10h • General discussion
We Put This Deal Under Contract. Here’s Why.
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.
Any investor ultimately participating will be required to complete accredited investor verification, consistent with Rule 506(c). SEC
The Questions → The Underwriting → The Offer → The Decision
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We Put This Deal Under Contract. Here’s Why.
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