Invest a loan of $100,000 in auto workshop?

Question

I know a person who owns a auto workshop and he wants to sell his business because he says he has worked hard a lot and now want to rest. I can t and don;t want to work myself at auto work shop. He said that if I hired staff to work there I could save $4000 to 5000 per month. What do you think about the idea of...

Answer 1

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Answer 2

If it is such a good idea why is this seller not doing what he suggests himself.

Answer 3

You will lose your money. With luck, you won't be able to GET the loan, and that will save you. It was a bad idea when you posted it several days ago, and the added info in this post makes it even worse.

Answer 4

Do you think the reason he is making 4-5K per month (if he even is, you don't seem to have verified anything) is that he is working and making many of the repairs and helping customers and doing whatever and that were he to move on then maybe these services would fall by the wayside and suddenly the place is losing money.

For you to assume a mechanic will do all this and do a great job of it and there will still be 4-5K left over for you in extremely naive. If this were the case then why is he so tired of the business - if all he had to do was hang out at home and relax and collect 4-5k per month from a mechanic doing everything then why even sell and for a really low price (50k per year on 100k in is a 50% return on your money - that probably isn't happening unless its a job you work at every day and the 50k is really a salary).

I would just pass on this one, you don't know what you are doing, probably can't get the money anyhow and would probably either find this to be full time job or a huge money loser if you did somehow follow through on it.

Answer 5

You have NO idea of what you are getting into. It's a very good way to lose every penny of your investment. Don't do it.

Answer 6

The plan is weak. Generally, I wouldn't invest in a business that I don't know, myself. That would be a non-starter right there.

If I did know the business, I would want to know the costs associated with the business - taxes, insurance, government fees, energy and water bills. How much does it cost per month if the place sits idle? I would like to know the historical income of the shop for the past few years. Do customers come because they like this particular mechanic? What if you can't get one who is as popular? For that matter, what if you can't get a mechanic that is willing to guarantee you $4k or whatever per month? What is plan B if you do sign someone on, and the whole shop only brings in $3k per month the first few months? Or even $5k? The fool who signed on cannot be expected to stick around.

It also seems that the present owner wanted to rest they could hire his own staff, then sit back with a guaranteed $4k income per month, in a business he understands. It could be that all the good mechanics want guaranteed pay for their hours, not subject to the whims of the business.

Answer 7

This does not look like a good idea to me.

Answer 8

repeated question ...........................................