How to Structure Around Risk in a $250k SDE Acquisition

So we had a relationship as well. I feel like he respected me. I certainly respected him. And so that helped kind of pave the way for that.

So let's talk for just a sec about the earnings. So 250,000 of earnings. That's. That's not a lot. That a lot. And a lot of that is going to be eaten up by the seller note which you have deferred, you have on standby. So that's good.

By the way, what were the terms of the seller note other than the standby?

4% for five years. That was another concession.

Concession. Well, the, the five years is standard except when compared to an SBA, which is 10. And that, that's pretty amazing amortization. So it's not as good as the 10, but that 4% sure is good.

So, so anyway that, so that's great. The. But your 250, when, when that note come, starts coming due, that's going to eat into that. How did you think about basically your own take home and kind of what's the family financial picture look like?

San Diego is an expensive market, high cost of living area. How did you think through your own take home?

Yeah, I think the seller note does eat into it. The rent also eats into it. So one thing I didn't mention is that he also owns the building that the office is in.

And so that was part of our, part of our deal that I would sign a lease for this, for this space for two years. So between that and the seller note, it does eat up a good amount of the existing sde. And that was the SDE on the work in progress that I didn't even have.

There's a lot of assumptions baked in there that I can grow the business and build the business in order to be able to afford those things. I think I'm looking at, I'm bullish on my ability to grow and run the business based on my experience and what I've done in the past. I also, you know, am looking at San Diego, Southern California as a market.

There is always and will always be a housing density challenge here that we, you know, there are more people that want to live here, especially in San Diego. There are more people that want to live here than can afford to live here. There are more people than there are housing units.