Acquisitions Anonymous - #1 for business buying, selling and operating - How One Bowling Alley Made Millions Through COVID

Episode Date: June 30, 2026

In this episode the hosts analyze a trendy bowling alley, arcade, and bar concept generating nearly $1 million in EBITDA and debate whether the real opportunity lies in the business itself—or in the underlying real estate.Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletter💰 Sponsored by:FRANZY - Thinking about buying a franchise instead of an independent business? FRANZY is a free platform built for acquisition-minded entrepreneurs who want to explore franchise ownership without broker bias. FRANZY matches you with franchise opportunities based on your capital, goals, and lifestyle—and includes free coaching from experienced franchise operators. If you're exploring ETA but want a structured, system-driven alternative, check out https://franzy.com/ Viso Business Capital — Get the right SBA loan tailored to your acquisition needs with Heather Endresen’s firm. Sign up for a free live Q&A on SBA loans at https://www.visocap.net and click “Zoom Sign Up” in the top-right corner.This week the team reviews a unique entertainment venue in Charlotte, North Carolina that combines bowling, arcade games, food, drinks, and nightlife into a single destination. The business generates approximately $4.2 million in annual revenue and $930,000 in EBITDA, with an asking price of $3.65 million. The catch? The real estate is separate and reportedly worth nearly $9 million on its own.Key Highlights:- Asking price: $3.65 million for the business, with real estate valued at approximately $9 million.- Generates roughly $4.2 million revenue and $930K EBITDA.- Revenue peaked above $5.4 million before experiencing several years of decline.- More than half of revenue comes from alcohol sales, with arcade games contributing high-margin income.- Hosts conclude the most attractive part of the deal may be the real estate rather than the operating business.Subscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo 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]

Hello, everyone. Welcome back to Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. Today, we have a great one. I love this episode. This is in my hometown. This is a bowling alley arcade bar entertainment venue in Charlotte that I have been to. And they included a picture of the logo in the listing. So we know which one it is. We can actually talk really specifically about the neighborhood, about the business dynamics, about the area dynamics. about the area dynamics, stick around until the end because I figure out a way to finance this deal and make it work with very attractive terms.

So without further ado, we'll get right into it. Enjoy this episode of Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line. One of the biggest risk in entrepreneurship through acquisition is buying a business with fragile systems. Unclear demand or a single owner who holds all the

knowledge. Franchising approaches that problem differently. You are buying into an established brand with documented systems, unit level data, and repeatable operating playbooks. The heart part is knowing which franchises are actually worth evaluating. That's why Alex Moresniak, former CEO of Two-U Laundry, built Franzy. Franzy is a free platform that helps acquisition-minded entrepreneurs explore franchise ownership without broker bias. You answer a few questions and Franzy shows you franchise opportunities that align with your capital, lifestyle, and long-term goals. You also get free coaching from people who have actually built and scaled franchise businesses. If you are exploring ETA and want to understand whether franchising fits your acquisition strategy, visit franzi.com. That's F-R-A-N-Z-Y.com. And thanks to

them for sponsoring today's episode. All right, Heather, lead us in. Let's go bowling. Let's go. All right. We've got, we've got a fun one, and I actually know which one this is. It's not hard to find out. But this is a bowling alley, but not like your dad's bowling alley, like a cool bowling alley. Cool. And what I also like about this one is it has a project name. It is Project Kingpin. That just sounds amazing. Hey, what are you working on today? Just Project Kingpin. Yeah. So I'm going to read you guys. the biz by sell listing first, and then I will get into the Project Kingpin teaser. So again, let me reiterate Acquis is anonymous. We do not sign NDAs. This is all publicly available information. So this is an exclusive Charlotte Entertainment concept now available for purchase in Charlotte, North Carolina. I know which one this is. It's 10 minutes from my house. I've been

there. So it is basically a bowling alley plus an arcade plus a bar, like kind of these modern bowling alleys. Looks like really, really nice machines, like vending machines, gaming machines. Yeah, it's got... Whoa.

