Fatal flaw is getting someone to sell you a business that makes 250k a year ...with owner financing. Why would they sell something that makes roughly a million dollars every 4 years and take on risk from someone with now 2 loans and only sitting on 50k in liquid lol

@josuebellota5791

Жыл бұрын

Well yea if that’s they’re only business but maybe somebody is retiring maybe they have more lucrative things going on and it’s too much of a hassle

@EssiCrana

Жыл бұрын

Actually I did a 2 year incubator program doing just this type of deals and there's A LOT of reasons why someone would sell a business like that ... Reasons you woundlt normally think of. As a matter of fact there's lots of businesses on the market like this RIGHT NOW. You don't even have to take my word for it, you can just google business for sale and find it yourself.

@alexandermilne7460

Жыл бұрын

only instance i can imagine is if the guy is old and wants to retire.

@zackz6730

11 ай бұрын

​@@EssiCranawould you be able to give more context on what these reasons might be? I would love to look into this more and sell the concept of seller finance to potential sellers

@JohnSmith-qq9jp

11 ай бұрын

Because almost no one pays cash for a business of that size. Nearly every business under $10MM in revenue has at least some owner financing component.

Alex please cover this more! The people need this. Show us how to buy them, and grow them quickly. 😀

@kanishkpatelFC

Жыл бұрын

This is from a full video on his channel, can’t remember the full name but probably “how to start a business for free” or something like that

@xsw882

Жыл бұрын

Codie Sanchez talks about this ALOT

@LegendaryRob

11 ай бұрын

@@xsw882 yeah she does

I'm doing this right now. It's definitely not as clear cut as Alex describes. There are balloon payments that you have to include in your business plan, cull dates to keep track of, closing costs, and so on... Oh and the lawyer fee I'm paying for the initial contract is $5k

Verbalase messed up

@Tasterr0512

4 ай бұрын

Ong

VERB-

@Hawk-yq4ln

3 ай бұрын

describes a thing, place or person.

@Hain-Channel

3 ай бұрын

Verb-

I would probably have a hard time getting 3/4 owner financing since I have no experience owning or operating a business

@arturas3099

Жыл бұрын

If you gain 50k from your own business, if you buy the other one for 625k which specializes in your knowledge area I think you will have enough starter experience. We learn from mistakes.

On paper, it's that simple. In reality, well, that's another story.

@attav8

Жыл бұрын

That has no substance. That goes fir anything in theory

@mindyourbusiness1934

Жыл бұрын

well sir/ma'am any knowledge y6csn give us will be very much appreciated

@vipgamez6317

Жыл бұрын

Nothing worth doing is easy. He's giving an extremely straight forward framework of how to go about acquiring such a business. Obviously you'd need a good amount of preexisting business knowledge, experience in the niche of the business and a ton of research on the topic. If anyone sees this short and tries to do this without those prerequisites, may God have mercy on their soul and wallet

@asparrow9876

Жыл бұрын

Exactly, not to mention the process & logistics vary depending on where you live. There's a bunch of specific random rules & red tape everywhere.

@CabinetFramingUK

Жыл бұрын

@@asparrow9876 nope.

What actually happens is the seller says fk off I want all the money on closing, no seller financing

Is this a leveraged buyout?

why would someone sell a business netting them $250k/year for 700k

@_AJHughes

Жыл бұрын

Some people are ready to sell their businesses and don’t want to put the extra effort to increase the revenue on the business. A lot of small business oweners might do that honestly. Especially if that’s revenue and not profit

@donworryboutit7631

Жыл бұрын

Lots of people actually. Specifically people looking to retire or just get out and focus on other things that are important to them. Most business listings around me (Florida) are for 50-100k and make 20-40k annual.

