Comparing two business investment optionsfrom @douggrindstaff

Transcript

Your estranged rich uncle dies and leaves you 2 and a half million dollars. Do you buy a 3,000 porta potty business or a 70 bed assisted living center? Let's do the math. There's a porta potty and dumpster rental business for sale in Florida. They're asking $15,000,000 on 8 and a half million revenue and 2 and a half million in profit. They own 3,000 portable toilets, a 150 roll off dumpsters, and 31 trucks, all for a combined asset value of 5,000,000, which means you can finance a big portion of the acquisition with equipment loans. Now the listing says absentee potential, which is a clever way of saying that the owner works about sixty hours a week. So we're gonna offer him 13,000,000. If you put down your 2 and a half million, here's the rest of the capital stack. Total annual debt service comes out to about 1,600,000, which leaves you about $826,000 in profit after you pay your debt. Alright. Let's see how the senior care center looks. Here's a 70 bed assisted living center in Tampa. They're asking about 12,700,000 based on 1,800,000 in profits. So you can put down your 2 and a half million and finance the rest on a twenty five year loan, which makes your annual debt payment about 900,000 and leaves you about 900,000 in profit after debt service. And here's the wild part. For every 10 assisted living beds that get built, 27 seniors age into needing one. And I have to imagine Florida's a good market for it. Okay. So which one am I taking? It's a close fight, but I'm going with the assisted living center. The demographics make sense. The real estate should appreciate, and you have a clear path to growth in that market. Follow-up more.