Yeah, it's got cool, you know, it's a fun vibe inside. Wow, these are actual photos, which is funny, they're actual photos. The bartender is wearing a shirt with the logo of the place.

I did not have to sluth. Like, I'm not like, you know, in case you won proof, I did not sign the NDA. Is the business listed by the owner, you think?

I don't know. There's no link to a broker. There's no headshot. So maybe. Maybe. So it says a proven concept, a rare opportunity. This business has 4.2 million in sales. 930K of EBITDA was established in 2017.

And they're asking 3.65 million for it. So a little under four times, 3.75 times or so. Large caveat. Real estate not included in the asking price. real estate valued at just under $9 million. So we got a business worth 3.6 or asking 3.6. On real estate, who knows what it's worth, we'll come back to that, worth $9 million.

So the total package here is $12.5 million on SD of about a million bucks. So that's like a eight cap if you're a real estate investor, and you've got to run the business. So I wouldn't call this passive. But it is a rare opportunity to acquire a high-performing, performing experiential hospitality brand in one of the Southeast most dynamic urban growth markets. I will give you that. With strong cash flow, a loyal customer base and a unique concept that brands blends entertainment, food, and Bev, the business is prime for scale. Biers will see immediate value through steady profitability and brand equity, plus exciting upside through untapped growth levers like events, corporate partnerships, and potential for new unit development, aka franchising or expansion. Real estate is also available, often further control and long-term value. For strategic operators and investors alike, this is a turnkey opportunity to own a proven platform with real momentum. It says they have eight full-time employees, indicates key staff, part-time staff not included.

So I imagine they got a lot of servers and cooks and things that may not be full-time. So eight full-time key staff. It comes with kitchen and bar equipment, AV equipment, bowling equipment, furniture and fixtures, ops equipment and arcade equipment. The property is located in the heart of Loso, which is a very specific lower south end neighborhood here in Charlotte. It is, it's very obvious which one this is. It's on the guy's shirt.

It's a cross from Old Mecklenburg Brewery, which is one of the most prominent craft brewery in Charlotte. You've been there? Okay, great. So you know where this is. Great spot, packed all weekend, every weekend. It's sort of this whole brewery district where there's probably five or six breweries and distilleries and this place, Queen Park Social,

like all kind of packed into a two-block area. There's like one of those modern pickleball places with like bar and court and stuff, rally pickleball, et cetera. It all falls. So this is like a very hot real estate spot. So I would, I honestly believe this real estate might be worth $9 million. It's on, it's a corner lot like kind of right in the middle of the path of progress with all the school stuff going on.

It says the area is known for rapid residential growth and thriving nightlife. It offers ample parking with onsite spaces and nearby street options, benefits from strong visibility and cross traffic due to its proximity. to popular entertainment and retail destinations. The surrounding neighbors anchored by a large and growing base of multifamily developments, contributing consistent year-round footper traffic. That is all true. Event sales upside.

Focused outbound sales can activate substantial upside in a high margin under-exploited revenue channel. Strengthen community and group loyalty. Gaps and management led to a loss of recurring bookings from sports team fan clubs and other groups. Oh, that is really interesting. ...fan club or whatever on Sundays. new ownership could help the team rebuild those relationships and recapture lost revenue. You should also work on the marketing technology systems, which are underutilized. Enhancing campaigns and optimizing digital tools can boost event attendance and repeat visits.

Existing management staff will remain in place, ensuring a smooth transition. Current owners are available to support the transition and assist future growth planning. The owners are seeking an exit to focus on new business ventures, offering investors a great opportunity. it is 18,000 square feet. So picture like it's probably, you know, six bowling lanes, a whole arcade area where you kind of load up money in our card and you tap it and play games.

And then a full bar area, a full kitchen, et cetera. Any questions so far? I have financials, which is cool. Oh, wow. So here's the general trajectory. It's wild to see these hospitality businesses through COVID. If you're with us on YouTube, you can see it on the screen share.

