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Let's say you want to earn about $80,000 per year
from a business. You have found an opportunity that produces a cash flow of
$115,000. It is priced at $280,000 with a $90,000 down payment and note
payments of $3057 per month for 7 years, including 9% interest. Can you
afford to buy it?
Down Payment $90,000 Note to seller (Paid at $3,057/mo) $190,000 Total Price $280,000 Total Cash Flow (The price is 2.4 times total cash flow) $115,000 The Annual Debt Service ($3,057/mo times 12) $ 36,683 The remaining $78,317 is available to the new owner $78,317 Usually business purchases work best if dept payments are kept to about 35% or less in this case it is 32%
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