location:
    A wannabe Mexican
    Divorce
     
    Speede, 27th Dec, 2015
    #21
  2. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,426
    Location:
    AU
    The "assets" are likely goodwill.

    Guaranteed we arent talking about a situation whereby net current assets are being sold less than their value ie. A 70 cent dollar.

    Also, Op has advised the 500k number is "gross profit before tax", not EBIT.
     
    The Falcon, 27th Dec, 2015
    #22
  3. Speede

    Speede Well-Known Member

    Joined:
    26th Sep, 2015
    Posts:
    786
    Location:
    A wannabe Mexican
    500k before tax. Assets are so much that a warehouse is rented in order 2 keep all the stock.
     
    Speede, 27th Dec, 2015
    #23
  4. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,426
    Location:
    AU
    Ok a question for you. Why doesn't the business liquidate its 900k of assets rather than sell to you for 650k?
     
    The Falcon, 27th Dec, 2015
    #24
  5. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,426
    Location:
    AU
    so you mean 500k is net profit before tax? - ie. After all outgoings / overheads including salaries (incl. managements..ie the owners) are paid then there is 500k net profit pre tax?
     
    The Falcon, 27th Dec, 2015
    #25
  6. Speede

    Speede Well-Known Member

    Joined:
    26th Sep, 2015
    Posts:
    786
    Location:
    A wannabe Mexican
    Probably take 2 years 2 liquidate it all.
    Total business turn over is 1.0-1.1m per annum. 3 workers besides owner....after paying workers...rent...all other running costs...owner is left with $500,000 BEFORE TAX.
     
    Speede, 27th Dec, 2015
    #26
  7. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,426
    Location:
    AU
    Cool. Shouldn't be a problem finding finance then. Good luck and keep us posted.
     
    The Falcon, 27th Dec, 2015
    #27
  8. 4point5million

    4point5million Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    127
    Location:
    Global
    A real estate business that holds 900k of assets in a warehouse?
     
    4point5million, 27th Dec, 2015
    #28
    Phantom likes this.
  9. DaveM

    DaveM Well-Known Member

    Joined:
    14th Jun, 2015
    Posts:
    3,761
    Location:
    Adelaide & Sydney
    How old are the assets and whats their expected life and replacement schedule?

    At a guess here, its a furniture rental/real estate staging business :)
     
    DaveM, 27th Dec, 2015
    #29
    158 likes this.
  10. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,357
    Location:
    Perth
    How about a warehouse full of caravans/trailer homes?
     
    Westminster, 27th Dec, 2015
    #30
  11. DaveM

    DaveM Well-Known Member

    Joined:
    14th Jun, 2015
    Posts:
    3,761
    Location:
    Adelaide & Sydney
    How about a warehouse full of caravans full of rental furniture!!!!
     
    DaveM, 27th Dec, 2015
    #31
  12. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,357
    Location:
    Perth
    Well going with @DaveM's idea of furniture staging I found this ad - sounds like a match.

    BUSINESS FOR SALE - SERVICE BUSINESS

    I have to say - when a deal sounds too good to be true it often is. Might be one of those where the warehouse rents is so exorbitant and locked in for a long lease that it's a killer.
     
    Westminster, 27th Dec, 2015
    #32
    Phantom, mrdobalina, Ace in the Hole and 3 others like this.
  13. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,426
    Location:
    AU
    I'd imagine that inventory would get old fast then, would need to continuously spend on new furniture per latest styles. Stop investing in new inventory and its all over. And here's a tip, inventory at $1m purchase price is worth about 30% of that after a few years..
     
    The Falcon, 27th Dec, 2015
    #33
    Ace in the Hole, 158 and Westminster like this.
  14. Ace in the Hole

    Ace in the Hole Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,874
    Location:
    Sydney
    Good find, looks like the one.
     
    Ace in the Hole, 27th Dec, 2015
    #34
  15. mrdobalina

    mrdobalina Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    1,970
    Location:
    there's more to life than working
    Quick sale dropping price from $995k to $650k?
     
    mrdobalina, 27th Dec, 2015
    #35
  16. sanj

    sanj Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    3,471
    Location:
    Perth
    I dont know what @Speede is playing at but $1m inventory at cost for a styling business where stuff would not only get damaged a fair bit but be out of date quickly is a long way away from the story he was spinninh.

    Any independent accountant wouldve said that
     
    sanj, 28th Dec, 2015
    #36
  17. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,357
    Location:
    Perth
    I was just guessing at that business for sale :cool:. He might be talking about something different.
    I do agree if it's a staging/hire place then furniture wear and tear/depreciation is very high
     
    Westminster, 28th Dec, 2015
    #37
  18. Speede

    Speede Well-Known Member

    Joined:
    26th Sep, 2015
    Posts:
    786
    Location:
    A wannabe Mexican
     
    Speede, 28th Dec, 2015
    #38
Page 2 of 2