Acquisitions Anonymous - #1 for business buying, selling and operating - 420 acres of Maui Wowee in Hawaii - Acquisitions Anonymous 257

Episode Date: December 26, 2023

On today's episode, Bill, Heather, and Michael break down a Maui Business that spans over 420 acres and serves as a far, farm stand, and maybe even an end-of-world retreat.This one is intresting...Check out the listing: https://www.bizbuysell.com/Business-Opportunity/420acre-farm-in-hawaii-includes-houses-quick-sale-5m/2026554/Thanks to our sponsors!CloudBookkeeping offers adaptable solutions to businesses that want to focus on growth with a “client service first” approach. They offer a full suite of accounting services, including sophisticated reporting, QuickBooks software solutions, and full-service payroll options.-------Check out Girdley's new course, How to find a great business to buy. It's chock-full of insights and is perfect for listeners of AA who are looking to start their own search!Subscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hey, Michael here. Welcome to Acquisitions Anonymous, Internet's number one podcast about small business buying, selling, and operating. Today, Heather, Bill and I, Michael, went through a farm slash farm stand slash eco thing

slash end of world retreat in Maui that just happened to be 420 acres large. So we dug into this and we went to some places with it. Well, maybe we're all glad we came back from. So here is the episode. Are you looking for a small business to acquire? Well, this book right here is the Bible for people in your shoes. It's the Harvard Business Review

Guide to Buying a Small Business. It's the go-to book. But here's the problem. You see this whole book and this little bit? This is the only part that talks about the hardest part of buying a business, finding the right one to buy. And the bad news is it's full of outdated advice and stuff that doesn't work anymore. I'm Michael Gurdley. I own 12 companies and including a couple that go out and buy more companies themselves. And I have a podcast where we look at new businesses to buy each and every week. I've looked at thousands of businesses for sale, and I've bought and sold nearly 20 of them. And I'm telling you, the old ways, they don't work anymore.

So I made a course with the latest and the greatest, and it's called How to Find a Great Business to Buy. It's laser focused on the new way to run a business search with what works today. So you can play smarter than the sea of buyers who are out there competing against you to try to buy these businesses. and you can get the deal that was meant for you. In the course, you'll learn three things. One, how to narrow your search with a tight thesis. We're hunting with a rifle here, not shotguns. Two, how to scale your outreach to get the most possible leads.

This is a numbers game after all. And three, how to run your funnel like a pro so you can boil down thousands of leads to find your one great deal. Plus, you'll get a couple of exclusive Chili's jokes that I've never published before. So what's not to love? Go to gurdly.com slash great business to take the course today. I think I click start at precisely the time that is scheduled for us to start. So Gen X, we do it on time.

We are on time. This is the time we said, and we are starting now. You're either on time or you're late. That's how Jen X thinks about it. That's right. Right. Cool. Tell my daughter this.

She didn't rub off on her. How does she feel about that? She doesn't see the need to be right on time at all. She does not get it. and it's not that important, but it is to us for some reason. We're obsessed. So Secret for you,

which we will now share with tens of thousands of other listeners, I am on a quest to bring more exciting deals to this here podcast. And today is the first day for that. And starting now. I brought this farm in Maui that comes with 420 acres,

which this peaked my interest a lot because 420 has a very significant number in the thing of the things, right? So for those of people who don't know, 420 is a number that correlates highly to marijuana cultivation because it's tea time and you were supposed to smoke marijuana in the afternoon. So that's when I saw this. I was like, wait, this is a farm that's 420 acres and there is Maui-Wawi potentially involved. So let me share this one and read it to you, Heather. And then we can decide how high you are on this idea.

On this one, you see what I did here? I am not high on it at this moment. You're not high on this at this moment. You are in California. Okay. So this is a 420 acre farm in Hawaii that includes houses, quick sale, $5 million, Maui County, Hawaii. And it has a picture of what looks like Maui.

