My wife currently owns a salon. Its a smaller but very nice salon. The problem is the limitation it has. She is doing as much with it as possible. The other bad thing is her back is starting to tell her that she isn't going to be able to do this for years to come. We have got to find a way to make more money to get her out from behind the chair. She is a color expert and loves to do what she does so we want to stay in the line of business but need to grow.
In January she was approached by a owner of one of the largest salons in town. He is 67 years old and ready to go do the retirement thing. The salon he has is in a building that is 2 levels. 3000 up and 3000 on the main level for a total of 6000 sq. ft.. We would be purchasing the building and the existing salon business which includes 6 tanning beds. tanning is not a option at our current location due to space. the business, appraised by a professional business appraiser referred to us by the WY. SBDC, came in at a range of $115,000 - $$150,000. the building appraised for $250,000 in its current state.
We came to an agreement with him last month. The agreement was a total price of $378,000. We were paying him 40k down and then $2650.00 a month for eight years with a balloon payment for the balance. he wanted to to do the owner financing to give him a steady income for some of his retirement. We shook on it and gave him a $1000.00 ernest money check as a gesture of good faith. We were all for it obviously as then we wouldn't have to mess with banks. this also would help us make it easier to move into stage 2 of the plan.
As some of you probably seen in my other thread, we want to put a gym in on the second floor. As this space is only partially finished, it didn't count much in the appraisal of the building. Just finishing the space alone will greatly add to its value. to find out the lowdown on the gym see my other thread. In short it stands to makes us allot of money!
THEN JUST THIS MORNING!!!! He calls us up and asks me to come meet with him to talk over the contract. See, he was to be getting a legal contract drawn up based on our agreement. he went and talked to his lawyer, his accountant, and his banker. Low and behold they all give him there .02 worth and convince him he is to old for this kind of deal. He needs more money down, which we don t have, or shorter terms, but now all of a sudden he wants to really actually have us get our own financing. That i don t think would be too much of an issue but banks might want more down than the 40K we have barely been able to come up with. That scares us some. The biggest issue is it really puts a damper on the gym plan.
In a nut shell, this is what we would need. We would need $578,000 to buy the salon, building, and to start the gym. We have $40,000 now and without giving up basically everything we own, cant come up with any significant sums of money in a timely manner.
Again, with everything all said and done and figuring on the numbers we have, we are looking at a 60% profit margin in this business. I can provide allot more detailed information to someone who might be interested in helping us, but I am not going to to put it on here for everyone to see.
If anyone has any ideas on ways to work this out, we would be most thankful to hear them. We had a dream that was so so close and now feels like the rug got taken right out from under our feet.
In January she was approached by a owner of one of the largest salons in town. He is 67 years old and ready to go do the retirement thing. The salon he has is in a building that is 2 levels. 3000 up and 3000 on the main level for a total of 6000 sq. ft.. We would be purchasing the building and the existing salon business which includes 6 tanning beds. tanning is not a option at our current location due to space. the business, appraised by a professional business appraiser referred to us by the WY. SBDC, came in at a range of $115,000 - $$150,000. the building appraised for $250,000 in its current state.
We came to an agreement with him last month. The agreement was a total price of $378,000. We were paying him 40k down and then $2650.00 a month for eight years with a balloon payment for the balance. he wanted to to do the owner financing to give him a steady income for some of his retirement. We shook on it and gave him a $1000.00 ernest money check as a gesture of good faith. We were all for it obviously as then we wouldn't have to mess with banks. this also would help us make it easier to move into stage 2 of the plan.
As some of you probably seen in my other thread, we want to put a gym in on the second floor. As this space is only partially finished, it didn't count much in the appraisal of the building. Just finishing the space alone will greatly add to its value. to find out the lowdown on the gym see my other thread. In short it stands to makes us allot of money!
THEN JUST THIS MORNING!!!! He calls us up and asks me to come meet with him to talk over the contract. See, he was to be getting a legal contract drawn up based on our agreement. he went and talked to his lawyer, his accountant, and his banker. Low and behold they all give him there .02 worth and convince him he is to old for this kind of deal. He needs more money down, which we don t have, or shorter terms, but now all of a sudden he wants to really actually have us get our own financing. That i don t think would be too much of an issue but banks might want more down than the 40K we have barely been able to come up with. That scares us some. The biggest issue is it really puts a damper on the gym plan.
In a nut shell, this is what we would need. We would need $578,000 to buy the salon, building, and to start the gym. We have $40,000 now and without giving up basically everything we own, cant come up with any significant sums of money in a timely manner.
Again, with everything all said and done and figuring on the numbers we have, we are looking at a 60% profit margin in this business. I can provide allot more detailed information to someone who might be interested in helping us, but I am not going to to put it on here for everyone to see.
If anyone has any ideas on ways to work this out, we would be most thankful to hear them. We had a dream that was so so close and now feels like the rug got taken right out from under our feet.
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