going to buy a distressed salon

[SandiGirl]

Originally Posted by hiii98

?? 400 amps. I'm not sure if i answered your question correctly.

So is that maxed? How much room is left? THAT'S key for upgrading.

[hiii98]

in three years the rent could potentially go up! No renewal options negotiated..any suggestions?

Yes i own the equiptment on day 1 of the lease. I plan to sell the assets and upgrade immediately.

Sorry for my ignorance how could he take it back in 3 years or how can i protect myself from that scenario?

THANKS!! yet another piece of advice i could use!

[movieking]

In 3 years the space is no longer yours to lease unless you have renewal options that you exercise. At this point he can go in and re-open a salon and you have to re-locate.

So on day one he is giving you all the assets? Are you sure he is not considering the assets to be part of what he is leasing to you?

[SandiGirl]

Originally Posted by movieking

What happens in 3 years? Did you negotiate renewal options? At what point do you own the equipment and other assets? Can you sell any of the assets in order to upgrade and if you can does he own the new equipment or have you negotiated a value for the individual assets that you would pay him if you sell anything?

If you succeed in building this business you need to know that he can't simply take it back in 3 years!

Essentially he's getting the business for free with the lease. The business was for sale and this is where they've ending up with negotiations after he learned the salon wasn't worth what the LL was asking.

[hiii98]

Originally Posted by SandiGirl

So is that maxed? How much room is left? THAT'S key for upgrading.

there is an additional 530 sqft of room if i want to expand into it. HOWEVER he will only remodel that space if i sign a 5 year lease rather than a 3 year. So currently that space has no electricity or ac vents.

the 400 amps is what is currently there with the 2 panels, and i seriously doubt that is maxxed. We concluded the place could support up to 13-14 beds total.

[hiii98]

"renewal options that you exercise."

i will be sure to write that into the offer immediately!! Good call, this place has passed hands already 3 times now ...so i'm sure he is itching for me to build it up, only for him to take it back over when the lease expires.

[SandiGirl]

I think 600 is needed for that many beds...but maybe less if your a/c is on another panel.

[Tanning Queen]

13 beds in the current space? I thought it was like 950 or 1000 sq ft?

YOu still need to figure out the AC problem. The fact it is shared with the hair salon, the fact it isnt enough, etc.

[hiii98]

there are currently 8 beds, i can expand to 13-14 if i rent the additional space and do all the electric/ac at my own cost (or sign a 5 year lease)

[Tanning Queen]

YOu might actually LOSE a bed if you upgrade depending on the size of the CURRENT spot. The rooms you have now wont really be good enough for big VHR beds. Just letting you know so you can plan better.

So you have to do all of the rennovations inside except for the floor, right? If both panels are in your current space, then you should be fine, FOR NOW. You still need more ac and have it separate from the hair salon.

[rcknep3]

That is weird, I'd be really cautious. Does the landlord have proof of ownership? I'd hate to buy everything only to find out it was not theirs to sell. I bought my salon as an asset purchase under a new company. When debt collectors call, I let them know I have no connection to the prior company. I did make sure that the assets were paid for and the bed ownership was transfered to my name by the leasing company once they were paid off.

[Tanning Queen]

I mentioned that maybe pages ago to him. He said they were all paid by the previous owners. Personally, I would still get the paperwork for clear title. Or make sure no liens are on the stuff. I have a friend who was locked out of her salon by the landlord and now the collectors are coming for her but the new owners of the salon are using her stuff. Not sure how it will all work out since she told the leasing company she was locked out and to call the landlord to get teh stuff. I personally think the landlord is liable since he held property that isnt his, but rather belongs to the leasing co. She gave the leasing co ample notice to repo the stuff and mitigate their damages. Going to be a HUGE mess for a long time...

[Tanning Queen]

I would tell him to take the beds and give you an empty spot. those beds are worthless and if they arent paid off, let him deal with the hassel.

[hiii98]

they are paid off so this is not an issue.

[JeffK]

Originally Posted by hiii98

The landlord/owner just accepted my offer of a 3 year lease, no money for the business and 950.00 per month rent. Whats the consensus? Run from this or go for it? I guess i'm now in that position to walk away or jump in with both feet.

I am stunned you got electricity as part of the $950/mo rent.. Especially considering the cost of electricity could rise..

Your landlord will regret this in time..

[hiii98]

Also from those pics do you guys think i should knock down those walls and put up dry wall partitions? also expand to handle the vhr beds? Do the beds honestly even matter??.. i mean how educated are the consumers? As long as the beds look powerful and give a decent tan ... isnt it a waste of money to spend more? I'm JUST ASKING.. so dont jump all over me with how ignorant i am.

[BIG AL]

The money is in the higher beds, vhr and high pressure. Base beds are going to bring you only so much money. If you want to make a real go of the salon, bring in vhr beds and then High Pressure beds.

[hiii98]

Thanks Big Al... from the money i've saved on these negotiations i will have enough to buy some used vhr and high pressure beds. Hopefully the AC/ Electric/ and space will be able to handle them!

Are you suggesting that the customers all know the difference and are willing to pay MORE to use these units? Most of the people i know that tan have never heard any of these terms. My impression is that the average client isnt that educated (perhaps that will be my new role to help teach them the benefits)

[SandiGirl]

Wouldn't you like it to look better than a back room of an Asian corner store???

[SandiGirl]

Originally Posted by hiii98

Are you suggesting that the customers all know the difference and are willing to pay MORE to use these units? Most of the people i know that tan have never heard any of these terms. My impression is that the average client isnt that educated (perhaps that will be my new role to help teach them the benefits)

Exactly, it's your job to get them in the door, show them the bed and explain why it's better. Customers don't know 'VHR'...they know 'level 2' or 'platinum' or 'mega' whatever you're gonna call them.