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  #61  
Old 10-25-2013, 10:06 AM
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Its the romance of owning such a thing. Its that simple. You are right about everything else.
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  #62  
Old 10-25-2013, 10:29 AM
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There is ZERO chance an intelligent person would pay $39 million to "gamble" for a $700K profit just to look cool to his friends on a yacht. Even the super yachts are chartered to make some cash to offset costs. Even at double the dicey profit...$1.4 mil....horrible investment. At the end of the day, even the super rich keep an eye on their money or they too will soon be on Obamacare.

A buddy bought a liquor store (building and all inventory) as an investment in Rhode Island for $1.5 mil. He nets over $200K AND now he has friends he never knew he had.....Much better deal.
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  #63  
Old 10-25-2013, 11:08 AM
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42x earnings, I wish I could get that in my business.
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  #64  
Old 10-25-2013, 01:21 PM
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Quote:
Originally Posted by naparsei View Post
In a relatively small business like this, $700K in profit could mean anything also. Was that after the owner took a really nice salary? And his kids too? Part of marketing was running a Challenge team? Pulling any of those out of the expenses makes the profit go way up...
Yes, no to kids, $200,000 annually to office manager he was not schlepping, yes Challenge team.

JAG 15, not a zero chance. My partner had $15 mill minimum coming through each month from legit pharmaceutical companies he owned. $39 million was nothing. You are talking like us normal people, that is why you are mistaken. His level, with the Gulfstream G5, two pilots on payroll, two full time fight attendants on payroll, easy 12-15 condos most empty, 5 Ferraris of his own along with 10 other cars, was going to drop $110 million on the Marseilles soccer team, permanent room at the George V in Paris, etc.

Because I helped him look for a yacht he never bought, I receive a magazine called Showboats, covers the over 100' yachting industry. The rich might charter out their yachts to help offset crew salaries, but the super rich do not let anyone on their possession unless invited.

Even knowing him, I still can not comprehend that level of wealth. I only got to have quick meetings with him on the Gulfstream in between flights. Never offered to take me to Paris. Nor did I comprehend his level of dirty dealing until everything crumbled. He ended up leaving the country to avoid legal issues, holed up with Moammar Gaddafi until things cleared.

Last edited by RP; 10-25-2013 at 01:28 PM.
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  #65  
Old 10-25-2013, 04:22 PM
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Interesting that most of you are simply looking at only the (2) numbers to draw your conclusion ---

Purchase price - $30M
Annual Profit - $700K

Without seeing an asset disclosure AND a depreciation schedule, how do you determine this is inherently a "bad investment". You have no idea what capital assets are (may be) included in the acquisition and what potential value can be re-captured.

For example....

real estate (property)
facilities (buildings, etc.)
equipment / tools
licenses (FNA franchise, diagnostic s/w, supplier, etc)
current inventory (capitalized)
existing / realized & future sales presently under contract

All of these have cash value (against any depreciation already captured), if they are assetized, and if they are included in the sale price..... and therefore, offset (reduce) the actual initial investment value & return schedule on that investment value.

Hypothetically, what if this "mythical Dealership" for sale IS one in the Chicago area, and it were sitting on $10M worth of commercial property (paid for and included in the sale) ---- does that change your mind / make you sharpen your pencil ???

I realize I am blending the (2) different dealership examples being given ---- but that is done to illustrate a point on a hypothetical.

Last edited by finnerty; 10-25-2013 at 04:48 PM.
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  #66  
Old 10-25-2013, 08:40 PM
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[QUOTE=finnerty;142685153]Interesting that most of you are simply looking at only the (2) numbers to draw your conclusion ---

absolutely correct , there are alot of ways to profit from such a business.
first we need to know how much of the 39 mill is inventory, and like finnerty said value of property, these a two assets that can yield immediate cash flow, sell of excess inventory to other higher volume dealers, mortgage property, or sell and lease back, depending on value you can chop at least a 3 rd of the 30 mill if not half. And im sure owner was receiving a huge paycheck every week , declared less as profit to avoid double taxation. the more important question is how they arrived at that 700 k profit, and what is the gross revenue of said dealership, all more pertinent questions, when valuating such an expensive business.
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  #67  
Old 10-25-2013, 10:17 PM
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Originally Posted by Drive550PFB View Post
....Anybody have anything credible?
Credible ?! Dude, this is F-Chat ---- rarely anything ever credible here !! LOL

Quote:
Originally Posted by KenGoldman View Post


Ferrari Dealership for Sale
RARE OPPORTUNITY

Timlambgroup.com You can go on their website & see the ad.

He could not tell me many details without a confidentiality agreement.
But, he did say $30 Million---and located in North Central USA.