I'm scrolling through things here. there are legit farm implements. There look like there's some, what are those there? Those orchids, do you think? Birds of paradise, I think. Birds of paradise, okay. A young lady in flowers. And what do these look like here?

These are like some sort of gourds? Yeah, I'm not sure what most of those are. Some citrus there, some gourds maybe, some native plants, I guess. Random fruits. And then here they have 100% Hana Honey, which maybe we'll find out that they're on the road to Hana, which is a very special place in Maui. There's like some rocks. They have rocks too. Man, these people win like the award for like best photos. Okay. So from Biz by Sell, we'll put the link in the show notes and stuff.

The asking price is $5 million. Cash flow is not applicable. Nothing here listed for gross revenue, EBITA, FF&E, all that kind of stuff, established in 1992. We are selling a business. You are buying a lifestyle. We have an extensive write-up telling a large amount of information about the farm, but it's too long for this description box that is allowed by biz by sale format. So please go to Buy Farm Hana, apologies for no live link in the description box, and access the full details of this exciting opportunity.

It would be well worth your time. then they have I guess a video here and an attached document and I'll read some of the specs and I think we'll go to their website so located in Maui County, Hawaii has four employees

see the website for full description and anything else here yeah there's some other stuff okay so let's go to buy Hannah Tropicals 78 year old farmers reluctantly retiring from a 420 acre farm on the idyllic island of Maui Hawaii give yourself a once in a lifetime

opportunity to live your dreams, sees this chance to live your lives well and fully in HANA, a hidden gym on the island of Maui, immerse yourself in the Aloha of these islands, farm organically, live sustainably, and become part of this very special community called HANA. HANA offers a semi-tropical climate year-round, which means you can choose a fully self-sustaining lifestyle. You have 365 growing days every year, so you have the opportunity to grow all your own vegetables and fruit. Chickens and ducks are very happy on the land and provide eggs and meat. Anything additional may be purchased weekly at the Hana's farmer's market, including locally raised beef and pork and locally cost fish. Annual rainfall averages 80 inches per year, so living with a water catchment system is a reasonable

goal. There's enough rain that there has been no need to water irrigate these fields, and there's certainly enough sun to power, telephone, and internet access. The farm was ready for sale in March 2020, but due to the COVID pandemic, the aging owners decided to delay the sale and shelter in place. We spent the lockdown living on the farm with our interns and shockingly had a marvelous time, exclamation point. Our lives continued. The community community pulled in and sheltered its own, and together we all managed. We had a few difficult years. We stopped tourism, of course, this affected our bottom line.

However, we are still able to operate and live comfortably. The potential for multi-million dollar sales when you take over this magnificent farm and other farms on Maui of only 20 acres generate sales of over $2 million, so the sky is the limit with the right investment planning. And should you be thinking of a hideaway in the event of future world problems, this is for you. man there is a bunch more here but i'll pause there maybe so heather you mentioned before recording like you're a huge maui fan yes i we have been going for many many years and we try to go twice a year now used to be once a year but now we go twice a year and i've definitely been over to hona i

don't usually go to that side i stay on the west side of maui in an area called napili um that but I've been over to Hana. It is very wet there. I 100% believe they don't need any irrigation. It rains all the time every day, pretty much. It's beautiful, but it's very hard to access. The road to Hana is famous for being very scary. And, you know, it's a two-lane, windy, on cliffs highway that takes a few hours each way.

And so it's kind of isolated, even though, Maui is its own small island, this part of the island is very isolated from the rest. It feels like you went somewhere completely different because it is just such a small town feel. I mean, I think this is a wonderful lifestyle for somebody, but I don't know that I could buy into how you would make this commercially viable just because of how remote it is and how hard it is to get to. It is, the coolest thing about Maui, if you've never been there, is how many microclimates there are on like one island.

