One of my brothers and i are looking at buying an auto repair shop. My other brother owns one and now this one wants to take the leap.

The owner wanted to sell out a year ago but he wanted too much so we didnt even make an offer. I knew after a year of missing out on times with grandkids he would get more realistic.

Now im ready to make an offer. My only question is how to structure my offer. They want a lump sum but basically im not interested unless i can put very little down (like 5%) and they carry the note.

They keep trying to use social security as an excuse. From what i read, this would be considered investment income and only earned income would reduce their benefits.

Am i thinking about that correctly?

Investments have nothing to do with SS.

I think that you are correct on the investment aspect. I suspect they are looking at your 5% down offer and finding a "polite" way to tell you to GTFO.

I would never consider a "down payment" of anything less than 10% , I suspect most people would agree. A down should be refundable if you find something you don't like in due diligence. An owner carry deal I would probably be more likely to need 25-50% of the note value. Otherwise, why would I sell you my business that has a good reputation. While in this deal I run all the risk of you running that reputation into the ground and getting all my vendors and suppliers mad. Then I don't get paid and I also get a business back that is worth less than before.

I havent even made an offer but i would agree with you in most cases.

Long story but i worked for him in junior high and my brother worked there for 14 years. He loves to get top top dollar out of everything. He is good but gouges people when he can. My brother runs the other big shop in town and has a great rep.

Now i hold all of the cards and he'll take what i offer and like it. Small town, no one is going to pay that much for the shop.

The guy with the big shop in the next town over went through the same thing last year. Wanted hig money. Sold for 50 cents on the dollar to a farmer.

They were so insistent last year that they wouldnt owner finance and wanted a big premium. I figured a year would be nice for them to think it over.

I dont mind putting up 10 or even 15% but when it comes down to it, i can make better returns on rentals so i wont tie up a lot of capital on this. He can work until he dies or sell on my terms.

His family and church work is so important to him i suspect he will come around soon. I dont mind paying a decent price but i wont spend much cash on it.

When i was a young man he screwed me around a bit when we parted ways and he gouges me every time i take a fleet vehicle to him. Its time for fella to get paid back.

Thats the only thing that changes this. Why would he sell for little down? Because no one else wants it, death is near and his grandchildren are growing up quickly. He wants to travel and do his ministry work also.