intent to buy including realestate

[ajay]

I'm about to make an offer on a Mat which includes Realestate. I would like to know what do I need to have to the contract to protect my interest. Note: I have already looked at their bills, cash flow, etc. In the contract, I will be including a contingency which states that I will shadow the coin collection for atleast 3 weeks prior to buying. I would like to know what else I should be having in the contract. Obviously I will be involving lawyer but want to learn from collective experience what I should include.

tx

ajay

[pete f]

You are really buying 2 seperate things here. A standard real estate contract should be used for the real estate portion, and the business part on another form, or intent offer, that should be contingent on the real estate closing at the same time.
the real estate forms have more about property encroachment, termite, enviromental, etc.
A lawyer or title company will search for a clean title to the property, and the seller should provide you with a title insurance policy, protecting you from further title problems. He has to give a warranty deed, the only way to provide/protect is to buy a title policy with it for you.

Stuff happens. Have a title company close the deal, or a laywer who is providing the title insurance, as many sell it now also.

Back taxes, UCC1 filings, stuff has to be checked out for a clean deed.

In some northern states it is comon to get a lawyers' opinion of title. The insurance is much better, and will last longer than the lawyer.

[Jim]

As Pete said you are buying two different things here....I would use the lawyer for both. Most likely you will not be charged twice by him.

You mentioned: "I will be including a contingency which states that I will shadow the coin collection for atleast 3 weeks prior to buying"

I have never thought that was a good idea because it is too easy to pepper the coin boxes, so honestly it dosn't really prove anything, you gain nothing from doing it.

Obviously, do your due dilgence on the mat and get an apprasial on the building before making an offer. Remember you need to come up with two different prices that you consider fair. If your two prices are not equal or below his asking price be prepared to walk.... Good Luck.

[Gary C]

I have to second Petes and Jims replys and add there is no way I would let someone tag along for three weeks on coin collections. I would ask for schedule c taxes utility bills then hang out for a day or two. Make sure your not over paying for the realestate because it's tied to the laundromat.

Gary

[William]

I differ from the others in that I look at the total package and then pay for the cash flows. I don't care what the real estate vs. the business is worth. I look at them as one package. In general, you will end up paying less using my method.

Of course, when you go to sell the mat, you should convince the buyer to look at them as separate entities!

I would not shadow the collections. You have to assume that the tax returns represent a pessimistic view of the business. Enough said on that!

Good luck!

[BWJR]

Find out the real reason why the seller is selling. Make sure its not a negative reason. Like a big hike in water/sewer bills, or new competition moving into the area. Be careful and through. What about the equipment, age/condition, etc.

Good luck.

BWJR

[Jim]

Originally posted by William
I differ from the others in that I look at the total package and then pay for the cash flows. I don't care what the real estate vs. the business is worth. I look at them as one package. In general, you will end up paying less using my method.

How do you figure your going to pay less? ...the sellers price is his price...it dosn't matter which way you figure it mine or yours ?

The reason I think you need to seperate them is because each is a seperate business...If the mat drops some business, the building income will not be affected you will still be making your rent ...or... if the building loses a tenant it dosn't effect the mats income... Two seperate businesses as far as I can see.

[Anonymous]

BUILDING INSPECTION!!!!! It is worth every cent. If you get a good one they will find almost every problem with the build plus they will make recomendations on things that might become an issue in the near future. I just spent 11,000 fixing up my new mat because I dod not get an inspector.

[pete f]

I forgot about the building inspector part, good point.
rather than shadow a collection for weeks, just get the water bills and see if it looks honest. Then write the Sellers' figure in the clause that states the seller warrants the sales for the last 12 months to be ___x, as part of this agreement. That gives you right to sue later on if a large discrepency turns up.

[Jim]

Originally posted by pete f
Then write the Sellers' figure in the clause that states the seller warrants the sales for the last 12 months to be ___x, as part of this agreement. That gives you right to sue later on if a large discrepency turns up.

Pete...does it actually give you a right to sue or does it just scare the seller into being honest?

and how much is considered a "large discrepency"? Can't the seller just say that you did not run the business properly so you lost money, or the economy was bad, etc..etc..?

[pete f]

Jim, I guess that would be for the court to decide, and the seller to decide what figure he really wants to write down. I tell them point blank in person I will sue them if the number they provide ends up being very different than what I actually take in. So far no problems. Yes, there are all kinds of legal ways around it, from mismanagement to leaking faucets that can be fought in court.

try to keep the seller honest.

[JBTcajun]

Pete
You and I would not be able to do business. It would be like two rams butting heads. I would not sell to you under threat of suit, even it my numbers were correct. As a matter of fact I would have my scum sucker place a clause stating you could not sue for those reasons.

[pete f]

I have sold laundromats using the same form I buy them with.
I have no problem writing down a number that is current.

We could do business on a handshake, you and me. I am sure of that by your postings in general.
I have a good friend, his wife was looking at houses. She was particuarly interested in a develpment, she had her husband take a look. HE checks it out does not like the plans. He asks.. can I change this and that? The builder, sure, whatever you want. He shakes his hand, buddy, you just sold a house. The builder is trying to get forms and BS out, my buddy says, I just shook your hand, your deal is done. The builder never had a deal like that, and my friend went on to add plenty extra to his pocket building that house..
He is Canadain, but I think that could have happen with me here in US.

Trust is evaluated, then maybe earned?