Acquisitions Anonymous - #1 for business buying, selling and operating - Georgia Waterpark for sale for $4.5mm - Acquisitions Anonymous 259

Episode Date: January 2, 2024

In this episode, Michael and Bill discuss a listing for a water park in Helen, Georgia, which is also a real estate  opportunity. The property is being marketed by a commercial real estate broker and priced at $4.5 million, with the real estate valued at $3.7 million and a cash flow of $310,000. Bill points out that the listing is contradictory, as it suggests both valuing the water park and knocking it down for development. They also raise questions about why the owner is selling and suggest potential partnership with a real estate developer as an option.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]

Do you ever have something start out incredibly good and then it turns into an enormous disappointment? Well, if so, I have the episode just for you because Bill and I got together, dealt through some internet issues but ended up recording, I think, a fun episode around a water park in Georgia. And you'll see why we liked it and then also, well, why we think it was really confusing. So here's the episode. I hope you enjoy it. 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 And the bad news is it's full of outdated advice and stuff that doesn't work anymore.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 Gridley. I own 12 companies, 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. You got to send me the deal, Michael.

You don't get the deal? Well, I put it in the chat. If this ends up in the live recording, this is proof that this is not a scripted show. Here's the deal and you'll like it. Well, we know that's not guaranteed if you've been listening to the show for any amount of time. I don't know, man. This one's pretty fun. So anyway, how are you doing?

I am very good. I'm excited to be doing this. I have had, if you've been a listener, you've seen, I've had some spotty availability for the last month. I was gone three out of the four weeks of kind of back half of late October, early November, and I'm back in the Acquisitiononymous rhythm, and I'm enjoying. Well, I'm glad to have you. How's your course going? Are you going to launch it soon?

I will need to make significant more progress if I'm going to launch it soon. So hopefully something to launch in Q-1. But you are much more motivated than me and are launching something next week, right? Yes, I'm launching my How to Find a Business to Buy course because my observations were two parts. One is if you go look at the HBR book or a lot of the books about like how to buy a business, they have like eight pages on how to find a business. And they're like, go peruse listings and like call brokers. I was like, brokers do return phone calls. This is a crazy talk.

Anyway, so I took everything I've learned about how modern. like hunting for a business to buy and acquiring one, and I put it in like a two and a half hour course. And what I like about what we've done is, like, we spent a lot of time making it very concise and deep, right? So there's not a lot of fluff to it. Like you can get it done in a morning. So yeah, so we're launching it on next Wednesday.

Sweet. So table of contents is spend 20 years searching for deals, start podcast, review 250 deals. And then people send you deals. Is that how it works? Yeah, you could do that. I do talk a bit about how you can get very creative. There's all these hacks that people do.

You can run a podcast that talk specifically to the type of seller you want to talk to. And they'll be on a podcast where they will ignore you if you send them a cold email and ask for stuff. Other stuff that people just don't even really think about. One of my favorite hacks we put in there is like you start networking with like what I call like old retired guys who like just got out of an industry. and they have nothing but time, and they're super happy to educate you, and they know everyone. And, like, you should talk to those people

because they're, like, a great door to talk to sellers as well. So there's, like, all those stuff that we've put in there. Or you can start your own podcast. So we'll see. We're launching it on next Wednesday, but it turns out my team is highly motivated to launch it. They're, like, every day,

they're like, currently get in there and, like, get to work. So that's why it's moving so fast. Anyway, so, yeah, so look at us. Of course, we've turned, We've gone from regular business dudes to podcasters to gurus. The inevitable evolution of all internet people. Well, in the announcement, I'm going to write up what I think, like, courses have unfortunately been really spoiled.

But, like, I think courses are, like, a beautiful thing because there are these aspects of, like, really important but valuable knowledge that are just good for, like, a very niche audience. And, like, you can't write a book on that stuff because, like, there's just no way you can sell enough of them together. So my hold coke thing was like that. Like the Tam is like a couple thousand people in the world. But it's hugely valuable to them. And I think this like business searching course is like really valuable to, you know, hundreds or thousands of people in the world, but not enough to make its own book. So I think courses are actually really good to fill that gap

