dnjplus6

We have a chance to buy a 2400 sq. ft building in the center of a town of 6000 with another 20,000 living rural within 10 miles. The town has no other tanning beds, just 2 hair salons and other normal small town businesses.

The property is bank-owned and used to be occupied by a 5 bed tanning salon and 16 machine coin-op laundry. It all closed 14 months ago, very abruptly. It was successful, but the owner got overcommitted on other business ventures and lost it all.We have seen his books and talked to the manager who used to run it. (The owner was absentee). She agrees that it was a good business, but could be better with the right owners.

Here's where we come in: I am a firefighter with plenty of time off to maintain the business. My wife plans to run the business end of things as well as run the shop. The building alone was purchased for 125k BEFORE the previous owner rehabbed the building and added all the equipment for the tanning and laundry. I believe we can buy the whole thing for under 125k.

We could basically turn on the lights and go. The place looks like it did the day it closed. Tropical theme in the tanning with 5 tanning rooms. There are 4 Wolff zx32 Sunstar beds and 1 Wolff 423F Solaris bed.

The laundry is nicely separated form the tanning side and offers is cash flow during the slow season for tanning. We know we are going to have to hire some help, but that cost will be pretty low due to our availablility and that of our teenage kids. We plan to add a nail tech and whatever is "New" to the tanning industry.

We have always been hard workers and have run several businesses from raising cattle to rehabbing property. Are we nuts for starting this business venture ??!!

MicroSpa

First, that's what they all say. "Other" Committments forced them to close. Question, why would anyone close a business that's generating positive cash flow? It wouldn't happen.

Second: The contents are worth virtually nothing at the end of the day so you should be looking squarely at the commercial building value, period.

Lastly: 125k sounds relatively inexpensive for a commercial building but there are so many unknowns. Have you had it inspected? If it's bank owned, you may be able to get it for much less. No one here can tell you if it's a good deal or not as there is just too many variables.

Talk to a professional commercial realestate attorney and have the building inspected.

Read through these forums for all of the new business questions. Busy season is right around the corner and by the time this is done, busy season will be over. You don't want to open in slow season. Find a mentor and talk the business through with them.

Your best bet, if everything makes sense, is to open Nov/Dec of this year.

Good Luck

dnjplus6

Thanks for the quick response. The previous owner had 4 tanning/laundry facilities and lost all 4 plus his contracing business when the market went flat. I also know that he built his 4th store on credit cards !! Not smart.

I have been watching this forum and coinwash.com. I have learned a lot in the past year by just watching/reading. We are having the building and its contents inspected. We are also fortunate enough to have lived here a long time and know the history of the building and the people around here. The bank is asking 160k. but we feel we can get it for the sales price in the 90's of 125k, maybe less.

I do realize the busy season will be over before we get this done. Our hope is that the laundromat side will carry forward till fall. According to his books and a previous manager, each side makes about the same.

Keep the comments coming !!

Dee2711

Maybe i'm not reading this correctly, but who actually owns the beds? Do the bank own them? Or the previous owner who just hasn't moved them out yet?

Could be abit of a shock if say he turns up in 6 months demanding his beds back! Stranger things have happened in the past

dnjplus6

The bank has ownership of the building and all the contents. They had a loan on the property and a separate one on his equipment.

We sent a lowball offer today! Unfortunantely, it is contingent on us selling our latest investment prop. (which has a couple very interested parties)

Keeping the faith !!

dnjplus6

Well, the bank took our offer and we close on/before April 16. We basically got the building, 5 beds, and a full 20 machine coin-op laundry for 20k less than building appraisal. This is the only tanning and/or laundry in 12 miles !!

Working to re-lamp all beds and even upgrade 1 of the 4 20 minute beds to either match or exceed our 15 min Solaris 423. Any thoughts ?

Any reps looking at this post, please pm us with your info so we can price lamps. We have one local rep, but we think he might be a little high on his quote. We need lamps, lotion, eye pro, towels, etc.