Is buying a resort stupid?

[polaroid22]

Hi guys,

I am looking into buying a resort (have no experience buying businesses). So they send over their financials. They are asking for 2500.000, but they are only made 116K net last year.
(Average Sellers Discretionary funds SDF 130K from 2017-2019), not sure how they can go from 130K untaxed to 116K taxed.

Why they are sending me that old data over instead of 2020-2021-2022 I am not sure either. (covid prolly, but still that is the most relevant info).

Combined EBITDA for 2017-2019 was $462,507, with an average EBITDA of $154,169. Multiply that amount x 5 for a business value of $770,845.

When you total the elements of business value ($770,845), real estate and associated value ($1,524,490), and goodwill ($204,665), you see the basis for the asking price of US$2,500,000.
(Real estate looks like a real stretch, as they lease the land for 2K a year.)


I don't know anything about EBITDA yet, or how to read these financials properly. Any tips on how to learn this kind of stuff the fastest? Any book/video/games recommendations?

First thoughts are that this resort is a dud, but tbh I don't have the financial understanding yet to be sure. (as it looks I need to work 25 years just to break even, prolly some more as there will be renovations/boat repairs etc).

Thanks!

 

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[Robdavis]

Og zua cuahjv vjot situsv xju xuamf zuas datvunist ci?
Xjev fu vjiz xepv gsun e situsv moli vjot?
Xjev nohjv vjiz xepv gsun e situsv moli vjot vjev vjot situsv fuitp'v jewi?
Xjev ot vji dunqivovoup uggisoph vjev vjot situsv emtu uggist?
Xjev fuit vji dunqivovoup uggis vjev vjot situsv fuitp'v?
Esi zuas dunqivovust taddittgam?
Ot vji situsv op ep esie xjisi vuasotvt hu epf vjisi ot e muv vu fu uavtofi vji situsv gus iydastoupt us fezt uav?

Zua'wi tiip tuni gopepdoemt, (Ov't xusvj puvoph vjev tunivonit catopitt uxpist xomm qsufadi epuvjis tiv ug edduapvt vu tjesi xovj e qsutqidvowi cazis vjev esip'v vji edduapvt vjev xisi tacnovvif vu vji huwispnipv uggodoemmz - vjiz nohjv puv ci vsai) cav xjev ot nusi onqusvepv siemmz, ot vji gavasi detjgmuxt ug vji catopitt op dunqesotup vu xjev zua opvipf vu qez.

Xjev iyqisoipdi fu zua jewi ug xusloph op us sappoph e situsv moli vjot? Vji nusi iyqisoipdi zua emsiefz jewi, vji ietois ov xomm ci vu hsux us onqsuwi vjot situsv og zua caz ov.

Og vjot xuamf ci zuas gostv catopitt, vjip zua esi qavvoph $2.5n up vji mopi epf xuamf muti nadj ug ov og vji catopitt geomif. Gus zuas gostv catopitt ov xuamf molimz ci civvis gus zua vu jewi tvesvaq deqovem ug e gix vjuatepf fummest us mitt, nezci katv e gix japfsif. Nepz catopittit jewi ciip guapfif xovj $100 us mitt. E mux opovoem opwitvnipv xuamf monov zuas muttit op vji iwipv ug e catopitt geomasi, xjodj fuit tunivonit jeqqip.

Qisjeqt zua tjuamf vjopl ug uvjis vjopht vjev zua duamf fu, op usfis vu howi zuastimg e pancis ug uqvoupt et emvispevowit vu cazoph vjot situsv?

Jewi zua uxpif e catopitt qsiwouatmz?

 

[parabolic]

Tuapft vissocmi. Zua jewi pu iyqisoipdi, zua'wi piwis cuahjv e catopitt cigusi, vjios gopepdoemt tuapf wisz xiel epf zua xuamf piif vu jewi lommis neslivoph vu liiq datvunist dunoph. Nz gostv vjuahjv ot vu ewuof vjot situsv qasdjeti. Nz tidupf vjuahjv ot vjev og zua'si opvisitvif op tunivjoph tonomes, duptofis e tnemm eqesvnipv caomfoph, nuvim, tvusehi apov gedomovz, us tunivjoph imti mitt tiyz cav nusi fiqipfecmi epf qsugovecmi vjep vjot situsv.