And you have everything from Haleakula, the volcano that's somewhat, I guess it's still active, a Haleokla or is that drive a miscar? I don't think so. No, I don't think Haleakal is. But you can drive up there in the morning and watch the sunrise above the clouds

and you can in the afternoon be down surfing all the way at the water's edge. And then you have the west end of the island that's totally dry. And you have the east of the island. It's like this, like total rainforest, all the time. And the North Shore is different than the South Shore. And then you have Capulua. Capulua is one of my favorite, like on the West. And then of course, Le Hina, where all the horrible

stuff happened. So yeah, pretty far out deal. But I think to your question here, like, how are they, like, like, how are they, like, pitching this as, like, a business? It feels, there's not a lot of things you would expect to see in a business in this listing. Like, revenue would be kind of important. Or even what kinds of, what products are we growing here? There was a lot of pictures of things and some of it, it was, one of them was even soap. But, you know, what are we actually growing? And to your point earlier, what are we growing? Is there something? There's kind of a list here. They have fruit, vegetables, herb gardens, a food forest with avocados, papaya, mango. Then they have like hiking trails. Then they also have moringa trees, which I don't even know what a

moringa tree is, and a greenhouse. What aren't we growing, I think is the question. You can they grow everything. I think it sounds beautiful. This is a lifestyle business. Yes, totally, totally. I also saw a goat farm on Maui once. And I definitely caught my eye, got excited about it and I'm like, well, wait a minute, a goat farm. That sounds kind of hard. maybe that's harder than this, but with goats, maybe you could actually make some money. This is, I think you need farming equipment over there on this side of the island to really make this commercially viable. So you have capex. I don't know how flat the land is.

It's, you know, it's the Hana side. I don't think is very flat. It's very jungly. And, you know, it's definitely got some terrain to it. 420 acres, I wonder how much of it's really usable as farmland. Whenever I see a business, and I'm going to say business and air quotes like this, I always think that there's this other category of thing. Like, this isn't really a business.

Like, it's like quasi real estate. It's like, you know, it's a lifestyle thing. Like, you would buy, it's almost as much real estate and they're kind of making money as they can from the farm. It looks like maybe they're doing some tourism. You know, like you don't buy, someone will buy this. not to make money. Someone will buy this almost as a lifestyle asset, right? Like, this can't be valued on the cash flow streams of the business that is on top of it, I don't think. It's

420 acres in Maui. I mean, that's worth a lot of money just on its own. Like, what business are you going to put on that that eclipses the value of the acreage? Yeah. In Texas, the equivalent of this is owning a ranch. Like, you own a ranch, but you're like a gentleman rancher or a gentlewoman rancher and like they don't really expect to do anything except maybe cover some of their costs but it ends up being like this lifestyle and status thing where you go to your ranch and you invite your friends and like you go there for holidays and you shoot fireworks I know that because they buy fireworks from us and like that's kind of the whole the whole thing and you know you'll go out to these places also and they'll be like they'll they'll have herds of cattle but like it's like if they're

lucky they're breaking even type thing and it definitely feels much more. like that. I have seen that in Colorado as well. My husband's family used to have a ranch in Colorado and their neighbors sold to someone who works it, you know, but he doesn't make any money. You know, he was wealthy. This is just what he wants to do and it's not profitable. So I think you're right. There's a lot of, there's a lot of ranching that almost reminds me of like the wine business. You know, it's just a lifestyle that they don't care about the cash flow. They just love the work and that, you know, what you produce. I think this would be fun. I'm a, I'm a gardener.

