Liquor store- good investment?

Assuming inventory and FF&E are fair market value, you'll be paying 95K for the EBITA. 2X EBITDA is an attractive metric in just about any industry. If there is opportunity to cut expenses, or if current owner is running a lot of personal expenses that would cease, this could be a very attractive venture.

One recommendation I would like to offer is to require seller pay off all debt at closing or reduce cash payment by amount of debt assumption.

I strictly base this off the limited information provided so take it with a grain of salt.

That’s kind of what I was thinking. You’re only making $50,000 and have all the risk.

I would not want to own any convenience store. Chance of armed robbery is high.

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don't know where in the world the revenue is going?

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COGS probably

In NJ seems hard for smaller places to compete on price due to rips

You will get liquor license? Also in NJ debt follows that license

How long has current inventory been sitting. Could be 150k worth of shelf turds

I’d think their margin is somewhere between 18-25%. I know 24 packs are almost 50% markup. That said, on 900k rev you’re looking at 700-750k in COGS. I’d be interested in understanding more about the SG&A. Could be a glaring issue or cost that is driving the earnings down that is easily fixable.

If you have more details you could share without breaching a NDA, we can give more advice but based on this alone - no way I’d jump on that.

I’ve thought about asking this question on here multiple times.

Why do all of these Indians open convenience stores? Do they know something we don’t? Why convenience stores? How do they learn American business so quickly and courageously?

They get favorable ‘minority’ loans

They pool their money together

They only employ family members so overhead is low

If there is 5 of them they all work until they can get the next guy a store then the next guy then the next guy then when all of them have one store they start getting everybody a second store etc. it’s a cycle they will repeat as many times as they can.

A notable poster on this board was an expert on convenience stores. IDK if he is currently banned or not.

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So the business breaks even give or take and the owner pays themself 50k? Did you miss a zero? That is a terrible idea given you have to be open 6 days a week and 8-10 hours.

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Assuming the owner pays himself a salary, that would not be part of EBITDA. The EBITDA would be after salaries - including the owner's.

How much salary the owner is paying himself, or other family members, plus any other personal expenses ran through the business, is crucial to know to get an accurate picture.