This video demonstrates how to calculate the return on investment for a business acquisition by analyzing cash flow, debt structure, and owner earnings. The presenter breaks down a Florida smoke shop deal with $60,000 annual cash flow, $150,000 asking price, $85,000 down payment, and $65,000 seller financing over 18 months. After accounting for the $3,611 monthly debt payment, the owner-operator earns approximately $1,400 monthly, yielding a 20% cash-on-cash return. When combined with potential owner-operator labor income of $33,000 annually, the total return reaches $50,000, allowing the investment to pay for itself in about 1.5 years.
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Deep Dive
This $85K Investment Could Pay You Back in 1 Year (The Deal Breakdown)Added:
19, 20, 1, 2, 3, 4, 5. What's up, guys?
I got an exciting listing today. It's a cigar and smoke shop in Fort Lauderdale, Florida on a main road. This place has so much potential. An owner-operator can make their money back in a year, and I'm going to show you how. So, this is the actual picture of it. It's small, but there's a lot of potential, like I said. It's doing about $60,000 a year in cash flow. Now, what I really love about this is the exclusive license. So, right now it has a CBD license, a THCA marijuana license, and a tobacco license. Also, it has a 300-sq-ft isolated closed humidified room where people smoke cigars. Really cool. You can even do a cigar club here. And you're in Florida, there's a lot you can do. Huge growth potential. It's been in business for 30 years. My favorite part about the deal is the debt. As you know, I'm a huge seller financing guy. I love debt. I love putting deals together. I love structure. This is a deal where you can do that. Seller's really, really, willing to give a great deal here. And I'm going to be going over that after.
Let me show you guys some pictures of the shop before I get into that. The actual shop, we have the room.
Really nice.
And you guys will get this full deck. If you're interested, [clears throat] I'm going to I'm going to show you how to get the full deck and all the information at the end of this. So, stay to this to the end of the video if you're interested. Now, I'm going to get into the fun part. We are going to get into the deal. We're asking $150,000 down payment, 85 Gs. What's left over is $65,000 in a loan. Seller is willing to do it over 18 months. Huge. Huge.
Seller's debt at 18 months is $3,611 a month. It's making $5,000 a month clean absentee. After everything, you're you're left with almost $1,400 a month.
A year, that's 16,000, about 17 grand into your down payment. You're about a 20% cash on cash return. But wait, there's more. Now, let's break this down for a second. If you're paying someone $16 an hour and they're working 40 hours a week like this business, that's $640 a week extra that if you were an owner-operator, you could put in your pocket. What is that per year? That's 30 roughly 33k a year. After everything, you're making $16,668 as an owner-operator and another $33,000, you're looking at about 50 grand a year.
If you add those together, and you're only putting down $85,000 a year. So, you can make your money back in almost a year and a half. This is a phenomenal deal for someone that wants to come in, operate, grow sales, and then instead of a year and a half, it will be a year.
If you are further interested in this deal, Antonio on my team is running with it. I'm going to leave his number here.
9 1 7. Write it nice and big.
3 7 3 6 1 8 4. Everyone, text him, call him, bother him. He's got a lot of businesses for sale, not just this one.
If you want to buy a business, sell a business, reach out to Antonio. His name is Antonio. He's on his honeymoon right now. Reach out to him. He'll love it.
Peace.
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