JEREMYTINA Posted April 9, 2011 Share Posted April 9, 2011 I may have an opportunity to purchase a soda/snack route with owner financing soon. The company has 50 snack and 50 soda machines on location. Most of the equipment was purchased new, some used. All USI, and Dixie Narco. The company grosses 150K per year, and is operated out of a large storage facility with an office. They have several equiipment dollies, and everything else I would need to have a turn key operation with the exceeption of a truck. They clear/net after taxes 55k. They are asking 100K. What do you guys think about the price they are asking? I know they have a box truck, but I think they are either leasing, or financing it, because they haven't mentioned it going with the purchase. Link to comment Share on other sites More sharing options...
mission vending Posted April 9, 2011 Share Posted April 9, 2011 I may have an opportunity to purchase a soda/snack route with owner financing soon. The company has 50 snack and 50 soda machines on location. Most of the equipment was purchased new, some used. All USI, and Dixie Narco. The company grosses 150K per year, and is operated out of a large storage facility with an office. They have several equiipment dollies, and everything else I would need to have a turn key operation with the exceeption of a truck. They clear/net after taxes 55k. They are asking 100K. What do you guys think about the price they are asking? I know they have a box truck, but I think they are either leasing, or financing it, because they haven't mentioned it going with the purchase. The owner financing part makes it attractive. If the truck is included, the price puts it in a range that makes it at least worth looking at in depth. That's 66% of gross and using the rule of thumb of 50% of cash flow plus assets AND owner financing you are pretty close to what sounds like a fair number. Some questions: What are the terms of the owner financing, downstroke, term, interest rate etc? Is the building in a lease? If so what is remaining term? What inventory level are you going to be left with? Is the truck included? It sounds like the cash flow is documented, how much will they share with you? bankrecords? tax returns? What is the age and condition of the equipment? Any idle equipment in storage? What is the condition of this equipment? Any parts inventory? Any debt to assume? Those are a few started questions to ask. Link to comment Share on other sites More sharing options...
dogcow Posted April 16, 2011 Share Posted April 16, 2011 what did you decide to do on this, i keep seeing it go up on CL Link to comment Share on other sites More sharing options...
JEREMYTINA Posted April 17, 2011 Author Share Posted April 17, 2011 what did you decide to do on this, i keep seeing it go up on CL I decided to pass. I have been looking at big routes, but I just am not comfortable borrowing from the bank or my retirement to put down 50% of my own money. They want to be completely out in a very short time span, and the loan plus the 50% they were willing to finance would have bled the profit almost completely out for 2 years. I told them t keep me in mind if they want to change the terms they are offering. I would want to do an owner financed note over 7 to 10 years. If they agreed to this, I could still hold onto about half of the profit, and use that to pay my father in law to work the route until I expanded enough to leave my own full time gig. There was another listed for 150K which was too high for their net, but they didn't want to move at all on the price. Link to comment Share on other sites More sharing options...
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