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Old 04-21-2007, 12:00 AM
kfellmy kfellmy is offline
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Join Date: Aug 2003
Location: met my goal. now retired poker player
Posts: 767
Default Re: Cha-ching: a successful flip

Okay time to answer some questions that you all have:

Q. don't know much about this stuff, but if it was making 2K/week, wouldn't you hold onto it ?
You could end up making a lot more than 15k, no?

A. Yes, I could keep it and make more, but now is the time that the "snowbirds" go back home. Revenue drops for everyone. Eventhough my customers are locals, the shop owners profits go down by 40%. So they don't spend as much during the summer. Some places treat their workers good and buy them lunch on Fridays. But not when there is little money coming in. The walk-in crowd stays the same, but the catering drops way off.

Q. Did you have prior experience running or owning a deli?

A. NOpe, the opportunity came up and I bought it. Never owned a business in my life.

Q. wow great job Keith, was this a mall stand or a full blow shop?

A. The shop was in a four place strip mall but this was the only business open in the mall. Actually there is three stip malls on this road and they are all run down. Mine is the only business that was running in the whole area. The area is full of run down trailers that rent for way more than they should. The area is known for drugs and prostitution. So yes I was packing every day. For gun nuts out there it was a Super Redhawk....480 caliber.

Q. How did you find the place to buy?

How did you find the buyer when you sold it?

A. The answer for both is that I was a customer as was the couple I sold it to. I used to walk by the shop when I take my four mile walks. Place closed at 1:30 in the afternoon so when I walked by it was always closed. One day I walked by at noon...and the place was packed. Only had seating for 8 people. There were 10 cars in the lot. So I went in and had the best deli sandwich I have ever had. I thought the prices were high but the place was packed. So I got to know the owners. FOund out it was for sale. So I didn't offer right away and waited them out. They wanted 35K, but when I would pay for my sandwich I would show them the wad of bills in my pocket. When they said they would even take 20K. I showed them that I had that in my pocket...in cash. So I bought it. The couple I sold the shop to were also customers. They said they had thought about it. I told them I bought it just because I liked the sandwiches. Told them I paid35K for it and if they wanted it that bad then they can have it for 35K. "I don't care about making money...I just didn't want to see the shop close." I know it was a big fib. But I seemed to be "genuine" to them and they wanted it.

Q. What all did you do different? Was the juice bar the only improvement or did you do a bunch of extra advertising? Grats on the flip!

A. First the "juice" bar was adding 5 Jack La Lane juicers. So 250 bucks for the juicers. So instead of charging a buck for a can of coke I could get away with charging two or three bucks for a fancy drink that was good for you. Second improvement was having three people making sandwiches, before the old owners only had one guy making the food. If you are on a tight lunch schedule then eating there was not an option. You couldn't get in and out in a half hour. Third improvement was adding two tables so I could sit 16 people. That's it. I never paid one penny for advertising.

Q. Some numbers would be really appreciated for us to learn, thanks.

A. Incidentals were 150 a week (Insurance, workman's comp. and other crap.) Employees made 393 a week total...5.25 an hour for 5 hours a day. Food stuff was 587 a week. So from 2000 minus 587 minus 393 minus 150 equals 870 a week for me.

Q. broker fees?

A. Real estate gal was a customer so she didn't charge as much as some others would. She made a quick 500.

Q. 870 profit for 6 weeks is 5220 profit. Take 20K from 35K is 15,000 plus 5220 equals 20220 minus 500 for a total of 19,720.
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