Hometown Holdco: Geography as Moat

So yeah, just going to. We had an advisor who kind of, we serendipitously met and he ended up being an investor in the shop.

But he very objectively put it, would you rather make 500k on a $1.5 million asset or 300k on a $5 million asset. It's not, when you put it that objectively, obviously there's some work into business ownership. But if, if you, we can really do what we say we're going to do and implement these systems and make the business relatively hands off, then yeah, we take that all day.

So. And same thing with Sarah. So we didn't have the capital just to put down a down payment because we wanted to. We also, you know, didn't have money from, from our families really.

They helped, they might give me 10k to help with some lawyer fees at the beginning that was, that was really it as an investor. But we didn't have just the money in our bank to take a shot on the real estate. We had to be really targeted with where we were deploying our capital and then also where we were lever, you know, leveraging ourselves.

Yeah. Did you guys entertain a sale leaseback? I'm curious.

We did. I think it was important for us. I mean really the vision was like, okay, we'll buy the business, we'll stack, you know, our, stack some cash in the next two to three years and buy the real estate. And we're hoping that plays out.

We didn't think that the former business owner would list the property, you know, publicly, which it is now we have photographers coming today, unfortunately for them to list it. But I think that at the end of the day he's asking too much and we're going to stick to our guns and say this is what we think it's worth and give us a call when inevitably you don't sell it.

So you considered a sale leaseback and then didn't pursue that very far because ultimately you do want to own the real estate. The numbers of the business, please. Yeah, so it was originally we got the purchase price down from 2.1 to about 1.5, which was a 3x multiple, is making about 500,000 in SDE pretty consistently. It was actually like 475,000 but roughly 500.

And since then we've only had it for six months. But we're definitely on track to, to, you know, substantially increase those SD and revenue numbers. Oh, it does. It does 2.6 in top line revenue.

I think we're, we're well on track to go a few hundred thousand past three million this year.

Fantastic. Yeah, we, we, we bought it at 1.5 but then we raised money at a 1.72 million project cost. You know, that include working capital, closing costs, etc. How much working capital did you put?