Advice Buying A Auto Repair Shop

[Chris Hamrick]

Hi everyone,

Does anyone have experience buying existing businesses? What are some things I should look for? Here are my concerns:

- Providing false records of income. The thing about this business I can look in their parking lot and gauge how much business they may get, but still want to be as accurate as possible.

- Providing false expenses. I can look up what I can for property taxes I'd think, but my concern is, payroll and utilities and supplies may be doctored.

- I have no idea how to really assess the value. I assume they're lying when they mention the NOI so I deduct 25% from what they say the average is. Again, based on the size of the shop and we've been monitoring secretly how many cars go in and out so we can estimate how much they earn.

- The broker wants me to sign an NDA before giving me ANY information. I just asked what the cap rate was and he responded "Sign the NDA". Sign the NDA for things that should've been mentioned in the marketing brochure? Hmm. 

- Is there any type of commercial loan calculator? They're asking 15 million and I have no idea what that type of loan looks like. I'm mulling in my mind how to get the deal 100% financed. The business comes with the real estate which is 30,000 square feet in a major city. My thought is to use the real estate as collateral to get favorable terms. Also since it comes with the real estate I have flexibility in what the business pays in rent.

Thanks in advance!