I'm looking for some advice.
A college roommate and I have been given the opportunity to purchase a bar in our college town. The cost of the Bar (equipment, name, lease, ect) is around $250K or we can purchase the land and building with it for around $600K. We are still negotiating the final price.
He has come up with a little over $100k (his parents are willing to take a home equity loan for that amount). I have $10 cash plus what ever I can borrow. The owner is also willing to finance part of the purchase (I believe around $50K he has notes on the rest that we'll have to pay). We are looking for about a 60/40 partnership.
Here's what I know so far. The bar operated at a $904 loss last tax year, so the SBA is not much help. I believe this is merely a paper loss for tax purposes as the guy who owns it has several other businesses in town. He has a salary of $1100 per month that'll be eliminated and there is a manager who has a $25k per year position that my partner is going to take over. It's been open for about 1.5years thus far. I will take a salary of about $1 per month for the first year (I will only be doing payroll and not involved in to much of the day to day as I have a full time job that I will keep in case we incur small losses in the short term).
We are in the process of writing a business plan on the premise that there are several new apartment complexes opening within walking distance and no other bars close. My partner has interned there for the last year and has sponsored several of the most profitable nights the bar has had.
A little about me, I have a credit score of around 730 and have about 10k in credit card debt. I don't own a house so I don't have equity or a large mortgage. I only pay $500 per month for rent. I own one of my vehicles out right (its worth about $6K), but have a lease on another ($400 per month). I have around $12k in an IRA that I rolled over from my last job. Last year I made just over $50K and this year will be about the same. Although; I have a business admin degree, have management experience, and currently work in finance for a company (non banking) I have never worked in a bar.
What are our financial options? More importantly what are my financial options? Does anyone have any advice for us? If I'm missing any important information let me know.