of that kind of knowledge. So at least that's what I'm telling myself. Yeah. Well, so I can't remember if it was you or someone else who told me this. Probably you because we spent so much time together. But when anybody is trying to share online, I think a lot of very smart people have this aversion sharing online because they feel like it's guruy and it's like weird and like nobody, like they don't want to be a guru, they just want to be a person. I think you help me reframe it once as it's more being a teacher. You know, it's sharing the things that you know to help other people on their journeys. It's selfless. It's not selfish. And so I think if you approach it, if you approach sharing on the internet that way, and this goes out to anybody who knows anything that might be listening, you know, if you've got cool knowledge in your head,

that you've hard won through years of experience. I would encourage you to share it with people in a teaching way, not a guruy way. And I think, Michael, you've always done a great job at that. You're just trying to help people. And that makes it not weird. That makes it nice. Yeah. But I mean, I think everybody makes the mistake when they first are doing it.

If you look at my old tweets, I made this mistake too where it's like you have to, you have like come at it with like this level of insecurity. So people start doing these like guruy type like fortune cookie tweets and they just suck. Like, just go be a real person. That's why I tell everybody, like, just be a real person and people will, well, they'll cheer for you and they'll believe in you and they'll, they'll have discussions with you. And if you just show up and start, you know, be nice at work and start tweeting shit like that, like, don't.

Like, it's, nobody wants that. Nobody wants it. But here, speaking of things that I want, can I pitch you on this water park, Bill? I do not think this will be very hard, but you're welcome to try. Okay. Okay, so this is, this is from biz by cell. Look, I'm on a crusade. I've decided I'm bringing only cool deals to the stuff

and it's stuff that I get excited to talk about. And so this is a water park in Helen, Georgia, which is in White County. And they have a picture of it. It looks like a pretty cool water park. Like it's got like a lazy river here and a bunch of stuff. Do you see, can you see this that I'm sharing here about? So this, Michael, I have like a belief about the ideal version of America.

In the ideal version of America, there is one of these within driving distance of every human being. Like, this is joy, like, in a, you know, one square, two square acres. You know, there's a couple water supplies, lazy river. I used to go to one of these when I was a kid. We had one. Unfortunately, it is closed down now around here. But, like, this was the best day in my year when we got to go to this water park as a kid.

I think everyone should happen. We used to have one of these in San Antonio. And they had to close down because it kept having shootings. Whoa. So, pupeo. I was like, oh, come on, guys. Like, it was all the wrong side of town. At the water park?

Like, where do you keep it? Like, you're wearing a swimsuit? Yeah, like, people strapped at the water park? It's bad news. So I just looked up where this is. It's halfway between George, Atlanta, and it looks like Greenville, South Carolina. I think that's, yeah, that's where those two are. Well, it's, it's about a third of the way if you drive from Atlanta to Greenville to Charlotte.

it, it's about halfway between Atlanta and Greenville. So that's what we're looking at here. So somewhere in the Chattahoochee Mountains, I guess. Is that what that is? Sure. I'll go with it. Not from Georgia, but that sounds like mountains that would be in Georgia, though, Chattahoochis.

Perfect. Okay, so this is a water park. They're asking $4.5 million. Cash flow is $310,000. So good news, it's a profitable business, which is a good sign. They don't talk about revenue, ebidore, any of that kind of stuff, but they do say there's $3.7 million in real estate here. So it is Helen, Georgia's largest riverfront development opportunity. It's an operating water park with the business included in sale.

It is marked exclusively by TransWestern, tourists by appointment only, and police contact, Austin Hibbard, with Transwestern. So it is located in Helen, Georgia, approximately six acres along the Chattahoochee River, and it is zoned C2 commercial district. city of Helen, an exhilarating opportunity for those who is those seeking to own the largest riverfront development in Helen, Georgia, which includes an already thriving operating business. This remarkable investment opportunity combines the allure of a growing tourist destination with a potential for expansion and development, with Helen's rich history Bavarian charm and over 2.2 million visitors a year. Owning this prestigious development project opens the door to a world of endless possibilities, seize the chance to be a part of Helen's remarkable growth and embark on a journey

that promises excitement, success, and a legacy into the heart of disenfranchining town. So just to pause there, 2.2 million visitors is a lot. Like the Alamo in San Antonio, how many visitors do you think the Alamo and San Antonio gets a year? It's quiz time. Okay, I have been to the Alamo, and it was busy when I was there. I mean, it's got to be less than 2.2. I bet it's about a million a year.

