Is there anyone who can perhaps shed some light on how to structure this type of deal? The existing wash needs new equipment and some TLC. I have discussed with the owner becoming a new partner, with the intent to eventually buy out the wash in 3-5 years. I have a local presence allowing me to help market and maintain the site. The question is, how is such a deal structured and executed to benefit both parties?
Buying into Existing Wash as New Partner
- Thread starter kdersch
- Start date
Waxman
Super Moderator
it doesn't make sense to become a partner, invest a large amount of money in a rehab in order to buy it at a later date at a much higher price. A better idea is to buy it in the rundown condition and then do the remodel and renovations.
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I’d start by figuring the value if you were to buy 100% of the business. If you are putting in cash equivalent of half the current value and plan on doing the bulk of the work then Id create a deal for over half the equity.
Trying to structure in the future buyout option now would be ideal. That way you do not need to negotiate and overpay later.
Trying to structure in the future buyout option now would be ideal. That way you do not need to negotiate and overpay later.
eckert16
Active member
Not recommending Partnering, given your previous posts, it sounds like you are becoming the endless piggy bank for the current owner... then in the future, if he does decide to sell, you’ll be expected to pay much more for the property if it improves. Just buy it as it is now(if it makes sense). Make your own improvements the way you want.
Why give him money to fix it, possibly get into disagreements (and you loose that investment), or worse, later only to have him charge you more for the property that you improved in the first place later?
Maybe its age, but I just dont understand that type of thinking. I dont see what you get out of this arrangement, except maybe a degree in hard knocks.
Why give him money to fix it, possibly get into disagreements (and you loose that investment), or worse, later only to have him charge you more for the property that you improved in the first place later?
Maybe its age, but I just dont understand that type of thinking. I dont see what you get out of this arrangement, except maybe a degree in hard knocks.