Acquisitions Anonymous - #1 for business buying, selling and operating - They Want $3.75M for This Pool Club? Analyzing a 56x Earnings Deal

Episode Date: May 9, 2025

A pool club priced at 56x earnings? The team breaks down one of the strangest listings they've ever seen—and tries to make sense of it.Business Listing – https://murphybusiness.com/business-brokerage/detail/21225/popular-swim-club-for-sale/🛠 Sponsored by Capital Pad and Viso Business CapitalCapital Pad: A marketplace connecting acquisition entrepreneurs with investors. Standardized terms, streamlined investing. Learn more: https://www.capitalpad.comViso Business Capital: Get the best SBA loan for your acquisition. Sign up for Heather's free weekly Q&A: https://www.visocap.netIn this episode, Michael, Heather, and guest co-host Travis Jamison of Capital Pad dissect a wildly overpriced swim club listing in New Jersey—priced at 56 times earnings. They dig into the real estate angle, the potential (and limitations) of seasonal community clubs, and the headaches of financing a business with minimal cash flow. Along the way, Travis shares updates on Capital Pad, Heather dishes out some New Jersey trivia, and the crew debates whether the worst listings hide the best opportunities.Key Highlights:A deep dive into a New Jersey swim club priced at $3.75M with just $67K in earnings.Why bad listings might actually hide great deals—sometimes.Real estate vs. business value: when property worth overshadows cash flow.Heather and Travis talk investor/sponsor matchmaking via Capital Pad.Financing challenges for low-earning, high-asset deals.Lifeguard war stories, Jersey Shore property trivia, and more.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]

Sometimes the listing is so bad, I'm like, well, maybe this is worth a treasure event to see it for something here. And any time, I have a hundred there is it. Maybe there's something about this. It's a gift then. I had a client who said the best deal they ever acquired was based on the worst listing they'd ever seen. All right. So the meta game is this velocity is going to get around, look for the bad listings that make no sense. Then brokers are going to purposely make them worse to entice people who they think they know.

It's going to be a virtuous circle here. I'm just saying miracles do happen. And a lot of times miracles happen because the listing is this bad. Hey, everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad. And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs that is people who want to

buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. So if you want to back somebody buying a small business, CapitalPad is a place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors. So the really great thing, too, from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions. They handle standardized terms, standardized governance, standardized distributions all up front in black and white. Basically, CapitalPad professionalizes investing in small businesses. And the returns can be really, really good. I'm so stoked they exist. It's founded by

my friend Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that is appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out capital. Pad.com and tell them that Acquisitions Anonymous sent you. Welcome to Acquisitions Anonymous. Michael here. Today's deal was fascinating. We went through a deal that was priced at 55 times earnings, and we still did it on

the podcast. So it involved New Jersey and a swimming pool. So it was a ton of mystery and a ton of fun. And Travis Jameson from Capital Pad, he joined us today. He was a great guest. co-host as well. And Heather and I had a ton of fun. Here's the episode.

Travis, being, it's so good to see you. Welcome. Thanks for having me again. It's good to be here. So how's the new business going? Tell us, give us an update. I think Capital Pads kind of crushing it. Now it's crushing me, too, because it's a ton of work, to be honest.

But, you know, we're onboarding investors, onboarding sponsors, looking at good deals all the time. So, no, we're really, really happy with where things are out right now. So in terms of kind of the ICP for both ends of it, like deals and like investors, who does that tend to tend to be on each side of the kind of the marketplace? For the sponsor-searcher side, it really is just pretty much all searchers and independent sponsors as long as searchers, their deal has to be a little bit larger than some of the teeny tiny ones. But, you know, the standard searcher stuff and the independent sponsors, they bring their deals and submit them to us. they like pass all our tests and we submit them and live and share them with the investors, then the investors get to look through the deals and see if it's something they might like to invest

them. Uh, well, I mean, I think it's, Heather, you've gone through this experience. I think it's, it's like the more you are forced to kind of talk about your business over and over. Again, eventually your pitch gets like super crisp. Yeah. You're early, man. I got to give yourself some grace in it. So, Heather, how many times have you pitched your business in the past?