I will blow it out. It's a lot of history. Yeah. Yeah. This business has been around in 2017. But I mean, I'm shocked when a teaser in particular, we got one, two, three, four, five, six, seven, eight. We have nine years worth of financials in the teaser. I mean, they don't bother hiding the name of the business.

Why bother me? Yeah. So what's interesting is we have a revenue breakdown. So I'm going to give you the kind of revenue trajectory. this thing. So it's founded in 2017. It does 3.3 of sales and 845k of EBITDA that year at a 25% margin. It runs all the way up to 5.3 million in 2019 and 1.8 million of EBITDA. Then of course we have COVID. It still manages 2.6 million in sales and 645K even through COVID, which is saying something. So it does not lose money even in COVID. Now it does say adjusted EBITDA,

but you know who knows uh then right after covid it pops right back up in 2022 it does 5.2 million and 2023 it does 5.4 million uh and 1.9 million of ebadine both of those years but then 2024 it drops to 4.2 million and 2025 it drops to 3.5 million um and what's interesting is its margin compresses also as that happened from kind of in the high 30s on ibupat margin to about a and then a 27% EBITDOMR. So this is a substantial revenue drop in the last kind of 24 months or so,

which is sort of surprising to me, given the location, I would think this is, they say it's because they're not bookies many sports team fan clubs. I think this is competition. Just knowing the area. Everything to do.

More things to do. Tons of stuff has opened up in this area. I mean, this area is just white hot. Charlotte is white hot. Like, there's just a ton of options. And wasn't 21 and 22 probably a post-COVID boom where everybody was just so excited to be able to get out more that they, you know. Could be. And that actually continues through 23.

23 was their best year. That's true. Almost 5.5 million and 1.8 of EBIDDA. Yeah. The thing just blows me away is whoever owns this has owned it for eight years and has, I can't do math this fast, but probably has 10 million bucks of aggregate EBDA. Yeah. here? I mean, in a hospitality concept and is sitting on property worth $10 million? So I don't think they own the real estate. I think it's not included in the sale price because they don't own it.

Oh. I think they do. Why do you think that? Well, I looked it up and it's owned by an LLC called Mech City Social Real Estate LLC. and it looks like it last changed hands in 2019. I wonder if they bought it in 2019. I don't know. I mean, I didn't dig into the LLC. So Matt Livingston, whose name was on the listing, it's down at the bottom of this. He's a real estate agent.

It's thrift commercial real estate. And they, if you look at their website, it's all like hot, you know, commercial property listings leasing in Charlotte. They're big here. Yeah. But it's just interesting. So like you have a commercial real estate person who is marketing the business. For a second, I thought like maybe this was like a chat GPT teaser, you know, that the owner had done for himself.

But then when you got down to the thrift part, I realize it wasn't. But see, that's Mills. That's what makes me think they do own the real estate because the real estate is most of the value here. Right. And representing the transaction is a real estate broker. So, well, I just wonder if they're not actually. selling it. You know what I mean? It's listed with a value, but let me see if I can search this address. We can keep talking about other things. While you look for it, I'll give you a little bit

more about it. What's interesting is they give us the revenue mix. So it looks like it is, of course, this is like the worst chart crime ever. They give us revenue mix. It's a pie chart with five slices, and they're all five different shades of green. So you can imagine five different shades of green like how many shades are between them, not many. But attempting to zoom in here, if you're with this on YouTube, they look like they're going to do about 25% of revenue from food and non-alcoholic beverage sales, about 36% from liquor, about 21% from beer and wine sales, and about 13% from games and retail, and 5% from other. And this is the aggregate over the eight years of that we have. So if you add up kind of liquor and beer and wine, because, you know, I think

that's roughly all the same. That's going to be 57 of sales. And then you got food at 25 and then the other entertainment stuff at the other 20 or so. So that's kind of a rough breakdown. So this is a bar, right, which is good because that's probably the good margin stuff. The food is probably less good margin. And then the games is probably close to 100% margin, which is nice. right so that's probably what's driving the profitability of this you've got 18% of the business at 100% margin right so that if you got 18% net margin there it is right there right a huge portion of it is the games so i want to understand kind of a flow through by segment so i'm guessing food is zero margin to negative games are close to 100% and liquor is single digits you know 10%