I wonder if this is Continental Motor Sports.
Quote:
Originally Posted by Jeff Kennedy View Post
Front runner may be MAG.
A little deductive reasoning tells me it is MAG (Ohio). It fits the limited description plus when you go to the broker's (Tim Lamb Group) website, it lists the contact number for this offering as a 740 area code, which is the Columbus, OH vicinity. Lamb has offices in various US locations including Chicago and Columbus ----- stands to reason the selling office would most likely be located in the same place (at least the same state) as the Dealership for sale.

It also follows that if it were Lake Forest or Continental, it would be represented by their (Lamb's) Chicago office ---- which it is not.

So, I am betting it is MAG.

Last edited by finnerty; 10-25-2013 at 10:22 PM.
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  #68  
Old 10-25-2013, 10:19 PM
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Was the dealership Shelton?
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  #69  
Old 10-26-2013, 01:28 PM
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Quote:
Originally Posted by finnerty View Post
Interesting that most of you are simply looking at only the (2) numbers to draw your conclusion ---

Purchase price - $30M
Annual Profit - $700K

Without seeing an asset disclosure AND a depreciation schedule, how do you determine this is inherently a "bad investment". You have no idea what capital assets are (may be) included in the acquisition and what potential value can be re-captured.

For example....

real estate (property)
facilities (buildings, etc.)
equipment / tools
licenses (FNA franchise, diagnostic s/w, supplier, etc)
current inventory (capitalized)
existing / realized & future sales presently under contract

All of these have cash value (against any depreciation already captured), if they are assetized, and if they are included in the sale price..... and therefore, offset (reduce) the actual initial investment value & return schedule on that investment value.

Hypothetically, what if this "mythical Dealership" for sale IS one in the Chicago area, and it were sitting on $10M worth of commercial property (paid for and included in the sale) ---- does that change your mind / make you sharpen your pencil ???

I realize I am blending the (2) different dealership examples being given ---- but that is done to illustrate a point on a hypothetical.
Bingo!!

In my case, the inventory was large (new and used), support vehicles like flatbeds, semis, very large piece of land on a major highway including a few acres unused and perfect for an Alfa franchise. The ability to go up to 7 stories, etc., $39 million with $700k is not so unreasonable when in 24 months you could triple that number, possible quadruple.

With all of the collectible cars in the market, I even thought about condo garages above the dealership. A simple phone call "please get my Daytona ready for me next week", and the service department (for a fee of course) unlocks the garage, gets the car ready, it is washed/waxed, tuned, and ready for the owner to enjoy without any hassle after charging his black AMEX which is kept on file.

People living in condos usually only get 2 spaces max, one for his car, and one for the Mrs. So where do you park the 458? And the profit from the condo garage development was in the neighborhood of $5 million, minimum. We included a restaurant on site that duplicated the one across from the Ferrari factory. Like I said, on a major numbered highway.

We also considered buying this large Cavallino and placing in front of the restaurant.

But that dream went up in flames.
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Last edited by RP; 10-26-2013 at 01:46 PM.
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  #70  
Old 10-26-2013, 02:29 PM
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Quote:
Originally Posted by finnerty View Post
Interesting that most of you are simply looking at only the (2) numbers to draw your conclusion ---

Purchase price - $30M
Annual Profit - $700K

Without seeing an asset disclosure AND a depreciation schedule, how do you determine this is inherently a "bad investment". You have no idea what capital assets are (may be) included in the acquisition and what potential value can be re-captured.

For example....

real estate (property)
facilities (buildings, etc.)
equipment / tools
licenses (FNA franchise, diagnostic s/w, supplier, etc)
current inventory (capitalized)
existing / realized & future sales presently under contract

All of these have cash value (against any depreciation already captured), if they are assetized, and if they are included in the sale price..... and therefore, offset (reduce) the actual initial investment value & return schedule on that investment value.

Hypothetically, what if this "mythical Dealership" for sale IS one in the Chicago area, and it were sitting on $10M worth of commercial property (paid for and included in the sale) ---- does that change your mind / make you sharpen your pencil ???

I realize I am blending the (2) different dealership examples being given ---- but that is done to illustrate a point on a hypothetical.
HUH ?

the $30M purchase price likely has a large goodwill number in that acquisition.

in all likely hood, none of those assets would be able to be "assetized" as they are likely all used in the generation of that income. the liquidation vale of those assets get hammered without a ongoing ferrari concern. just another shut down dealership.

now if it was sitting on $20M + of RE and you could relocate the dealership.....
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  #71  
Old 10-26-2013, 03:38 PM
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Quote:
Originally Posted by KenGoldman View Post
Saw an interesting post in Wall Street Journal last week:
Ferrari Dealership for Sale RARE OPPORTUNITY
Ken Goldman
Ken, this is of particular interest to me since over twenty years ago I flew to a large U.S. city to meet two friends, one a [non-franchised] Ferrari dealer and well-known and recognized independent Ferrari service organization, the other a serious car guy who was EVP of a Fortune 100 Company. We had formed a parrtnership and were there to negotiate the purchase of the Ferrari dealership in that city. Of course Maserati was not in Ferrari's picture then but the deal included an Alfa francise (no one then knew that Alfa was shortly to disappear from these shores) and a Lotus franchise. The seller was the widow of the deceased individual owner. At the time the exotic car market bubble was topping and the lady was asking a wild blue sky price for the franchise that did not have that large an allocation of new cars. We finally took a hike over a different issue: she insisted on getting the F40 allocated to her store but not delivered. She was softening on the blue sky but the value of that car broke the deal.

