Location: San Antonio, TX
The attached model includes a spreadsheet analysis for Mini Town USA located in San Antonio, TX. Mini Town is currently listed for sale at $1,500,000. The spreadsheet model includes a pro forma income statement, balance sheet, free cash flows and an analysis for the weighted average cost of capital compared to a projected internal rate of return. Also included are options for capital expansion in a high market. The model allows for adjustments to all the major inputs using a sheet of assumptions that detail the generated data.
With the current values, Mini Town would have a weighted average cost of capital and internal rate of return of 4.7% and 5% respectively. This was accomplished using a 71% debt proportion and a purchase price of the assets at $1,237,250. We believe that the current asking price is too high. Bringing the asking price down would relieve the burden of the debt and promote a quicker rate of return to the equity holders. This would help bring future investment in Mini Town as can be seen from the option for a future remodel. With these factors in mind, the purchase price should be somewhere around $1.2 million.