2.5. 2.5. And then San Antonio gets about $40 million. Yeah, San Antonio is actually one of the biggest tourist destinations in Texas and in the in the U.S. Okay, so Helen, Georgia is about as popular as the Alamo, is what you're saying. Yeah, probably more impressive, to be honest with you. Everybody gets the Alamo and they're like, that's it. There was a little bit.

I did find it cool. It was cool, but this was not very big. What's neat about it is because the politics in Texas are so kind of wonky that because of that, you know, we're basically in Texas, we're what California is to Democrats. We are that to Republicans. Like we're one party state here straight up and down. And so the Republicans here have decided that the Alamo is not just a tourist destination. It is a representation of everything great about Texas, freedom, liberty. fighting back, like all that kind of stuff. So it is, they are transitioning in it throwing a ton of money. The state is to turn it into a straight up shrine to liberty. And whatever that means in practice, I don't know, but it's straight up. They're throwing a lot of money to make it really fancy.

So that is a good thing about what's going on in San Antonio. It's going to be more impressive because they're putting a museum and all this cool stuff. So anyway. I would argue that Helen, Georgia in this water park is equally a shrine to liberty and America. just like the Alnath. There should be more of these. I'll go with you. I'll just say, you don't see these in Europe, okay?

This is America. We have water parks. You ever seen a water park in Europe? No, they don't have them because that's what we do here. We have fun, big water parks. This is the meme where the European mind cannot comprehend this? Yeah, pretty much. Okay.

Sample best property uses. Exactly. Back to the listing. Keep existing water park business, restaurants without drive-ins, retail shops, shopping centers with on-side parking, commercial entertainment recreation, hotels and motels, seasonal housing on the second and higher floors of commercial buildings, long-term housing, museum, galleries, and theaters, distilleries,

brew pubs, and breweries. And then there's the whole thing for the city of Helen Zoning Code and things you can and can't do. Real estate is included in the asking price, and the owner is looking to retire from this portion of their businesses. It would not surprise me if this is that kind of profile of person we've run across in the past, who is like the one guy who owns like the insurance

agency, the water park, like the surveyor and the title company and happens to be a lawyer in the town of Helen and like has become the impresario of the whole thing. So it probably owns the town cafe too. I will bet you a zillion dollars that this is represented by a commercial real estate broker and not a business broker. Transwestern. Transwestern is a real estate brokerage. So they are a business brokerage, but this guy, Austin Hibbard, I guarantee you he's double licensed as a real estate agent. I would bet so much money. I mean, this whole listing is about the development opportunity of the land and the details of C2 zoning.

You know, this is not a water park. This is a piece of property with a water park on it, at least the way it's positioned. That's the way they're doing it. Right? Yeah, yeah, for sure. So I pulled up there, well, they have exactly what you're talking about. they have a real estate kind of deck that they have here to talk about Helen Georgia, and it's in the Blue Ridge Mountains, and it's a Bavarian whatever.

And, oh, they have a survey of it as well. Yeah, this is definitely a real estate broker. All right. So I already found him on LinkedIn. Austin Hibbard, subtitle, commercial real estate brokerage. So, you know, this is like your classic two-time in, like, I sell real estate. I can sell a business. Right.

So, I mean, that's fine. Maybe the highest and best use of this is the real estate. Depends on your definition of highest and best use, I would like to see it, Remana Waterpark. Hell yeah. It's America. All right, taking a quick pause here, I have something to tell you. This is Michael.

I hate bookkeeping. I hate bookkeeping. I hate doing HR. I hate doing all that kind of stuff. But for bookkeeping, I have found a solution. It is my friend Charlie's business called cloudbookkeeping.com. So that's cloudbookkeeping.com. 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 St. 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. So it's interesting, well, they market it just like a piece of property, which to me makes it sound like the water park may not be doing so great.

