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Looking at a place

5K for the deposit. He wants 45k altogether, basically the equipment. He will take half of that, then some payments from us. We are thinking maybe he is behind on the rent and wants to pay up the landlord before he calls her. It has pretty low rent, assuming landlord doesn’t raise it. Beer & Wine license also.
 
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Someone else said this…I’ve never known of a liquor license that passed from owner to owner. Just be aware of that.
 
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The more that is posted the more I think RUN AWAY! Do not give any money or sign anything until you have the inspections and talk to the landlord. If you are interested after what the inspectors say it is time to deal with the building owner first. He owns your space not the current lease holder. The landlord might have a lein on this equipment already for past due rent. EVERYTHING this guy has said YELLS that he is hiding a lot. There are enough red flags to have a flag football game with!!! Sorry to say but you have 2 options in my opinion. #1… listen to the many people here that have gone through this and spend a week talking to the right people locally that will fill in all the MANY MANY blanks and let you make an educated decision…or #2… which I get the bad feeling that you are leaning towards… you will give this person $5k…he will payoff or run away… you will lose your money and the landlord laughs his way to the bank and also retains his building. SLOW DOWN!!! If you want to throw money away I will PM my address too you and you can forward as much as you like to me! :mrgreen:
 
Yeah, I think there are some red flags. It doesn’t sound kosher. But, that’s why due diligence is important.

Good luck, but I’d recommend not leaving any unanswered questions. Verbal assurances are meaningless. Get everything in writing. It’s standard practice and be wary of anyone who objects to written agreements.
 
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I realize this is not new construction but there are some key points of information here: http://www.countyofsb.org/phd/default_a … oter=18960 and some information here: http://www.cdph.ca.gov/programs/Pages/F … ogram.aspx

Google your county, state…etc.

The sites in my state that gave a weatlh of information(we built ours) were my saving grace when it came to dealing with authorities. Asking an inspector if a three bay can work in place as a prep or hand sink might leave you standing with a degree of disrespect.

Good Luck

PD
 
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Beer & Wine license also.

by eupher61 » Mon Feb 20, 2012 6:20 pm
Someone else said this…I’ve never known of a liquor license that passed from owner to owner. Just be aware of that.

I agree with the above. A license to sell alcoholic beverages is not usually transferable until the local governing agency conducts an extensive investigation of the buyer.

George Mills
 
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Hi Franny:

If you really want this place get a Lawyer to represent you. He can take your deposit and hold it in an escrow account until a deal is signed or give it back to you if there is no deal.

George Mills
 
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Thanks George. I think dealing with the landlord is a non-starter. I’ll try to strike a deal with owner. Deposit contingent with lease. I’d like at least 5 yr. w/ option. Is that too much to ask? Was back again today. It looks real good. Hoods, oven, walk-in are all in good working condition. He has everything still on. There’s Plenty of room. Researched grease traps, sinks, those wouldn’t be a deal breaker. I’m just worried of being closed for months on end. I plan on talking to someone from our business development dept. in city tomorrow. I’m not worried about fire or really the city, just the county. The owner is calling county health tomorrow for a pre-inspection.
 
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I will say it again. Not one single person here has said “sounds great” or “run with it!” and you seem to almost defend the current owner a bit. Slow down! Get all the inspectors in there with you to do a walk thru. Do not give any deposit even with the promise of return. This is a closed and failing business and that should be your first red flag about this seller. I would not care who they are or how well you know them. You are risking it all by not taking the financially correct steps here. This place is not going anywhere in a few days…so YOU make the calls and talk to the landlord and inspectors. This will be your lease, your liquor license, your loans…so YOU need to make the calls and do the talking. :!:
 
Not meaning to gang up, Fran, but if talking to the landlord is a non-starter, you need to forget about this. As Mike just said above me, you’re going to be dealing with the landlord for the next few years, much more than the seller. The seller just has the stuff; the landlord has the roof over the stuff.
Does the landlord have a lien on the equipment?
Does the county have a lien on anything?

Again…stop. Deep breath. Landlord. Inspectors. Lawyer. Health Dept. Accountant (for a business plan, too).

Do NOT give the seller any money until you’ve talked to all of the above folks, and EVERYTHING shapes up OK.

If you really want to get rid of your money right now, I’ll be glad to take it off your hands.
 
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George Mills:
Hi Franny:

If you really want this place get a Lawyer to represent you. He can take your deposit and hold it in an escrow account until a deal is signed or give it back to you if there is no deal.

George Mills
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I agree with George. You need to get a lawyer to represent and hold the money. It is not uncommon for a seller to ask for a deposit before giving information, that way they know that you are interested and not just wasting their time. but if he spends it how are you going to get it back if you find there are more problems?

and the possible liens on the equipment should make that an absolute thing to do. For example, in New York State the sales tax goes with the business----If the sales tax isn’t paid, the buyer is responsible for it.
 
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I plan on talking to an attorney. It seems the liens have been paid. The landlord is a wretched woman, 83 yrs old, owns tons of properties and handles it all herself. Sounds like a real winner for sure. He showed me a copy of his past lease, which was an option from original. She never raised the rent in all that time he leased, even though lease stimulates 3 % increase a year. I’m guessing, any improvements, or free rent will not be forthcoming.
 
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Dang Eupher…I called dibbs if she just wants to give it all away! :x Fran like Eupher said we are not trying to gang up on you here but we have all lived or heard this play out poorly many times. We are honestly looking out for you. This is the order that I and I think most here would agree with:
  1. Call landlord and get an understanding as to where the current lease stands, what plans he has for the space once the lease is up, any tax or other lien issues he knows of, and most importantly… how he feels about you signing a new long term lease with another pizza shop?
  2. Investigate the tax and lien issue a little further with state, local, county, and fed levels. So far you have invested no money and a couple of hours of time.
  3. Contact all the inspectors… county health, building, fire, etc… and since the place is closed… try and set up a day to do an entire walk-thru all at once. Get them all on board and sometimes it works because they all talk together and can help you work out problems on site. Call the current tennent and inform him that if you are to proceed at all… this day or days of inspections will need to take place before any money changes hands…even in an escrow account.
  4. If the inspections go well or at least are workable…and there are no tax or lien surprises… and the landlord is on board with you signing a new lease and doesnt have some surprise plan to tear the place down in 6 months…etc… GET AN ATTORNEY to help negotiate the lease and purchase of the equipment. To this point you have invested nothing other than time to answer all of the above questions. Now it is time to invest a few hundred or a thousand to have this written up the correct way to protect you and the major investment you are getting into.
Like I said before…depending on where the tennent and landlord are sitting with rent payments and other due expenses…you might be in a great position to negotiate free or reduced rent and a better purchase price on the equipment. I am 100% sure you will take advantage of none of this if you follow your current path of listening to the current owner and hand over $5k in cash for a dposit on what? Old equipment that is really worth how much? A lease that is almost up and he does not have legal authority to offer you anything on a new one! Best of luck because I really get a bad feeling that you are letting emotions take the lead here instead of common sense. Be careful!!!
 
Just an add since I just read your last post. She is an older land holder… a few hard questions… where does it go if she drops tomorrow? Family and money and selling of property ALWAYS gets ugly. What is the building worth as is? Can you afford to make an offer to purchase? Talk to the bank. Talk to her. Get everyone on the same page and maybe this will work out even better. Who is to say that she hasnt raised the rent of 3% annually for the last 5 years and now wants to raise it the entire 15% to you! If you really think the numbers can work and if you are able…work on the buying instead of leasing.
 
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