@AK-hi4hm

Жыл бұрын

@@donworryboutit7631 where can i find those listings

@Nathantooit

Жыл бұрын

@@AK-hi4hmdamn bro u want the 50k too

@mohammedsaqibkalsekar1058

Жыл бұрын

​@@donworryboutit7631 where to find those listings

That would be you getting a loan (from the bank), by you putting 25% down, and that loan would be the downpayment for a bigger loan (the seller financed one)

@CabinetFramingUK

Жыл бұрын

So?

Cool, business advice from Mickey

Whereas how can we identify such businesses is US ss well ss outside and how to evaluate

Yes. You could even get a highly experienced board in exchange for shares, and roll up companies with seller financing and debt. You could even use top 5 accounting firms and lawyers with success fee, for the due diligence.

@RomilCPatel

Жыл бұрын

QLA?

ALEX TEAM: JUST FYI - THE THUMBNAIL MAKES HIM LOOK LIKE MICKEY MOUSE. 😂👍

@jenninemorel7693

10 ай бұрын

I was just about to post that!!@

Codie Sanchez has entered the chat

original video link please

SBA loans only allow up to 5% owner financing. You’re also not making $250k because there’s now debt to service. Oh yea and SBA is gunna want you to put your house and other assets as collateral in case you fail.

@camaranpayne5355

Жыл бұрын

Conventional loan is 3 percent of your credit is 620+ and debt to service would be payed for from the customers that purchase items from your business or service.

Well business must be operated. Just buying it wouldn't solve anything if not get things worse

@CabinetFramingUK

Жыл бұрын

If you’re in the same field already, then it would just leverage your time and effort

No business owner is going to wear that seller finance loan risk.

@kareem199928

Жыл бұрын

Then you don’t know how desperate some business owners are to sell.

@matlikescats

Жыл бұрын

@@kareem199928why would any business sell for $250K/yr in profit lmaoooo

@pj-hs7pk

Жыл бұрын

Because they know something you don’t

@thehoov6672

3 ай бұрын

​@@kareem199928if they are making $250k pa profit... They ain't desperate to sell.

Verbalase really messed up

If he puts his head in the middle of the frame he turns into money making mickey mouse

Noone would sell you a business that does that well, for that little.

@synewparadigm

Жыл бұрын

It's rare but it exist.

@CoBrAToRcHStream

Жыл бұрын

It might only net a quarter of that (a completely unknown variable). If it was netting $250k I would say it's still possible someone wants out. It's not that far fetched.

@hc06qh

Жыл бұрын

Someone smart that would do exactly the same with that 250k "buying a million dollar worth company with that money" would do this.

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only 200k? When it should been the rest?

what types of small businesses would sell like this? restaurants, gyms?

ya.. but you have to pay your loan and the seller now... and that will eat a big chunk of biz income, plus overheads, you are left with 60k per year with extra headaches... congrats!

I have absolutely no idea what you're talking about, mate. But yep, I'll buy it.

Anybody else get a Mickey Mouse Vibe shortly after that video started?

So, a Leveraged Buy Out

you can buy a airplane but can you fly it? the same with business… you can buy a company but can you manage it?

my plan was to get an 850 on 8-10 different cards with the highest limit possible while saving 50-60k in the next year, theres no way i could do this you guys are saying?

The only bad part is having the seller agree on seller finance then Getting the sba loan cuz they only put 5% of what ever you need

How the fuck is this only a short. This should be a in a entrepreneur master class

Overall you get it all faster but your paying way more long term

That seem interesting but What is this seller financing thing? Why seller would do that? Instead of keeping it and keeping all thé money and rents

$625k for $250k profit? Thought the multiple would be higher than 2.5X… more like 7x eh? In any event, seller financed deals can be super nice. especially buying an existing business with enthusiastic customers and a good few years under its belt - way way way less risky. Think there’s a book called Buy then Build, might have more in the topic.

@AustrianEconomist

Жыл бұрын

7x MAYBE in a very, very solid SaaS with a clear path to growth and a few other qualities. You can find lots of other types of businesses out there with multiples lower than 3x.