Yeah, so the first thing I would be doing here is teasing out, the independent financials of the water park as distinct from the real estate. You know, you want to understand you're probably buying a piece of property, which you need to value on its own. And then you're probably buying a water park, which you also need to value on its own, because I bet they've got a couple entities here. I bet one of them is paying the other one rent. And actually, that would be the correct way to do it, is to have multiple entities and to have a rental income stream going between them. But you would want to make sure

you really understood that before you did this deal. Yeah, and it's interesting when we go back to the original listing, they value the real estate at 3.7 million, cash flow at 310,000, and the asking price is 4.5 million. Yeah, they've also priced this like a real estate deal. It's like, okay, well, like, A cap? Do I hear Acap anyone? Yeah, yeah. I mean, well, if you also like divide, you take the purchase price and it's $4.5 million, but they say the real estate is $3.7 million. That implies they value the business here at $8.5 million. And that implies they value the business here at $1. $800,000, and on cash flow of $310, yeah, it's 2.5x for the water park is what they're trying to do. But to me, you can't have it both ways. You can't try to sell the land and the water park and describe value to the water park and literally in the same breath say, you should knock down the water park. You can't, you don't get both. You don't get to say, buy this and knock down

the water park, but also I want you to pay $800,000 for the cash flow from the water park. That just doesn't work. It's illogical. Looking at the pictures of these improvements in the water park, there is several million dollars if you wanted to build this fresh. There actually, it appears to be there, you know, maybe they're including that in the real estate value, but like you look at the pools here and these slides and a little like Bavarian like, I don't know, tube tunnel or whatever this is. And then there's interior stuff and machinery. this is millions of dollars worth of water park improvements.

Oh, yeah. I think it's awesome. And it seems like I've never been to hell in Georgia. But in reading their deck, it seems like it says surrounding attractions, the Helen tubing company, the annual Helen October Fest Festival, the annual Helen Atlantic hot air balloon race, the annual Christkindle market, the lake wineries, like, it seems like this is like a destination town. So there's tourism coming to this town, which if you're a real estate of development,

I think is awesome. I think it's also awesome if you're a water park owner. So I would want to understand also why is this guy selling this property now? I mean, this is obviously the question you always ask when you buy a business. Why am I the lucky guy that gets to move to hell and Georgia and own this water park when the guy who currently owns it probably knows everything about hell in Georgia owns this property and this water park? It's probably not the only property he owns in Helen, Georgia, and this is the one he's choosing to sell. Why? So you've got to come into this and say, is this a bet where I have the most information, or is the guy on the other side of this selling me the least attractive plot in Helen? Maybe there's some reason this can't be developed, or maybe it

will be very expensive. Maybe the water park, you know, chlorine of the water park for 20 years means it's an environmental hazmat thing, and you can't build a restaurant or a grocery store on it. I don't know. I just, why is this guy selling this thing now, especially if he's got other properties in Helen? And especially if Helen is on the up and up and exploding, why is he selling this? Why can't he just hold the real estate and let it appreciate it like crazy? Well, they do list here the reason for selling is the owner is looking to retire from this portion of their businesses. So it's like, okay. Oh, red flags, red flags.

Owner is looking to dump this crappy asset on you, buyer. while retaining the better assets. Yeah. Well, I think the other, to your point about, you can just tell from looking at this, what's going to work here is from the listing, the very first sentence when you double-click on their PDF, an exhilarating opportunity awaits for those

seeking to own the largest development opportunity in Helen, Georgia, which includes an already thriving operating business. You know, I think that at this price, I will bet my entire, I'll bet the deed of the house I'm sitting in right now, that there's no way this deal underwrites just as a water park. And that's why they're coy about the numbers. And then this is somebody has to come in and turn it into idol vice, you know, village or something like that.

Like this is a development opportunity where these brokers are pricing it where they see the best use of this property as not a water park and something else. Which, by the way, is totally fine as long as you know what you're coming into. You know, parcels are sold as development opportunities all day every day. One's been sold since we started recording this podcast, I'm sure. And it looks like, you know, this is on the river and it's, you know, it's kind of between the main road and the river. Like, absolutely, build something on here.

I just find this disingenuous to be sold as a business and ask to be to ascribe value to the water park, which, you know, the, and then in the next breath, they say, seriously, knock down the water park. Right? Like, it just doesn't make sense. Yeah. Well, look, I think if you're a real estate developer and you're the type of person that does placemaking out in random-ass towns, and I mean that the nicest way, because you look at where this is. Like, it is not near the highway. I don't know what it's near. It is not convenient. And, you know, it's a two-hour drive outside of Atlanta. And then plus that, if you're going to come from Charlotte or Augusta, like, you know, I think it's a right buyer for a real estate developer, but it's one of those deals you see here on. biz by sell. That's interesting, but it's just a waste of your time to dig into it if you're doing

