The best long-term investment in today's market?

Written by Willard Michlin


Continued from page 1

The problem today with most 50+-year-old baby boomers is that they never got started on building a retirement fund. So now, instead of havingrepparttar normal 30 years to build a retirement fund, they need to be there in 10-15 years. It might take one year of financial hell to come up with some cash. (That means no money for anything except accumulating cash) But after that, it can be a sweet painless ride to wealth. The best part isrepparttar 106189 possibility of failure is less than 10%, if my steps are followed

First: The money is not touched for 10 years. That is why a trust fund, IRA or a self directed retirement plan is a great place to put this.

Second: I have taken my 30 years of real estate experience to develop exactly which properties will giverepparttar 106190 biggest appreciation and cash flow and also berepparttar 106191 best risks. Interestingly, almost everyone I talk to picksrepparttar 106192 wrong locations to buy until they hearrepparttar 106193 whole list of criteria.

Now that I have told yourepparttar 106194 lazy man’s way to riches, let me tell yourepparttar 106195 downside. You have to haverepparttar 106196 correct timing on your purchase. In Dec 2001, everything was in place to do these two programs, in Los Angeles County. Unfortunately, by July 2002,repparttar 106197 numbers didn’t work any more. They did still work in Florida, for example, but not in Los Angeles. What happens is that prices go up afterrepparttar 106198 rates go down. The seller sees how good a dealrepparttar 106199 buyer can get and raisesrepparttar 106200 asking prices. So! Your timing to start these programs is very important. Do not be discouraged, though. Ifrepparttar 106201 numbers do not work today, it will work sometime tomorrow. The system is sound, and since we are talking long-term wealth accumulation, a little patience can go a long way.

Willard Michlin is an Investor, California Real Estate Broker, Accountant, Financial Distress Consultant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other article by Willard at http://www.kismetgroup.com


Do you know what your body shop business is worth?

Written by Willard Michlin


Continued from page 1

As a result of showing poor profits, onrepparttar books, it becomes very difficult to userepparttar 106188 NET PROFIT METHOD for appraising many small businesses. Luckily for me, I can quite often find hidden profits, of a business, by adding torepparttar 106189 books, items we call owner’s benefits. These include: Owners salaries, if a corporation. Personal autos and allrepparttar 106190 related expenses used byrepparttar 106191 owner and his family that are written off againstrepparttar 106192 business, fife insurance and health insurance forrepparttar 106193 owners.

Depreciation is also a hidden profit that is usually added back in torepparttar 106194 taxable profit to help build uprepparttar 106195 total owners benefits. And lastly, personal utilities, phones, trips, etc. that are deducted onrepparttar 106196 tax return but are not really costs to runrepparttar 106197 business.

After saying all this, what isrepparttar 106198 value of a business based onrepparttar 106199 Net Profit Method? Automotive businesses, especially auto body shops appear to sell for between 1.5 to 2 years adjusted profit (book profit plus owners benefits added back in). Larger body shops doing over $2,000,000 in annual sales may sell for much more, becauserepparttar 106200 owner is making much more money, than just his salary and a buyer will consider part ofrepparttar 106201 profit a return on his financial investment.

Very large body shops that are being bought by public corporations are evaluated primarily on their return on investment (Percentage profit that is being made onrepparttar 106202 cash purchase price ofrepparttar 106203 business.) These big buyers can afford to pay between 5 times and 10 times annual net profit, after deducting all officers’ salaries and perks.

Often these, public corporations, high purchase prices include two important restrictions, which is really why they are buyingrepparttar 106204 business inrepparttar 106205 first place. First: The business is bought for little or no real money. They use restricted corporate stock that is not negotiable for two years. And second: The management is required to stay and runrepparttar 106206 company for some period of years.

The bottom-line, as I see it, is that you sold your soul, not your business. One last comment on selling to large corporations; heaven helprepparttar 106207 seller who sells his business for corporate stock orrepparttar 106208 buyers bonds andrepparttar 106209 buying company goes broke orrepparttar 106210 stock market crashes. I had a close friend sell his company for mostly cash and some seller carry back financing in Dec 1997. By Feb 1998repparttar 106211 buying company was in bankruptcy, makingrepparttar 106212 paper my friend held worthless. CONCLUSION: Appraising a business, especially body shops, is an art not a science. No two people will appraiserepparttar 106213 value of a businessrepparttar 106214 same. I am amazed thatrepparttar 106215 same thing one buyer thinks is a great asset is what another buyer thinks is a major negative. Differences of opinion are what make life interesting.

Willard Michlin is an Investor, Business Broker, California Real Estate Broker, Accountant, Financial Distress Consultant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other article by Willard at http://www.kismetgroup.com


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