@dustinlee5403

Жыл бұрын

why would sellers agree to seller finance, how does that benefit them can you explain for me? ty

@ceotension4525

Жыл бұрын

You are stupid? Why would a potential buyer of a business wanna wait 7 years to make their money back. 2.5x is the average across the world.

@merunasg

3 ай бұрын

@@dustinlee54031. They stop working on the business which is huge. Businesses take a shit ton of time. 2. They are tired and want to retire or start a different business. 3. Their business is about to blow up (they know something you don’t) and want to get rid of it asap

Nice explanation.

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Awesome

Which video is this from ?

Could someone in the comments or Alex 😅 talk about the personal guarantee requirements here? Some banks require it while some may not.

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

@LegendaryRob

8 ай бұрын

@@newsoul.9balance is a seller’s note that you pay directly to the seller over the term agreed upon by you and the seller.

great

My question always comes back to working capital. How do you handle that in the early days of the business.

@justinbeard

Жыл бұрын

Great question. Hopefully the business cash flows. If not have a good amount of credit card limit and pick wisely what you spend capital on. Also knowing the industry and what turns a profit is a huge key. Good financial advisor who can look at your income, cash on hand and debt. Then tell you how much money you can actually put down to purchase the business. For me I was recommended to keep at least 15% of the entire COGS for the year as working capital.

@RomilCPatel

Жыл бұрын

AR factoring

It ain’t that easy. They forgot to mention you gotta put in hard work. Majority of the population is not cut off for this.

@merunasg

3 ай бұрын

Unless you have experience. Start with what you know or would like to know and get at it

Yeah this isn’t going to happen. I know nothing about pricing business but no one making $250k from a business is selling it for $650k unless they’re rich or really want out super fast. I’d say most people would want $1.2m which is way more.

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

@Ayititunes

2 ай бұрын

you know nothing about pricing business. you should of stopped there lol

7.6% down nice

Well it's that aaand not taking an income for 4-6years while you pay off the business theeeen you have a business hopefully putting 250k a year in your pocket if you're lucky I worked my ass off at mine and this and next year are the first years where I should actually see serious coin and not just scrape by and that is in an industry where I had 10 years experience but I'm a slow learner and learned some hard expensive lessons

Came for the mickey mouse ears.

But why the owner sell a business making 250k profit, he would have to be out of his mind or drunk?

@justinbeard

Жыл бұрын

Because life. I purchased a business last spring that was/is profiting +200k plus annually. The owner has kids in middle school. He ran it for over a decade and was looking to cash out and chill.

So how much knowledge do I need to attain a business And not be too risky

Realistically a business doing 250k profit per year isn't selling for anything less than a million... I love you Alex but this wasn't it

@HCG

Жыл бұрын

You don’t know what you’re talking about. If you took 3 seconds to check businesses for sale you’d see that his estimate is accurate. Delete your account before you embarrass yourself again

if I make 250 per year and I want to sell the business. it means I want the 600_700 k now . not with the loan I can make it in 3 year and still keep my business

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

🎉

Don’t expect to save 50k and be able to pull this off lol you need to be able to get that much credit on top of the 50k

@LoudPxckk

10 ай бұрын

my plan was to get an 850 on 8-10 different cards with the highest limit possible while saving 50-60k in the next year, theres no way i could do this you guys are saying?

No one sells a business at a 40% cap rate

Where can I find these businesses? Where do people buy/sell businesses?

@Dwiggytv-OG

Жыл бұрын

There aren't any. It's just a story that sounds nice.

Don't forget to mention this process takes at least a year for paperwork to go through.

@justinbeard

Жыл бұрын

Went through the entire SBA process in less than 3 months. Started mind feb 2022 and closed May 11th 2022 However, I was very fortunate that the SBA argent, the banker and the business owner I purchased the company from where all on top of their shit. Likewise I was pulling all nighters getting the docs needed/created for pre flight and closing process.

@princekjtheartist

Жыл бұрын

@@justinbeard hey, how can I get in contact with you? You seem smart and wealthy (as opposed to rich) I like knowing those kinds of people.