I would think after all is said and done, and that's probably how you end up with, you know, a business with 20% net margins. It's been remarkably resilient. Mills, do you find anything out about the property? It's not for sale. It's not for sale. Well, it's not on the road. Real estate is always for sale. Yeah. Right. So it's not, it's not under their listings, uh, on their website. It could be that, yeah, it could be that maybe they've already sold the building or that I honestly think that the, the, existing owner of the building, the landlord of the building, is probably keeping it. And I don't think it's related to the business owner.

Interesting. It says limited owner involvement, proficient management team can enable new owners to remain strategically involved without being operationally embedded. So we don't actually know. But the counterpoint to that is they've had management issues in the past where the business drops by what, you know, a million to two million dollars top line. So that's a great point, Mills, because they say in the teaser, all the management will stay, you don't have to be that involved.

And then they throw them right under the bus and go, management sucks and they've dropped the ball and we've had management transitions. So which is it? Yeah. Yeah. For a business of this size, I think you have to be pretty hands-on. And what's interesting about bowling centers is there's kind of two types anymore. There's the old school that have the league still.

and the food's not that good and the ambience is not that good and then there's this type. And I think I've seen buyers looking for the old school types to upgrade them to this type. So it feels like there's not as much opportunity to improve things

because that's already what you're getting here. And they talk about scaling, but they don't talk about like utilization. So how much more can you grow? I guess you could get back up to the 2023 level. but is there is there much more than that can you can you grow it's hard to know my sense just kind of knowing the area this is in this the guys who own the real estate and the guys who own the business the business remember has put up 10 million bucks of aggregate ebidda over eight years

amazing uh the real estate has gone from a backwater to worth probably nine million bucks over about the same time period so there have been close to 20 million dollars of value creation here in the dirt and the business. And whatever the business happens to be worth, it probably would not worth nothing either. My sense, though, is I wouldn't want to be the one coming in to buy this business because I think most of the value has been created

and I'm not sure this is the highest and best use of that parcel anymore. Given how long a neighborhood has gotten. That's my concern, is that, like, you're seven years in, maybe they had a five-year lease and they, you know, extended for another five or re-leased it for another five. But that's the tricky part of this. Yeah. So if it's, if you're trying to get an SBA loan, the SBA is absolutely going to require you to have a 10-year lease, you know, five-year remaining term with a five-year option so that you can stay in this facility for at least 10 years, which is the term of the SBA loan. So, and they didn't say SBA pre-qualified.

And, you know, they usually say it if they want you to go that direction. And so I think maybe that could be what the issue is here is that there's not 10 years left to go on this lease. And there's a risk, you know, to buying the business with less than that to be able to stay here. Heather, SBA side, I'm not buying this business with you have 10 years left on the lease. I mean, no one is. Like this is a local business. Like this business loses this lease. It's over.

Yep. you know, you have, you need a 10-year lease to buy this business. You know, what's crazy is they're asking almost four years, four times cash flow for this business. I don't even think the lease probably has that much left on it, given Mills's, you know, back the envelope math. So like, somebody bought it in 2019. So, you know, that's probably the time at which this new lease was created and it probably doesn't have much left on it. Maybe it's to 29. Yeah. Yeah. Yeah. Tough. The other interesting thing in this space is that Lucky Strike, or it was Bolero, but they've rebranded a Lucky Strike,

they're a publicly traded Consolidator in this space. And like when I started searching for bowling alleys in Charlotte, like there's Lucky Strike, you know, Pine Bowl, Lucky Strike, Uptown, like they have, they have it covered in terms of the more old school kind of traditional type bowling leagues. But I love when there is a public market comp when you're looking at a business, because you can go in and say, okay, how big is the Tam? How many locations do they have? What is their revenue? What's their revenue per store? What's their net margin? I mean, like, the amount of data that you have at your fingertips is just like captivating because you can do a lot of due diligence on the industry as a whole, especially something like this where, okay,