As a pure business decision I can see no way that the purchase of an Ferrari/Maserati dealership can be a good deal today. The market is as much at a top as it can ever be. For how long can Ferrari continue to find 7,000 buyers every year for new cars costing between $300,000.-500,000. and willing to take a $200,000. hit on the value of their new cars the moment they drive off the lot?

IF I ever lost my mind and became a buyer of a franchise I'd want especially to know the exact terms of the agreement with Ferrari S.p.A. for my guess is that the dealers are absorbing a good part of the cost of serviocing under the new extended warranty. and triing to make it up on servicing the older cars. Which is why those older car service costs are soaring.

Worst possible business to be in.

except for the romance, as a few of us have noted.
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  #72  
Old 10-27-2013, 06:04 PM
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No dealership is in the business of making money off of new car sales. They may take a shot at having a profitable pre-owned sales department to offset the burden of the sales department as a whole on the dealership. The idea is to introduce cars into their car park accumulating mileage and eventually requiring service. That's it. You have to analyze the approximate number of cars in the region that are serviceable, and that would potentially visit your dealership for service. There-in lies your possibilities for profit. Labor and parts dollars.
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  #73  
Old 10-27-2013, 06:12 PM
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I haven't seen a single person mention the dealership I know for sale and it could fit into the region mentioned in ad. Possible there are more than one for sale in this area, but one I know not mentioned.
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  #74  
Old 10-27-2013, 07:55 PM
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Originally Posted by Rob Lay View Post
I haven't seen a single person mention the dealership I know for sale and it could fit into the region mentioned in ad. Possible there are more than one for sale in this area, but one I know not mentioned.
It doesn't fit and the price is too high. But again, there is so much BS in this thread it's hard to know what's what.
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  #75  
Old 10-27-2013, 09:40 PM
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interested. count me in?
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  #76  
Old 10-27-2013, 10:38 PM
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Originally Posted by sherpa23 View Post
It doesn't fit and the price is too high. But again, there is so much BS in this thread it's hard to know what's what.
I don't know their numbers at all. Seems like even the smallest dealerships do $10-15 mm a year.
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  #77  
Old 11-01-2013, 10:27 AM
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Its MAG n OH
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  #78  
Old 12-07-2013, 10:55 AM
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Quote:
Originally Posted by HabberstadChris View Post
No dealership is in the business of making money off of new car sales. They may take a shot at having a profitable pre-owned sales department to offset the burden of the sales department as a whole on the dealership. The idea is to introduce cars into their car park accumulating mileage and eventually requiring service. That's it. You have to analyze the approximate number of cars in the region that are serviceable, and that would potentially visit your dealership for service. There-in lies your possibilities for profit. Labor and parts dollars.
With a " normal " Dealership your perspective is correct.

I can tell you at Ferrari, it's been the opposite, in that a majority of the GP comes from the front end. The back end ( Fixed Operations ) was a nessasary evil, required to get allocation each year. Just don't cost the company too much money kind of attitude. A few salaried employees, work when you want to , produce what you want to , when you want to kind of thing.

When I was brought on, I was asked if I could help make some profit, as well as help increase the customer service aspect. In doing the latter, it helped increase traffic, and in turn , we now make a profit. Techs are now paid based upon their production, there are goals in place, objectives to hit, etc.

Regarding Dealerships absorbing the cost to service the cars, it may be true in some , depending on their structure. Here, Fixed Operations employees are paid flat rate ( Job pays 1.0 hour no matter how fast/slow its actually completed ) so the new service agreements from FNA simply pay less , but also cover alot less actual work/service than what has been the norm, for an annual service that is.

There is money to be had, but its more like a high line independent shop with Ferrari backing, which in itself is priceless no matter how good or bad it may seem.

I agree with alot of the comments, you don't own a Dealership just for the profit / money, there are alot of other " experiences " that come with it, that you wouldn't / couldn't buy into otherwise.

I'm not sharing any secrets here, just my opinion from this side of the desk.

S
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  #79  
Old 12-07-2013, 10:16 PM
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Quote:
Originally Posted by Rob Lay View Post
I don't know their numbers at all. Seems like even the smallest dealerships do $10-15 mm a year.
When I saw the ad, my first reaction was Denver.
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  #80  
Old 12-08-2013, 02:43 AM
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Angry my MAG experience

I have a car in Columbus. needed a new key programed. MAG said $4,500. Cleveland did the job for $2,500. I got nailed really bad one time at that place. learn quick. that is the very reason there r three good independents in Columbus
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