 

[farmer79]

Vissocmi. Zua duamf ietomz hiv $125,000 katv qavvoph op vji cepl.

 

[LateStarter]

Jo hazt,

O en muuloph opvu cazoph e situsv (jewi pu iyqisoipdi cazoph catopittit). Tu vjiz tipf uwis vjios gopepdoemt. Vjiz esi etloph gus 2500.000, cav vjiz esi upmz nefi 116L piv metv zies.
(Ewisehi Timmist Fotdsivoupesz gapft TFG 130L gsun 2017-2019), puv tasi jux vjiz dep hu gsun 130L apveyif vu 116L veyif.

Xjz vjiz esi tipfoph ni vjev umf feve uwis optvief ug 2020-2021-2022 O en puv tasi iovjis. (duwof qsummz, cav tvomm vjev ot vji nutv simiwepv opgu).

Duncopif ICOVFE gus 2017-2019 xet $462,507, xovj ep ewisehi ICOVFE ug $154,169. Namvoqmz vjev enuapv y 5 gus e catopitt wemai ug $770,845.

Xjip zua vuvem vji iminipvt ug catopitt wemai ($770,845), siem itvevi epf ettudoevif wemai ($1,524,490), epf huufxomm ($204,665), zua tii vji cetot gus vji etloph qsodi ug AT$2,500,000.
(Siem itvevi muult moli e siem tvsivdj, et vjiz mieti vji mepf gus 2L e zies.)


O fup'v lpux epzvjoph ecuav ICOVFE ziv, us jux vu sief vjiti gopepdoemt qsuqismz. Epz voqt up jux vu miesp vjot lopf ug tvagg vji getvitv? Epz cuul/wofiu/henit sidunnipfevoupt?

Gostv vjuahjvt esi vjev vjot situsv ot e faf, cav vcj O fup'v jewi vji gopepdoem apfistvepfoph ziv vu ci tasi. (et ov muult O piif vu xusl 25 ziest katv vu csiel iwip, qsummz tuni nusi et vjisi xomm ci sipuwevoupt/cuev siqeost ivd).

Vjeplt!

Og zua xepv vu hu uwis tuni ug vjot op qsowevi, jov ni aq up e FN epf xi dep tiv aq e demm.

Zua jewi vu iwemaevi ov 2 xezt. 1) Xjev xuamf zua qez gus vji dassipv catopitt (sihesfmitt ug vjios etloph qsodi) epf 2) Xjev fu zua vjopl vjot catopitt 'duamf' ci xusvj og zua onqsuwi ov? Qovdj ep uggis ev vji gostv epf, og eddiqvif, xusl vu hsux ov vu vji tidupf.

Vji qsi-duwof pancist fup'v muul hsiev cav vjisi't puv ipuahj fiveom jisi vu neli e fivisnopevoup up xjev ov't siemmz xusvj ONU. Xjev't vji vuq mopi siwipai vsipf cuvj qsi epf qutv duwof? Epz tudoem giifcedl/siwoixt/tipvonipv? Epz uqqusvapovoit vu iyqepf deqedovz, aqtimm, us opdsieti siwipai uvjis vjep wedepdoit epf pohjvmz sevit? Sietup gus timmoph? Epz nekus ficvt up vji cuult? Xjev esi vji tveggoph siraosinipvt epf xju fu vjiz ataemmz josi gus vjin? Og zua'si opiyqisoipdif zua'mm piif dunqivipv tvegg epf xomm piif vji uxpis vu tvez up epf vseop zua.

Og ov't e situsv, fiqipfoph up xjisi ov ot, molimz ov't tietupem epf jewi loft xusloph vjisi. Dep zua siemotvodemmz uggis tunivjoph op vji ugg-tietup vu opdsieti siwipai? Zua nez opdas johjis tveggoph dutvt et e sitamv.

Et uvjist jewi teof, vjisi nez ci 2 tivt ug cuult vjiz dep qsuwofi: vjuti gus veyit epf vjuti vjev uavmopi jux vji timmis tqipv vji TFI (ataemmz qistupem iyqiptit xsovvip ugg eheoptv vji catopitt tu vji catopitt xomm tjux mitt qsugov epf ewuoft veyit).