maybe Bolero and Lucky Strike don't have arcade games to the same extent or the bar to the same extent as this or some revenue mix, but there's still a lot that you can garner from that data. Oh, yeah. This is, I mean, having been to both, like Lucky Strikes a good comp here. Okay, yeah. Definitely. Which they do, it looks like they do about a billion dollars a year in revenue. You know, Lucky Strike does.

Well, Lucky Strike is, they are like AMF bowling. I mean, they're giant. They're like, what's interesting is old school bad ones and the new sexy ones. They have both in the portfolio. Lucky Strike owns the professional bowling league, which is like the ultimate play. You know, that you're the venue and you own the professional league. That's amazing. Yeah.

These guys are the bowling market. Lucky Strike is. And I would say, like, there is not a lucky strike across a street from this place. I don't know that there will be. What there is is a rally pickleball. You know, sexy pickleball. ball. There is a whole bunch of distilleries and there's just a lot going on. So I just, I think personally, in order to do well with this, like it's probably, and also this is a restaurant

and kind of as an entertainment venue, it's eight years, like, not trying to pass judgment on this place. Any place is getting a little long in the tooth, right? After eight years, it probably needs some refresh capax. Yeah. You know, just to compete because all the stuff around it is three years old, you know, and new and fresh and going in. So that's what I mean about, like, I think a lot of the, like the first phase of this parcel and this business are kind of extracted. And I think there very well may be another phase of this parcel and this business, but I don't think it looks like the eight years in the rearview. So maybe it's not the staff's fault that they lost those relationships. Maybe they just went to a better venue. Yeah, maybe we don't

I'll throw the staff under the bus. Yeah. Hi, Heather here. When I'm not breaking down deals with these guys, I'm helping people get the right SBA loans for their business acquisitions. Because when you're buying a business, the best financing isn't one size fits all. There's the best rate, fastest to close, the specific loan structure that you need, or a little of all of those things.

That's why my company, Vizzo Business Capital, works with over 30 different lenders to find you the best funding in less time and with less friction so you can focus on the deal. Sign up for a free live Q&A session on SBA loans at VisoCAP.net, then click Zoom sign up in the top right corner. That's V-I-S-O-C-A-P dot net and click Zoom sign up. One other interesting thing on the publicly traded side. Lucky Strike has lost money. They've reported negative net income for three out of the last four years. Ooh.

Yeah. Now, it seems like this business weathered COVID well, and they've rebranded. sounded really well in terms of, you know, maybe there's some management issues and maybe the owner was not completely attuned to what was going on until maybe it was too late or something like that. Or maybe that's just like the convenient thing to say and there were other things happening. But the business, I will say in those financials, they specifically said 2025 estimate, not 20, 25 year to date. So right now it looks like the business is going to be off by about 20% year over year. I mean, that's pretty substantial. Their revenue is going down by $750,000, and their EBITDA is going to stay the same, projected.

And this is a little bit old because that was 2025 estimates, and we're obviously recording this in 2026. That's three straight ears of decline. And guess what banks feel about declines? Not warm and fuzzy feelings, right? You don't love it? You don't love it? But we can turn around, Heather. Yeah.

Sure, sure. It's going to be fine. Yeah, so you're not going to be able to get financing for this. I mean, I think there's probably a lease term problem, and there's certainly a revenue decline problem, just that we can see right off the top. So, and they didn't offer seller financing, but I think that's the only way anything like this trades. I bet they can't. I mean, I think this owner is totally stuck in a pickle where they have multiple years left on their lease. they have a falling knife

and they can't sell it and can't continue. Maybe they can. Maybe maintaining it for the next few years and trying to just see out the end of your lease term. But this is one of those things where, Bill, you know this area better than me and Heather, but they probably got in before it was really cool and they got in an attractive lease rate

and maybe they had one option pre-negotiated. But you helped gentrify an area by being a cool business and the landlord holds all the cards at renewal. And now it's like, hey, look, we've got, you know, we're across from old mech, and there's a lot going on in this area, and there's people who are willing to pay more, maybe a national brand, who can take a building this big bowling or not. The one thing I think this has going for it is the infrastructure for bowling. And now it's not, you know, it's not like an in-ground swimming pool inside the building or something.