So I would love all the different plants that you could be growing there. And some that you probably can only really grow in that kind of environment. That would be super, super fun. So definitely someone with plenty of money doesn't need to make this thing. Cash flow could come in. They could probably make more off of it than it has been making with someone that's 78, you know. But it's probably, like you said, never going to make it worse.

the cost of the of the land all right can we talk about the 420 issue you think maybe they do grow they grow some 420 on this plant as well i mean i'm wondering if the it was 419 acres and they rounded it up to 420 to send a message everything it's the subtext everything it very well could have some 420 there i think as you said maui has uh even before it was legalized i don't think it's legal in Hawaii. I don't know, actually. I don't think it is, though. But even, you know, way before it was legal anywhere, Maui was known for selling marijuana and some, maybe some special kind there. I don't know, personally, but I had heard. Have heard. Yeah. So just a quick Google, in case you're interested, they do appear to have medical marijuana in Hawaii. Okay. Medical.

So, yeah, all right. We did a marijuana farm a while ago. on the podcast, didn't we? Heather, I think this was before your time. Michael, didn't we do one in Colorado with Bradford? Bradford's last name of Escaping Made, but we did a marijuana farming business. I think what we came down with is it's a very hard business. Like, even though it can be lucrative, it's pretty tough. All right, taking a quick pause here, I have something to tell you.

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They are your perfect partner if you want to get bookkeeping out of your hair and focus on making your company your customers happier and more successful. So please give them a call. Call Charlie, cloudbookkeeping.com. Tell them we sent you. They're a great way. If you're a business buyer, if you're a business owner, you're tired of hassling with getting your bookkeeping done.

He's got a whole fleet of people that are. well-trained and work for him. He's located here in San Antonio, so I can tell you because of that, he's awesome. And they're a great partner for you to potentially call to help with all your bookkeeping needs so you can do the important stuff in your business rather than worry about getting your books right. So give Charlie a call, cloudbookkeeping.com, and now back to the episode. What I've heard about marijuana businesses is they're doing it legally subject to all the

regulation and they're still competing with illegal operations who don't have to comply with those regulations. And that that's been the real bummer of investing in the marijuana, the legal marijuana space, is you still have too much illegal competition that's just going to, you know, eat your lunch basically and sell for cheaper. That's what I've heard. Is there, there are some instances of this where, so I'm seeing it's trading, it's a USC corporation.

So, of course, this is Hawaii. So it is America. so all the same tax rules apply. Is there some version of this that it's a giant kind of tax structure that they're trying to do the businesses on the land in order to, you know, have right off a bunch of losses? I mean, we don't at all see here any kind of profit or, you know, there's not a lot about the actual hard numbers of the business. You know, is it possible that you got 420 acres on beautiful Maui and, you know, you're

you're kind of running it as a business so you can deduct a whole bunch of, you know, or you have enough revenue to offset the property taxes. And it's just sort of that type of thing that you got a business on top of the land and it's not a good standalone business. So why would you do that as a C-Corp, though? Because the C-Corp functions as a blocker and depreciation and all that kind of stuff and the losses, right? Like those get retained as NOLs inside the company.

Well, and that's what I wonder if the land is held by the C-C-C-Corp. or held in a separate entity, or not. Well, this also ties back to a point, which is like a lot of people go to loan to market this stuff. And this is kind of what this type of listing is what you see when somebody does a for sale by owner of their business.

And they don't know really what they're doing. Like, they don't know which channel to even advertise on. Yeah. Yeah. I mean, the first sign is this probably should not be on biz by sell because this is a lifestyle business.

What I guess we also saw. that last week, Heather, with the winery. It's like, oh, you guys actually should be, this should be done by a residential broker, not by, you know, somebody selling lifestyle, not somebody, not somebody selling this. I was talking to a founder this morning, and he's considering selling his business, and I was kind of helping him think through that. And it is business real goal for tens of millions of dollars. And he was saying, you know, hey, I've got a couple introductions to a couple of private equity firms. And he goes, I started talking to some investment banks, and they're going to charge me a million dollars to market my business, like, you know,

four percent, something like that. Like, he's like, that's absurd. Like, that's so expensive. And I was like, you got to understand. You're going to get way more than two million, like a million or two million dollars extra for your business if you hire a really good intermediary, you know, that's going to take it to multiple private equity groups. And, you know, this is sort of, you know, as I look on the screen here, if you're on

YouTube, like, you know, this doesn't happen what you're looking at. at in reading here with a really well-qualified intermediary. You know, and you've got, like, you got us, you got confused buyers. Nobody really knows what it is. You just end up not inquiring unless you're interested in building a housing development on the acreage. You know, it's just not, this is why you hire a broker, slam dunk. This is why you hire an intermediary.

