Hometown Holdco: Geography as Moat

We just haven't put numbers to it, mostly because it's so variable monthly right now. Yeah. And I think, you know, we're only six months in. We have a model that basically points to at the end of the year where we expect our bank account to be and it is much higher than we were expecting, especially after we pay about $220 of debt service per year. 220,000.

220,000, yeah, exactly. We, we figured. Yeah, yeah, yeah. So it's going to be much higher. We don't want to over.

I also think year one SD is gonna be a bit lower because we have put so much back into the business. Renovating, making the place look better. You know, we're, we're, we're, we've invested in extra parking.

We've, we've done, we've done a lot putting it back into the business. But I think steady state will be much, much higher than the $500k we initially planned for going forward. Fantastic guys.

And in circling way back up now to the, the terms of the deal. So it was a 90. What, what was the breakdown of the acquisition price again, please? Yeah, so it was a 20% down payment but on a 1.5x step up.

So 20% down payment, 80% levered, but we own 70% because of that step.

Up and for the investors is great. You know, you give us $100,000, you immediately have $150,000 of, of equity. And we're promising, I don't want to actually promise anything, but we're tracking, we originally promised 12, 13% year over year returns and we're tracking to almost 3.4x that obviously we don't promise anything especially year one because we want to buy back into the business.

But from the investor standpoint, it was kind of a no brainer. They got a local business that's been profitable for 49 years. They're immediately getting a 50% increase on their equity and cash flowing year one.

So yeah, that's, yeah, excellent. And we also had 10% seller financing. No, we, we needed that especially per Matthias.

We didn't have background in, in auto shops so having the owner bought in really helped us with the banks going to pay him off pretty quick, but just having him on, you know, holding paper from him really accelerated. So, so the SBA loan was 70%, he was 10%. And you guys were, you and your investors were 20.

Yeah. Okay. I'd say just one really quick thing that, that was huge unlock for us. We had a big chicken and egg situation where we couldn't really get the loan or the seller to agree to us buy because we didn't have the money in the bank. But we needed to have the, needed to have the deal on the hook to get the money in the bank and that really went back and forth for like three, four months.