But this would be very hard from a Kappex standpoint for a purchase. sure to move somewhere else. So like we, we, you know, acknowledge that, but it would also be really difficult for the landlord to put something else into the space without a lot of tenant improvement allowance. So just kind of back the envelope, right? So this business, it is still making a little under a million bucks a year, $973,000 of EBITDA, adjusted EBITDA, so we get into it and see. So you might be able to run it out unless revenue is just totally crashing. But to the point about the lease rate mills,

so let's take the broker at his word that this property is worth $9 million. You know, I don't know, like if you own this property, I don't know what kind of cap rate you're going to demand, right? But let's say it's 8%. Yeah. So that means your yield is,

like the rent here has got to be $720,000. I don't know what it is now, burdened into the P&L, but I mean, that's what, 60 grand a month in rent? Yeah, I mean, absolutely. That's a lot.

I mean, this business has 9753 of EBITDA. Let's just say their leases at half of market rate right now. So it's going to go from 350 to 700. So you're going to have another 350 of rent expense coming into it. So you're going to go from 3 or from 975 to 600 of EBITDA upon lease re-rate. it's still not terrible. I mean, it's making money. Especially if you own the building, man, you're just printing.

Like, you've got this cover land play. The building's appreciating. But like, the issue is if you're adjusted, if your actual adjusted EBIT doc gets down to 500,000 or 600,000, you can't pay $3.6 million for it. No. No, I think you can pay. And also, we haven't, like, like the cap X if you got to refresh this thing. I need half a million bucks of refresh. You know, so, like, you got to take that out of the purchase price, too.

Can you pay a million bucks for it? Probably, right? But you got, what I would do is kind of the classic restaurant playbook, which is you close it. You put a new coat of paint on it, and then you reopen it with a different name. But it's not that different because this business, like the location is the killer thing here. And either they're walking across the street to go do it or they're typing by keyword bowling or arcade or like Queen Park Social is probably not the key thing. You reopen it as low-so social and it's sexier and cooler and maybe you put a pickleball park, you know, court in the parking lot and it's new. You know, that's probably the play here. But you're going to need some landlord support to do that. And seller support. You can't pay for it. If the landlord is supporting you, guess what? you are paying for it.

They're just amateurizing it over, you know, a certain period of your lease. And then the lease will rewrite higher again. Yes. At the end. I mean, this is just so interesting because God bless the entrepreneur. I mean, this guy has made $10 million in eight years in a hospitality concept through COVID. Through COVID, yes. That is wild.

Like, this guy deserves the platinum medal of restauranteurine. I mean, incredible operational success here, never had a negative year, never had a year less than $645,000 of EBITDA, which was the COVID year. I mean, pick the neighborhood perfectly. Like, this guy crushed it. I just don't know that I want to be the next guy. Also, I mean, look at this. They own all the bowling and the arcade equipment. I mean, there could be the balance sheet could have, you know, a million dollars worth of.

