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Purchase value on NOI of Service Company

 
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Purchase value on NOI of Service Company - 10/26/2008 7:07:18 PM   
bourbonman1

 

Posts: 1
Joined: 10/26/2008
Status: offline
I am looking to purchase a service type business. Long history and well established. Income and NOI have improved steadily the past 5 years. All equipment is owned with no leases and no debt. The seller is looking for about 7 times NOI. I can get 100% financing between bank and seller.

Thoughts/advice?
Post #: 1
RE: Purchase value on NOI of Service Company - 2/18/2009 5:28:10 PM   
jfslenes

 

Posts: 1
Joined: 3/2/2008
From: Albuquerque/Taos
Status: offline
That's about 14.3% cap rate. If that inludes paying you to manage, operate, work the business, I'd say it's on the overpriced side for just the business itself. If there is RE included, it may be OK. If you earn added $$$ for your personal work efforts in addition to the biz profits, perhaps it's closer to the right value. If the biz requires little management and almost operates itself (wishful thinking, maybe stinkin' thinkin'), it might even be good. Besh wishes for this or any other endeavor.

(in reply to bourbonman1)
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