I have a client that bought a business and he said, one of the best businesses they ever bought, and they bought several, was from a really bad broker. It was like one of the worst Sims they'd ever seen. did such a poor job of actually describing what the business was, but when they peeled back the layers and saw the gem that was there, they got a killer deal. The buyer did, of course. The seller did not.

So it kind of goes both ways. You have to, how you represent, you know, the business for sale to the right audience, pointing out the right things is a huge swing in the value that you're going to end up getting out of the business or whether you're even going to be able to sell it at all in some cases. Yep. Hire a good broker. geez yeah for real uh and these guys have gone above and beyond and they have created youtube videos custom for listing the place and the lifestyle and i've started it for those of you here on

youtube it's embedded in the biz by sell thing and it shows them like driving around the property on a gator and you know to your point heather it's like super wet and lush there but like what is this like why spend so don't don't do this this is what you could do every morning drive along this little road here looking at your plants. It's an 18-minute video in first person of him driving a gator around the property. Which you know, it tells you what you're getting. But I think it underscores here what you're getting here is you're getting property, not necessarily a business.

And that's why you say they're growing bananas and they're growing matcha tea and they're growing flowers and like they're doing all kinds of, like this is a farm and they are making whatever business they can make out of the acreage. Which also may mean that they can. can't, this property isn't developable. You know, like it probably isn't allowed to be built on. There's a lot of regulation in Hawaii around that. And so, you know, this is probably the highest and best use legally for the land, I'm going to guess. Well, I think that's the key, right, Heather. This is not the highest and best use of the land, period, for sure, but it may be the highest and best use

that is legally allowed. And that, of course, would be diligence point one A. You know, if you were going to buy this, do I have to farm flowers on this thing forever? In which case, it's not a business. But if you can build this into an incredible Hawaiian resort, this might be the steel of the century. The guy thinks he's selling you a flower farm,

but he's actually selling you a site for a resort. You know, the price on those are natural order of magnitude different. There is a problem with that idea, even if it was allowed, I think it would be very risky to try to build a resort on this side of Maui. Because this is over on the Hana side. And the last time I was over on that side, there's one resort, maybe like one little hotel and one kind of resort. That's it. And it's not fancy.

It's very rustic. Everything is very, very tiny over there because it takes, I think, three hours each way. And it's not just three hours. I don't mind driving three hours on a highway. This is three terrifying. For someone like me, this is three white knuckle terrifying hours. It's really a scary drive. So not a good place to build.

Yeah, routinely you'll get on that Hannah Highway or the Hana Highway and you'll get like two thirds of the way there and they'll be like, yep, turn around. Like it washed out. But it's beautiful because I don't know if you've ever done this drive bill, but like every like 100 yards is like a gorgeous one. waterfall and they're like right next to the, they're like right next to the road. It's amazing. It is beautiful. Yeah. I did it with a driver last time because I just, I don't want to drive it ever again.

And he said, just look at the, when we were driving back, he said, look at the looks on people's faces in the car and are coming. And they were like, we're terrified or fighting and we're like mad at each other. People were pulling over to, you know, because they're getting sick, that kind of thing. It's rough. Wow. That's what you need a helicopter. Well, we did.

That's what we did. We did a helicopter one way and a drive back. It's a tour. It's kind of a fun tour. Do you know who has or had the biggest estate in the HANA area of everybody? Was it a beetle? No. Might have been.