year. Oh, gosh. Well, I actually do a weekly. So if those of you who haven't been to it, I do a Tuesday webinar every week. And when you do something weekly, you get really good at it. And I get, I get live Q&A, so that's how I've kind of sharpened up my pitch. All right, let me pitch you guys and I've been to your webinar. They're really good. And I even ask questions out of my own name, not an anonymous. Yeah, you heckled me, I think. No, no, I did not. I did not. I want the record to show I did not do that. No, I usually ask, when I go to webinars, I ask questions anonymously,

so I don't ask anything embarrassing. Dumb questions. Dumb questions to go. All right, so I brought a deal. It is this popular swim club, and it's in New Jersey. And Heather, I know how you feel about New Jersey. Actually, how do you feel about Jersey? A Jersey Shore is all I know.

It's like that, right? I do know that New Jersey spends more money per capita than anywhere else on home maintenance in the U.S. Really? Why is that? I don't know. We did a deal there, and that's kind of where I'll learn that fact. I think a lot of the housing's really old, and it's still very valuable, and so it just needs a lot of money for upkeep. Like, it's a meaningful percentage of people's incomes, like, averaged out that they spend on upkeep.

So the home services market's really strong in Jersey. The house prices are unbelievable, especially on the shore. Like, I've looked at some of these prices now. You know, I went to college in eastern Pennsylvania, so we run on the New Jersey borders, like 60% might be from New Jersey. And like some of the houses, these guys grew up in 30 years later, are like $4 and $5 million, $10 million house. It's just incredible price appreciation kind of on the Jersey area. Yeah. Also, there's some amazing houses. You know, the style is old and beautiful,

and you don't necessarily see as much anymore. My college roommate grew up in this town. I'll pull it up here, Spring Lake, New Jersey. It's become just like, it looks like Mayberry water, to your point, Travis. It's amazing. There's a slight downside. $10 million houses now. All right.

Speaking of, let me pitch you guys on this deal. So it is on Murphy Business Brokers, which I guess is a franchise system. I didn't know it was franchise business brokers. Is that right, Heather? Yeah, just like Trans World. It's franchised, yeah. Yeah. Super interesting.

Okay, so it has a picture of a group of people jumping into a pool, and it says popular Squidn Club for Sale. It's brokered by Deeran Smith, who has a nine-send, 373 area code, which I assume is New Jersey. And the title is Popular Swem Club for Sale. 3.75 million is the asking price. It does $612,000 in sales. They're asking for no seller financing.

So down payment is $3.75 million. And the thing does $67,000 as discretionary earnings. So, okay. So when... Usually Bill jumps in. I get to... I'm squirming. I don't know if I need Bill here.

You do $3.75 million divided by $67,000 a year. It is 56 times earnings. Oh, goodness. Yeah, we're off to a good start. It's a price for growth. So the broker says we are pleased to present this unique opportunity to acquire Premier School Club located in New Jersey. This exceptional property offers a rare recreational developmental potential blend

making an ideal investment for developers, entrepreneurs, and community organizations. Swim Club, located on a sprawling 7.4-acre lot, boasts a beautiful 4,000-square-foot clubhouse for parties. There is a snack bar with a state-of-the-art kitchen, a well-maintained pool, a toddler pool, a slide pool, an ample grass space. The club has significant potential for the addition of various amenities to enhance its appeal and functionality.

Swim Club is nestled in a thriving community that values recreational and social activities, and the club is easily accessible in making it a popular destination for families and individuals seeking leisure and engagement. Swem clubs are an integral part of New Jersey's culture, fostering a sense of community

and providing a gallery place for families and friends. The Swem Club has established itself as a beloved local institution with a loyal membership base and a reputation for excellence. Detailed financial information, including historical performance, membership data, and revenue streams

will be provided upon signing an NDA. It has a stable membership base, a loyal engaged membership community with a consistent annual annuals. Revenue streams, diverse revenue sources, including membership fees, fund lessons, event rentals, and concessions. There is a significant opportunity to increase the revenue through development of additional amenities and services. Please, no phone calls, serious buyers should acquire online only. As $143,000 in furnisher's, fixtures, and equipment, and $5.1 million in total assets, $54,000 in liabilities and a $5 million valuation of the real estate.

