Down Payment on laundromat and financing

[coinlaundry_113]

I have a buyer want to buy my Laundromat my broker wants to accept an offer of down payment of 50K of 260k of asking price which is less than 25%, and I will finance the rest of it. This is enough as a down payment or look for some one wants to buy it with full price, what is the good and bad about financing. Thanks

[JimG17]

Seems low to me. In essense, you remain the silent partner (and majority investor) in the business while they take over day-to-day operations. If this is someone you have absolute confidence in (relative, friend, etc.), or if you've done a complete background/credit check (like the banker you're becoming) and their credentials are impeccable, you might take the chance.

If they aren't successful, for whatever reason, you may find you have to step back into the business and take it back over. You'll have their $50k in your pocket (plus whatever payments they made), but what might they have done to the business in the meantime?

[DuboisLaundry]

I think 25% is too low
While I've never sold a mat, and only bought one
1/2 down, seller carries the other 1/2 seemed comfortable for us. I didn't try to offer a smaller down

[Kard]

I am looking to purchase a mat. It costs $250K and there is some owner financing. I was hoping for me to come up with 20%- finance 20% from the owner and have a bank loan for the rest. Is this unreasonable?

[petefritz]

How do you intend to make the payments if you finance 80%?
I am not sure you would have enough cash flow, better look at note payments very close. Plan on a 5 year loan, you won't get much more, though you may get 7 years on the equipment part if your credit and net worth are outstanding and you have other assets you can pledge.

[coinlaundry_113]

How, Did you figure out the payments and down payments, this person has only 50k, and the monthly payment around $1190 for 7 years baloon with 6% interest . total sell price $240000
if this is not making sence?
what is the monthly payment should be and the contract?

Thanks

[phantom]

i went to purchase a mat in early 2003 and i was going to finance almost 200,000 , but as it stood i would make no money at all , because of the note, and i was going to go interest only! i had to pass it up , until i had more money to lay out. the less you have to finance the better. youll be happier in the end. between the utilities , rent, repairs, etc, thats one less headache youll have.

[amartlock]

I view things a little differently from an investment perspective. I purchased my first mat several months ago using a bank loan for 50% and the other 50% from a home equity loan, effectively financing 100% of the purchase. The monthly cash flow goes entirely to pay operating expenses and debt payments (nothing left over for my pockets). My goal is then to have this paid off in 7-10 years, depending on future equipment purchases. At that point I will have effectively purchased the mat with none of my own money, just the blood, sweat and tears from ownership.