Now, they're depreciated if they're seven years old. old and maybe they've done some refreshes, but that's a, that's pretty significant. I think that a lot of people, when they're starting this, they go, oh, that's going to be a lot more money off the rip. I'll finance my, you know, my arcade games or my pinball machines or whatever, you know, they're mostly all like digital now. And all of a sudden, yeah, it's, it's a lot less capital off the door to start. But, I mean, you're losing a lot of margin. So they do make that point. And I think they're very right about it. That's a, that's an asset for sure. It is. They don't. list FF&E, but there is definitely real assets on this balance issue. So, interesting. All right,

Heather, you're not giving me a loan to buy this thing, right? You're not going to get a loan because of the revenue decline, not even an SBA loan. No one's going to do that. So it's like in the bank size, this is a turnaround. Like, what you're talking about is just kind of riding it down or, you know, letting it ride flat and you could still make money at the right valuation, but even a bank won't go for that. They want to see flat or modest growth. They do not want to see declines. And this is the kind of industry where you need to have restaurant or bowling experience or both preferably because this is not, you know, something that a newbie should come in and try to run an industry like this period, but especially one where they've been having declining revenue for

three years. But Heather, I have tons of experience going to restaurants. And I bowl. before. And I have bowled over 200 once. That's not true. But Mills, if you had to do this deal, how are you doing it? Would you do this deal? I don't think so. I mean, I would much rather be the landlord who, it looks like, paid less than $2 million for the building, you know, in the last 10 years. I think my issue with this is like you're penalized by being like late to the trend. Like for the same reason that we've looked at pickleball stuff and it's like gosh it just seems like you're so maybe there's a few more years and maybe there is some durability to the you know to the nostalgia of it and the ambiance and the skill and the competition and all i just would be like trying to figure out what's the next thing rather than being late to this now bowling's been around forever i don't think it's ever going to go to zero um i just think that i would much rather be the guy who collects $10 million of EBITDA over the last 10 years,

you know, eight years and is then trying to figure out what to do with it. Yeah, you've got to hand it to the entrepreneur. All right, here's how I think I can make this work. You're, we're, this should be real estate anonymous. This is the wrong podcast for this business. You kind of hinted at it Mills. You'd rather be the landlord. The building, you got to buy both or nothing.

There's no version of this where I buy just the business. I have to buy both. So your purchase price is $12 million. No, I think you say it's $10 million and I'll pay you $9 for the building. Yes, something like that. Perfect Mills, exactly. So you're buying the building at market rate. You're speculating on the neighborhood.

It's functionally a covered land play here. You're going to buy the business, you know, and this is why I'm hoping the ownership is common, right? Yeah, they're going to want, or at least somewhat overlapping where they're going to want to sell both. they're going to get more for the business and the real estate than the would for just the hollowed-out shell of the building and say, okay, 10 million bucks. Heather, I want to do a combo 504-7A for this thing. We're going to ascribe almost all the value to the building. All right. Can I get a- And you know what's going to happen? You're probably going to get that loan, right? Yeah, there's no loan here, but that one you're probably going to get. See, Bill is smart. Bill. High five, dude. That's awesome. Yeah, Bill did it. Because real estate SBA loans are much easier to qualify for. And if you're only paying a million dollars for the enterprise, you know, there's probably a way to structure it.

So it's just mostly real estate covered. In a 504 scenario, the bank is making a conventional 50% loan to value loan. So they're fine. And the SBA is making a direct 90% second, 90% LTV second. And so if you can get a CDC, the certified development corporation that does the 504, and they like bowling centers, they understand it. You can probably figure out the million dollars for the enterprise, some other way, seller note or something else.

You could even get a 7A loan for that because you've got so much real estate. All right. So I've got $10 million of purchase price. I can max out my 504 loan at $5 million, right? Yeah, yeah. And I'm paying a million bucks for the business, basically, right? So can I get a $4?

a million bucks of SBA on that, maybe? I think so. I think for the right person, yes. So you could use that new combination where we get more than $5 million, where you can get $5 million in the 7A and $5 million more in the 504. The $5 million in the 504, by the way, is not the total loan. It's just that 40% second. So when you look at a $5 million maxed out 504,

the purchase price max is like $12 million. So you have plenty of... What's the amortization period on this? Those are real estate loans primarily, so they're usually 25 years. If it's equipment, it could be 10, 15, 20 years, depending on the useful life of the equipment. So we're getting very good financing with a very low. Do I need any equity to buy this business? You do. Yes, you do need some equity. Then the building, the package. Oh, yeah. You need, yeah. In that $10 million package, I think you need probably at least 15% equity.

