New Deals: A towing company, water sports rental business, and 3 other finds

Sign Up | Podcast | Advertise | Work With Me

NEW DEALS

1/ Real Estate Investor e-Learning Platform

📍 Location: Remote
💰 Asking Price: $5,150,000
💼 EBITDA: $1,091,210
📊 Revenue: $2,055,296
📅 Established: 2018

💭 My 2 Cents: This company specializes in providing digital info products, SaaS subscriptions, and coaching services for real estate investors. I like that they currently have 1,500 paid subscriptions generating recurring monthly income as well as an email list of over 180,000 subscribers. They seem to have their operation down pat as they have created over 500 automations to streamline marketing and fulfillment and produced an extensive catalog of training and coaching materials that will transfer in the sale. Combine those factors with their lean staffing of 6 employees and 2 contractors, and the potential to scale here is huge. They now project to almost double their revenue in both 2024 and 2025 and, considering they have awesome 50%+ profit margins, this could be a real cash producer. While this projected growth is great, I’d need to take a look at their numbers for the last 3 years and understand why they expect revenues to double over the next 2 years. I’d also want to know the breakdown in revenues between their different services and products, how they produce new content, the average acquisition cost and lifetime value of a paid subscriber, how effective they are in converting new unpaid to paid subscribers, and who their key competitors are. Ultimately, real estate is the most common alternative investment, so I think there will continue to be demand here.

2/ Water Sports Rental Business

📍 Location: Fort Myers Beach, Florida
💰 Asking Price: $3,650,000
💼 EBITDA: $1,069,128
📊 Revenue: $1,560,000
📅 Established: N/A

💭 My 2 Cents: There’s no better location for a jet ski, beach chair, and umbrella rental company than Fort Myers Beach, where it’s always beach season. I really like that they hold 4 exclusive required licenses that the city no longer issues, as this basically makes it impossible for other businesses to come in and compete with them. I also like that their main facility is on a resort where rent is paid as a percentage of revenue, meaning there shouldn’t be any surprises in your cost and profit structure (and that your rent goes down in a slower period). Also nice is that the business holds licenses to operate in other locations on the beach, they don’t take cash with the headaches involved (customers pay by phone or online), and there is $500K in equipment that comes with the sale. Given how essential they are, I’d need to know exactly what the licenses do, how they transfer with the business, and who needs to hold them. I’d also want to understand where in addition to the resort location they are currently operating, what leases they hold and their terms, if they have the space to expand, and what the plans are for development in the area that might bring more customers. I’d finally be curious what competition that might face, especially for jet skis, in other locations in the larger local area.

3/ Luxury Medspa Chain

📍 Location: New York City, New York
💰 Asking Price: $3,500,000
💼 EBITDA: $1,190,000
📊 Revenue: $2,760,000
📅 Established: N/A

💭 My 2 Cents: There are many medical spas in NYC, and that’s because they can be very profitable businesses. I like that this one is including $1M of FF&E in the deal and has likely already made significant investments in equipment and facilities. Ultimately, the success of medical spas comes down to their level of traffic and visibility—in a word, location. So, I’d need to know this chain’s different locations and how successful each is. Then, I’d want to know each location’s lease, equipment, and services offered, the breakdown of costs and revenue, the different roles of their 17 employees, what training and licensing are required, and how challenging it is to find new staff as needed. Finally, I’d want to know their marketing and sales plan, how they acquire new clients, and whether their income comes more from private payments or insurance. Finding the right spot in NYC can be very difficult, so if these spas are truly in premium locations and are leased at reasonable rates, a new owner could be coming into a very nice situation.

4/ Towing Company

📍 Location: North Carolina
💰 Asking Price: $6,800,000
💼 EBITDA: $1,500,000
📊 Revenue: $3,963,053
📅 Established: 1995

💭 My 2 Cents: This company offers a range of towing and roadside assistance services for all types of private and commercial vehicles. They work predominantly by request and have contracts with a number of state and local transportation, fire, and police departments. They do no predatory towing, and they pride themselves on their positive reputation. I really like this type of unsexy but necessary business, but it can be hard to differentiate yourself in the towing industry. You’re basically buying your customers' confidence, which this company has based on their long history and stellar reputation. Other real positives are their experienced team and that the sale includes $6.325M in high-quality trucks with their value almost equaling the purchase price, although I’d need to verify its value and condition. I’d also want to understand how their contacts with state and local agencies work, if these involve any recurring business and revenue, how customers in need of their services contact them, how they market themselves to the general public, and who their main competition is. Assuming their stock of trucks is as advertised, this looks like a very attractive deal.

5/ Van Rental Business

📍 Location: Dallas, Texas
💰 Asking Price: N/A
💼 EBITDA: $762,025
📊 Revenue: $1,435,077
📅 Established: 2009

💭 My 2 Cents: This boutique rental company provides multi-passenger vans for clients from vacationing families to churches. The van rental space is very competitive and this company relies on their high quality customer service to differentiate themselves. They have a solid track record, with over 1,600 rentals ranging from a few days to much longer periods (3 years for one specific client) in 2023. While 1,600 is an impressive number, I’d want to check on possible client concentration issues as their top 10 customers account for 65% of their revenue, with their largest customer (a private school) representing 6.7% of sales. I like that this business comes with a general manager who holds all the necessary licenses, though I’d want to confirm their long-term availability. Considering that the sale includes $2M in FF&E, I’d also need to really look into the specific details of their fleet, to include its age, value, useful life, service history, and the deals they have with vendors for maintaining and replacing the vehicles. More broadly, I’d want to know what their normal utilization rate is and if they go through busier and slower periods, how predictable their revenues are, the max amount of revenue they could generate from their current staff and equipment, who their main competitors are, and if they compete more on price or customer service. I’d also be curious as to their marketing and sales plan, what type of digital presence they have, and what their online ratings are like. Assuming the value of their fleet and ratings check out, this is an appealing opportunity. While there isn’t much standing in the way of new entrants, this also means there’s nothing keeping a new owner from expanding into new areas and markets.