How do you evaluate a commercial real estate/business in operati

Question

Team

I have a couple looking to sell their Assistant Living Business. I am not sure where to start. Is there some sort of checklist or "how to" to determine the business worth?

Thanks

Christian

Tyler Sample · Answer

I would see if you can do an EBITDA analysis. Expenses Before Interest, Taxes, Depreciation, Ammortization. There is such thing as an "EBITDA number" or "factor". This will give you a snapshot of the business overall and you will be able to easily determine the businesses' true worth!

Justice Jacobs · Answer

@Christian Wamsley Do you have more information on the property and/or business? I could go over some things with you that we have looked for in the past when acquiring an ALF/PCH.

@Al  Thank you for the mention!

@Al Boettgerundefined

Al Boettger · Answer

Suggest you connect with Justice Jacobs, here on BP.  He is an operator in GA, and maybe able to give you some info about ALF/ALR's.

John M. · Answer

Both are evaluated based on income. Traditional small businesses sell at 2-3 times cash flow.  Larger businesses can have a multiple of 7 or higher. There are business evaluation companies you can pay to evaluate its worth.

Sergey A. Petrov · Answer

there is the business and there is the property. they are a beast of their own when merged together but very lucrative as long as someone knows what they are doing!