Similar strategy to Mr. Pena

But after taxes and debt servicing. Now you’re back down to 100k a year.

That's only if you can guarantee the business continues to make at least 250k

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

This is a fucking sign

What about the collateral requirement?

@ballsligmer5572

11 ай бұрын

you have the business lmao

@LegendaryRob

8 ай бұрын

@@ballsligmer5572Right, but if it’s a service business and there’s no collateral such as real estate, recurring cash flow, or equipment it could be tough. I just learned that to combat that, lenders will take out an insurance policy on you to ensure that if something happens to you, they’ll get their money back.

99% would fall over in the “real” world as soon as you mentioned seller financing. You make too many generalised assumptions here and it borders on being misleading.

If it’s that simple why haven’t you bought up all these businesses at 50k each😂

LOL @ SBA loan.. good luck with that

@CabinetFramingUK

Жыл бұрын

What? For buying an already established business? No luck needed

This is true but also not, you have to think about the equity and actual hard ware value, business worth 10 mil can make only 250k

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Anybody else thought he was cosplaying mickey mouse from the thumbnail?

I would never sell a business on those terms.

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Is it just me or does the guy look like Mickey Mouse with those big giant ears?

I can get 50k in student loans but not business loans

Why the heck i will sel my business for 3 years of profits ? Wtf 15 years i minimum

sounds simple if you are someone that run 5 different businesses as alex did at same time. But chance of you ruining the business in this example is big. Because if it was easy to lead no sane man would sell it like that for 250k.

@ocimak

Жыл бұрын

The business didn’t sell for 250 the business sold for 625. He said It’s 250 in profit. Also we are in the mist of the richest generation retiring what do you think is happening to those businesses?

@rokogrga43

Жыл бұрын

​@@ocimakno the business sold for 250 upfront, and other 400k will be payed over time. The point is you wont know how to run that business probably if you only worked a job for 60 k before that.

@newsoul.9

8 ай бұрын

​@@rokogrga43Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Have you yourself bought a 625k business?

You make it sound easy but is it so easy though?

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Assuming you can get a $250k/yr profit business for a 2.5x multiple...... Good luck with that lol

@CabinetFramingUK

Жыл бұрын

What? No mention of profit here

@DevinRitrosky

Жыл бұрын

​@@CabinetFramingUK he says "$250,000 in profit" multiple times.

@mohammadjolaj7795

Жыл бұрын

That’s a good valuation for a business this size

@DevinRitrosky

Жыл бұрын

@@mohammadjolaj7795 you don't know any other details about the business. There isn't near enough information to put a valuation on it, let alone a multiple as low as 2.5x.

@RomilCPatel

Жыл бұрын

2.5x is not a low multiple

Company valued at 625k doesn't make 250k a year in profit lol

Came for mickey mouse. Not disappointed

Show me this business for sale and I will buy it

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

You look like you have Mickey ears on 😅

So owner says no 😒 or bank says no 😒😒.

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Anyone selling their business that way = a terrible business to buy

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

looks like Mickey Mouse

Someone who profits 250k a year would be nuts to sell for 625k

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

I have no idea what you're talking about.

….??

Mickey Mouse !

Alex before steroids

Mickey mouse

Good luck getting a business to sell for 2.5x earnings 🤣 business owner is getting ripped

@newsoul.9

8 ай бұрын

Wait im confused...the lone is suppose to cover the whole payment (625k) so why did the bank only give 200k? When it should been the rest of the payment right?

Terrible idea!

if u think I CAN PAY THE BANK AND THE SELLER EVERY MONTH and still have income leftover for myself thats anywhere close to 250k. u my friend are delusional

Lmao trying to sound smart with imagination numbers.

Most business sell at 5-10x, this is stupid.

yeah yeah.. wtf.. most people cant manage there own life.. and then you accept them to manage a busn..

This guy trimmed his beak a while ago…looks bad

He beçame rich through acquisition Entreprenuership, sharp

🎉