Interested in investing in exchange for equity?

March 29, 2025

by a searcher in Philadelphia, PA, USA

I'm working on acquiring a butcher shop, 5M revenue, 900K SDE, 5.7M ask price, 2.8M of real estate included in deal. Looking for someone interested in investing $200k-$800K for equity in the acquisition.

Rent was taken off from SDE already, DSCR will be 1.6x.

Due diligence not yet started, about to start.

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Reply by a searcher
from Vanderbilt University in Cincinnati, OH, USA

How much equity are you putting in? It seems like you want someone to put in the entire amount. You need to separate the business and the real estate. Doing some quick math, you’re purchasing the business for $2.9MM. Since you’re using SDE, rent isn’t taken out yet. I’ll assume a 10.3% cap rate on $2.8MM which gives me rent of $300k. $900K-$300K=$600K business earnings. $2.9MM/$600K is a SDE purchase price multiple of 4.83x. . That’s assuming you’re running it yourself. Hire a manager for $100K and your multiple is now 5.8x. It’s going to be hard to make money on this deal. I know the real estate is there to potentially help you, but it seems you’re overpaying for the business itself.

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Although we do not do equity, I do know some people that might have an interest. If you need help from a financing perspective, we would love to take a look. You can reach me here or directly at redacted if you would like to discuss options. Thank you.

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