Because of the declining trends and just because of the way we're going to have to structure the deal. I think you need 15%. So you need a million and a half dollars to come in. So for a million and a half bucks, I own a building this worth nine and a business that cash flow is a million bucks a year. I think we need to go make this offer. Right? So it's going to, so I'm going to put down a million and a half.

I got a million bucks of cash flow. Service on my loan is probably almost all the cash flow. Yeah. I would think, right? Depends on how much market rent is baked into that EBITDA. We don't know that yet. That's right. Good point.

But probably not quite all the cash flow. So I'm probably still clear a couple hundred K of annual cash flow. And I own this. And that's probably so I've got cash flow. I'm yielding on my 1.5 of equity, you know, probably 10%. Let's say I got 150. Maybe I got 300k of cash flow. I might be yielding 20% cash on cash.

And I'm free riding on the appreciation of the building. And you're bowling every day. And I own a bowling alley. You guys can all come. We'll record the podcast and an arcade and everything. And a bar. I thought we were going to own it, Bill. I thought we.

We. You guys want to go in, Heather. Now, do you want to finance my building? Now I do. Now that I get to come bowling. Yes. And that, ladies and gentlemen, is why storytelling matters in underwriting. It's true.

It's all about house friend. I just flipped Miss Pessimist, and now she wants to finance my deal. That's amazing. And invest. It's a lesson in storytelling and probably more important than that, how much banks love real estate. Yep. Banks love real estate. You want an easy loan, have a bunch of real estate. You want a difficult loan, don't have any real estate. That's the truth. So there is a deal here. You can't pay 3.6 for the business. Yeah, you need to buy both. You need to buy both. You just can't buy one. And you need to bring that kind of real sweet, sweet real estate financing to the table to make it cover.

I mean, I do think there's a clue here that the real estate must be available because why did they put the value of it? And why is the broker or a realtor? Yeah. I'm just telling you, it's not maybe it's already sold, right? Maybe they did like some kind of like, hey, we executed a couple more years on the lease, but the building has already transacted. Mills. But it's not in public. Very closely.

Look, real estate is also available, offering further control and long term value. But see, it's not on their website. Bill's deal is good. I think before we hit before we publish this episode you should float an offer to them 10 million bucks is right here here's the problem I don't want to work you don't want to work this this my like one rule in life never own a restaurant yeah it's like the old I think everybody has to do it once bill is the real rule and you've got kids they love bowling that is the rule mills I don't want to do that that sounds like I want to be the exception to the rule I don't want to be the exception to the rule I don't want to be the dude who has to learn the lesson the hard way because everybody does it once and never again. If I wanted to own a bowling alley restaurant, that's hide structure it. I still think you should reach out and float the offer just to see what info is out there.

It's in your hometown. You can give it to somebody else. Yeah. Yeah. You could wholesale this deal. Get it under contract and wholesale it? No, but you should honestly try and float the offer just so we can see what they say, because you might like it more as you get further into it.

I guess I just can't sign any NDAs. Although I guess I've already podcasted in the can. So anything I'll learn after this. Yes. Doesn't count. All right. Well, hope you guys like that one. That was fun.

Dude, that was awesome. All right. Thank you for listening this episode of Acquisition Anonymous. This is the first bowling alley we have ever done, I think. But we have done 500 other episodes in different industries, different types of entertainment concepts, e-commerce businesses, construction businesses, music royalties. I mean, you name it. We've analyzed.

it on the pod. So you can go to ACQUanon.com. You can find the whole back catalog searchable by industry. You can also get on our email newsletter. We will email you the episodes twice a week. So if you're not an audio person, you don't like the sound of my voice. You can get it in text in your inbox also, ACQUanon.com or find us on X. All the hosts are individually on there or the pod is at that same handle. Thank you for joining us on this episode. We'll see you on the next one.