Actually, Hanna got on the map because the San Francisco Giants had spring training there right after the World War II. And that was part of Hawaii's idea of, like, like opening up to tourism and getting mainland money in, you know, as the military started to recede post-World War II. So, yeah, the San Francisco Giants, or it might have been the San Francisco Seals at the time. Like, they weren't even the Giants yet.

They had spring training in Hana, which, like, as money as it is, seems like a huge mistake. Like, why is this a good idea? I have to tell you about the bank in Hana. I have a picture of it, I think, somewhere. But it's this, you know how they talk about bankers' hours? There's a little bank branch there, only one in Hana. And I think it's open between like 12 and 3, noon and 3 p.m.

And it's not even five days a week. I took a picture of that. Like, oh, those are good bankers hours if you're living here in Hana. All right. So let me pitch you on this. I think what would be super interesting and maybe possible, like I agree with you, Bill. I don't think you could take something like this and turn it into like a full scale resort, like the ones over

in Kihei and stuff like that on the other side of the island, Heather, there's just no way. But I think you could, where I would dig in on this, and I think there could be an interesting business here, as you make it like an eco resort, but it's not like one of those ones where like your, you know,

mitis and pool side, it's like you're in a rustic cabin and you and your family go and get like totally immersed in nature and in the environment. My gut is maybe you could get away with something like that here, have like 10 cabins or something like that, and they might let you do it, especially given how big it is. But anyway, that also comes down to this whole deal. It's like, okay, like, unless you can do more with the property than what you're doing now,

it looks like you're just buying yourself a bunch of work. Now, Michael, I like that. You pay me to come to my farm in Hawaii. You do all the work. You till the fields. And then thank you for paying me to do my work. And then I will sell the produce. This is a win-win. I'm getting it coming and getting it. You can be our first. It's an immersive farming experience. I love it. I'm signing up in Hawaii. I would actually sign up for that. I would actually do the work. Pay to do the work. Pay to do the work. I mean, it's the, and you could call it Huck Finn's farm. Yeah. So if you're familiar with Tom Sawyer, right? You remember Huck Finn talked to everybody to doing the work? Yeah, painting the fence because it was so fun.

All right. Perfect. I'll own it. You guys do the work. I, it's, I, it's, I, I, it's, I, I think that's sorted out perfectly. Killer. And somebody has to drive me in because I'm not driving. Yep. Well, helicopter you in to work on the farm. Yes, helicopter me in. Thank you.

It's so beautiful out there. It would be so great. But, man, what a project. What a project. It's beautiful, though. Okay. Well, if anybody pursues this one, give us a call. And they have their number and everything.

These guys are definitely like, they're working it. They're really trying to, they're really trying to pitch their deal. It's beautiful. What a tough one. Ian Ballantyne. It's fun. I've Googled here, LinkedIn, Ian Ballantine.

You guys got a sheet there. Let me show you this guy's LinkedIn profile. Does he have a hat? Is he touching his face? No, no, it's not even there. It says, Ian Ballantyne on LinkedIn, no profile photo,

and then his title, he's in Hana Hawaii, and his title is number one worker. I'm going to tattoo that. myself. I think he must own the business. This must be the owner. Who knows?

He's the number one worker. Yeah, it's got to be. I might have to, I might have to connect with them. Yeah, you should. But you know, you see these people and you're like, this guy has got it figured out. You know, like he doesn't need a LinkedIn.

He's living in Hawaii on 420 acres. What are we doing wrong? Yeah. Yeah. He can have a LinkedIn like that and he doesn't care. That's fine. It's funny. Yeah.

those are yeah I love the billionaires where it's just like no picture it's like what's your LinkedIn profile Jim it's like okay

Jim is worth either a lot of money or no money is a very barbell distribution for Jim that is true that is true all right

well cool let's wrap this one up and we'll see everybody next week thanks for being here Aloha Aloha as they say well aloha you

with the next deal Oh.