anything but real estate development. Yeah, I agree. And Helen, by the way, it looks like a wonderful place. You know, it's Georgia's official outdoor destination. It's a mountain town, like the whole downtown is done in this Bavarian style. Like people go to Helen like for the weekend, like to go away to the mountains and do stuff. So I think, you know, it would be one thing if this was like a random water park in the middle of rural Georgia that you just had to drive through, you know, an attraction like this makes sense and real estate like this makes sense because it's kind of this, to your point, this placemaking thing. People are coming to Helen for vacation and there's restaurants and there's hotels and there's all these other things. So if you want to build a commercial park here,

heck yeah. But if you want to keep operating the water park, maybe also heck yeah, but don't pay four and a half million dollars for it. This feels very much like, Fredericksburg, Texas. I don't know, are you familiar with Fredericksburg, Texas? Have you heard of it? No. No. It is 90 minutes outside of St. Antonio,

Northwest. It is a former, one of the, you know, the Germans, when the Germans started to settle in the 1800s in Texas, they got here and all the good land that was fertile and stuff like that, east and southeast of Austin and San Antonio, it had already been, like, divided up, was ranches and farms and all that kind of stuff. So what was left was a bunch of rocky hill country

that wasn't good for much. So that's where all the Germans went. So they settled places like New Bromfels, Fredericksburg, Kerrville has a huge, these are all like kind of up and out into the hill country. And so Fredericksburg is one of the cities that basically, it's not a city, it's a town, but basically it's turned itself into a bedroom,

like weekend destination where you can go and do wineries and walk through Main Street and buy arts and crafts and antiques and go experience that kind of like country style like excerpt stuff. And I think every city has one of those and this is the one here in, you know, this is one for Atlanta where people will drive two hours and go spend a long weekend and up in the Blue Ridge Mountains

just like they do in Frederick Spurgen, San Antonio. Which is the proof that there is kind of durable and continuing demand for this type of thing. cute mountain town that is, you know, hour and a half outside of the place that you live where you go spend a weekend and do a water park. You know, this model works. And so I wouldn't, I wouldn't hate, you know, owning a business in this town. I would, of course, want to understand the tourism trends, the demographic trends of the towns that are within the two hour drive radius that feed it. You know, you want to kind of understand, because these towns do die all the time also if the

cities that are feeding them die. And also, they thrive like crazy if the cities that are feeding them thrive. So you've got to understand kind of what is making Helen Georgia work. And it's probably population and income growth in Atlanta and Greenville, South Carolina. And betting on those two, just from what I know about those places, is probably a pretty good bet. Yeah, Atlanta's got to win. Atlanta continues to win. Yeah, I mean, the whole Southeast, Greenville, South Carolina, if you have never been, if anybody listening has ever been, you should go to Greenville, South Carolina. I drove down there. I live in Charlotte, so it's like an hour and a half, two-hour drive, drove down to Greenville, South Carolina for the weekend with my wife, stayed in a nice hotel downtown.

They've got a river that runs through the downtown. There's a bridge over it with like this gorgeous park all along the river, all these awesome new restaurants and hotels. One of the best meals I've ever had at a restaurant downtown Greenville. Greenville is popping off. And if you live around Greenville, you kind of know this, but it is one of the hotter real estate markets in the Southeast right now. That's awesome. It's awesome. All right. Well, okay, so you're going to buy this water park or what?

Well, I might buy this six and a half acre parcel in partnership with a commercial real estate developer. It sounds good. Or I might buy the water park if the person wants to retain the land and give me a nice long 20-year lease. Right. Then I'll pay a reasonable three times multiple for the water park, but probably not both. It definitely feels in the too hard bucket. All right. Well, I was excited about this one.

We'll keep looking. Keep looking. I like it. I'm glad it exists. Man, this is, I have so many good memories of being a kid going to places like this, just being an idiot. And all the weird, and you get like weird injuries as a kid here. It's like, you know, you're like, why is the bottom of your foot, like, rubbed, from like running on concrete pools, right?

Like that kind of weird thing or like, you know, sunburns on the back of your heel. Like just weird, weird injuries were the things I remember about going to places like this, and I think that's a great part of growing up. I agree completely. I'm glad this exists. All right.

We can wrap it up. Someone buy this and go there to due diligence and take a picture. Yeah, we'll buy one of these. We'll pour one out for you. So, all right, we'll see everybody next week. Thanks for being here. Thank you.