Friday's AON Live Deal Review is going to be different. Instead of reviewing someone else's listing, we're opening up one of our own transactions. G1C Group Holdings has Cougar Ridge Car Wash in Waco, Texas under contract, and many of the issues we discuss in these Live Deal Reviews have been part of the actual acquisition process. The property combines four self service bays with a relatively new WashWorld Razor Edge touchless automatic system on approximately 0.55 acres. What interested us wasn't that the existing operation was perfect. It clearly wasn't. The question was whether the underlying asset could be acquired at a basis that left enough room to stabilize the business rather than paying the seller today for performance that doesn't yet exist. Our answer ultimately led to $315,000 of seller consideration plus a $125,000 buyer controlled stabilization reserve, for approximately $440,000 in aggregate transaction funding. The distinction between those two numbers matters. The $125,000 isn't additional money going into the seller's pocket. It is capital intended to remain available for stabilization and approved post closing needs. Our diligence has reinforced why that reserve matters. This is not currently a business we'd characterize as stabilized passive cash flow. We're buying an operating asset that will require execution after closing, and we're underwriting it accordingly. So here's the AON challenge: If you were stepping into this transaction with us, what would you need to see in the stabilization plan before you were comfortable with the acquisition? Think beyond the purchase price. What would you want to know about equipment uptime, customer volume, operating expenses, working capital, competition and the underlying real estate before making the final decision? There is also a real investment component to this Live Deal Review. G1C expects to make a portion of the opportunity available to accredited investors under Rule 506(c). If you're an accredited investor and have an interest in participating alongside us, message me privately and we'll provide additional information regarding the opportunity and next steps.

Today's edition of The Acquisition Brief continues our conversation about what it really takes to evaluate and acquire a business with confidence. One of the most important lessons in acquisition entrepreneurship is that an attractive opportunity and an attractive acquisition aren't necessarily the same thing. The difference often comes down to the quality of our underwriting, the assumptions we're willing to challenge, and whether the transaction leaves enough room for the buyer to execute successfully. As you read today's brief, think about how these considerations apply to the opportunities you're currently evaluating. Where do you see buyers making the biggest mistakes, and what would you do differently? I'd be interested in hearing your perspective in the comments. https://g1cgrp.com/g1c-insights/f/the-revenue-you-buy-isnt-always-the-revenue-you-keep

100% Leased. 7% Cap Rate. But How Durable Is the Income? A fully occupied medical office building with established tenants, a location adjacent to a hospital, and an advertised 7% cap rate has several characteristics we would normally want to see in an income producing acquisition. For todays AON Live Deal Review, were looking at 130 Medical Center Parkway in Huntsville, Texas, a 17,081 square foot medical office building offered at $3.5 million. The property is 100% leased, sits on 2.23 acres, and is being marketed as a stable cash flowing healthcare asset. The temptation would be to look at the occupancy and cap rate and conclude that much of the underwriting has already been done for us. It hasnt. A building can be 100% occupied today and still carry meaningful rollover risk. Before deciding whether the 7% return adequately compensates us, wed want to see the tenant by tenant rent roll, lease expiration schedule, renewal options, contractual increases, tenant credit, landlord obligations and any near term capital requirements. We'd also want to know the weighted average lease term. If several tenants expire within a relatively short period, 100% occupancy today could look very different a few years after closing. If the leases are staggered, the tenants are strong and renewal history is good, the same headline numbers could tell a much more compelling story. Thats the distinction were looking for in this deal. Occupancy tells us how full the building is today. The leases tell us how durable the income may be tomorrow. So how would you approach it? Is 100% occupancy and a 7% advertised cap rate enough to move this into serious underwriting, or would the lease schedule determine whether you go any further? The Questions → The Underwriting → The Offer → The Decision If these are the kinds of acquisition conversations that interest you, wed love to have you join us.

A Dollar General with a 7.50% cap rate, a $600,000 asking price, and more than 20 years of operating history at the same location would normally get our attention. The corporate guarantee and double net lease make the income stream even more interesting. But there is another number that matters just as much as the cap rate: only 2.3 years remain on the lease. For todays AON Live Deal Review, were looking at an 8,125-square-foot Dollar General in Hereford, Texas. The property is being offered at $600,000 with $45,000 of NOI, producing the advertised 7.50% cap rate. The current economics are easy enough to understand. The more important question is what happens after those 2.3 years. Before deciding what we would pay, wed want to understand Dollar Generals renewal options, the likelihood of the tenant remaining at this location, what rent could look like upon renewal, and what obligations might shift back to the landlord. Wed also want to understand the propertys economics without Dollar General, because that tells us something very different about the residual value were actually buying. That is what makes this deal interesting. Were not simply deciding whether a 7.50% cap rate is attractive. Were deciding whether that return adequately compensates us for a significant lease rollover arriving relatively soon after acquisition. More than 20 years at the location certainly gives us useful history, but history isnt a renewal commitment. So how would you approach it? Would you be comfortable paying $600,000 for the existing income stream, or would the approaching lease expiration need to be reflected in your offer? The Questions → The Underwriting → The Offer → The Decision

Here's our Friday Live Deal Review. We're looking at a 5,000 SF office/warehouse in Temple, Texas offered at $525,000. There are two 2,500-SF sides. One is leased. One is vacant. The listing advertises a 7.98% cap rate, but there's an important qualifier: its financial summary is identified as 2027 pro forma. So here's today's challenge: Are we buying an income-producing property at a 7.98% cap rate, or underwriting a lease-up that still has to happen? Before deciding whether $525,000 works, what would you request from the broker? And more importantly, would you value the vacant half based on the income it could eventually produce, or require the seller's price to reflect the vacancy that exists today? Let's underwrite what we actually own on Day 1 before giving ourselves credit for what might happen on Day 365. The Questions → The Underwriting → The Offer → The Decision