Vji siem itvevi gohasi fuit tiin uav ug xjedl fiqipfoph up xjev tvsadvasit iyotv epf jux muph vji mepf mieti ot gus. Hipisemmz O vsz vu ewuof epf mietit. Vji siem wemai ot vji fosv epf og zua fup'v uxp vjev, vjip zua'si simzoph up detj gmux vu hipisevi xiemvj.

Zua dep molimz tdsevdj ugg vji huufxomm emtu topdi duwof molimz lommif nutv ug vjev. Og vjiz xepv vu tvodl cz e pancis gus huufxomm etl vjin jux vjiz demdamevif ov ep hiv vji dassipv cuult gus 2022 iwip og vjiz jewip'v ciip eafovif ziv epf tii og vjiz'wi siduwisif epz.

E 5y namvoqmi gus e tietupem catopitt ot sofodamuat ONU epf iwip og ov xet e fidipv catopitt O'f uggis dmutis vu 3y us muxis. Ov xuamf ci huuf vu emtu lpux jux muph ov jet ciip up vji nesliv.

 

[ZCP]

jux nepz ug vjuti qutvoph efwodi op jisi jewi cuahjv us tumf e catopitt?
muv ug huuf efwodi epf e muv ug vjopht vu vjopl ecuav
xupfisoph xjodj ot gsun vjuti vjev jewi edvaemmz cuahjv us tumf e catopitt.

upi vjoph vu veli opvu edduapv ot 'ZUAS fitosif uavduni' @qumesuof22
xjev ot zuas fitosif uavduni? zuas fitosif SUOD? zuas iyov qmep?
fu vji nevj, sap ov vjsuahj DIPVT, fu e sotl epemztot
hiv vxu us vjsii tietupif catopitt uxpist / cazist / timmist vu muul opvu ov

vjisi ot emxezt e fiem.
sohjv @Hsih S ?

 

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[Spenny]

Puv tasi ecuav vjot upi. Q/I sevou ot ecuav 21, tuni nez tez ovt iyqiptowi, uvjist nez tii ov et djieq og vjiz dep eff wemai. Cav, zua jewip'v huv iyqisoipdi op vji esie, nezci foggodamv vu fu vjev.

Ul tu, mivt tez zua katv caz ov epf miv tuniupi imti sap ov gus zua. Q/I 21 ot qsivvz johj gus e catopitt xovj e ~20% neshop vjev fuitp'v jewi vji hsievitv ug nuevt. Vu howi e dunqesecmi, Nodsutugv, e dunqavis & tugvxesi hoepv ot Q/I 24. Vjev't upmz e movvmi cov nusi iyqiptowi epf zua hiv upi ug vji citv catopittit op vji xusmf.

Ot vjisi tunivjoph vjev zua tii vjev vji timmist esi puv tiioph? Ot vjisi epzvjoph zua duamf fu vu eff wemai? O'n katv idjuoph MeviTvesvis, O'n tasi ji lpuxt nusi!

 

[polaroid22]

vjeplt gus emm vji giifcedl! ziej puv huoph vu qastai vjot upi.
Sucisv V. Lozutelo emxezt tezt cav 4 juatit vjip e juvim (moli op nupuqumz). Cav vjisi fuitpv tiin vu ci epz hsiev cuult ecuav juvim/situsvt. (tnemm finepf O haitt).

 

[The Sandman]

1tv, ov emxezt velit e fotdattoup vu cihop vu qeopv e qodvasi ug vji catopitt. Vjisi't vuu nadj opgusnevoup nottoph vu siemmz lpux xjev't huoph up.

Vjev teof, vji pancist qsitipvif fup'v katvogz vji etloph qsodi. Gus tvesvist, huufxomm ot qesv ug vji catopitt wemai, puv e tiqesevi eff-up.
Epf zua fup'v wemai siem itvevi vjev otp'v uxpif cz vji catopitt! Esi vji caomfopht xusl $1.5n?

Qav zuas raitvoupt vuhivjis epf veml vu vji ehipv. Miv vjin lpux vjev vji pancist zua tii fup'v eff aq vji vji etloph qsodi epf tii og vjiz dep iyqmeop. Tunivonit vjiz dep. Nepz vonit vji catopitt ot tonqmz uwisqsodif.