So, yeah. So you're not getting the real estate. Yeah. You're not getting the real estate? Well, now I'm confused. I think we were. Yeah, it's like, it's a real estate play, right? Like, no.

Right. But now below it's saying the real estate's worth $5 million, they're selling for $3,750. So I'm confused. And also he put his phone number clearly on the page and said, no phone calls, that bothers me. And here's my next word. Don't call me.

Don't ever call me. Yeah, do not call. So let's maybe start with what does this business do? Heather, do you want to take a stab at that? Yes, I think I've seen something like this in Northern California. Someone was trying to take a run at something similar. So it's like in a community, it's a community pool, basically. So you can you can pay for membership and your family can go,

there for the for the swim season. And they're basically paying dues. And, you know, the owner is using the dues to keep the place up. And obviously, you talked earlier about appreciation of real estate in New Jersey. And I think this is a business that's kind of suffered from that, in that you have this big mismatch between what the real estate is worth and what the business is worth. The cash flow of the business is really, really sparse. And, but the real estate might be worth a lot more as perhaps something else. It kind of says this is maybe not the highest and best use of this property. So that is what I think it is.

It is just a private swim club where people pay dues to use it. Is this, could this possibly be like a poor man's golf club? Kind of like the, you know, similar like the gentleman farmer type thing where are people really into the swimming niche, I guess you say? and they just want to hang out around other people doing that? Is that a thing? I don't know about that. So I think I worked at an almost identical place to this as a college summer lifeguard here in San Antonio.

And I'll show his place to you. And basically, I'll walk through how the model works for these guys. And I think they do pretty well. The difference is these guys local here to me, have a different capital structure. They don't own the land. But it's this place here. So I used to, like, I grew up like a couple miles from this pool.

And it was a pool that was built by the city back in the 40s. And it got, it got kind of run down. And some local investors in my little kind of inner suburb, you know, I live in a Bucci inner suburb. we haven't talked about that. So they basically went in and went to the city of our little city called Alam Heights, who owns this land and said, hey, you want to sign a ground lease with you to take over the pool,

we'll renovate it, we'll fix it up, and we'll make it a place where people come and sign up for memberships each summer, and they pay six or seven hundred bucks to be able to come and use the pool for the summer. And then you buy a kind of snack bar and, well, here it looks like there's somebody out of it. There's some weird stuff, but they still,

it's the Antonio guys. We're still catching up to the 19th century down here. But, you know, they fixed it up and they rent it from the city. And I think they maybe rent it for basically nothing. And then they have coaches during the summer. And then they have people come in

to work it, you know, just temporarily from kind of May until school starts. And then they shut it down each year. But it's precisely this. It's just a pool, a snack bar. And, you know,

bathrooms. And subsidized by the city, the way you're talking about it, because it's a zero dollar ground lease, we're assuming, right? So the city probably takes responsibility for the upkeep of the pool, at least some of it. So I think you can make something like this work if you've got some subsidy, but if you own the whole thing and you've got to do it all, you need a pretty good income stream to take care of all that. Yeah. Oh, and if you see this picture here, if you're on YouTube, I sat in that chair. Like, I was a lifeguard. You were the lifeguard.

Oh, my gosh. Yeah, 30 years ago. This pool's been around for a while. Did you rescue anybody? A couple times I jumped in. You did? But, yeah, it's a, I, lifeguarding is a really hard job. I don't, for me, at least, in the way I'm wired, like sitting there for eight hours a day

with nothing happening. And it's a huge amount of asymmetric risk because you basically, like, your best case is nothing happens. Worst case is someone dies and you're 16 years old and it happens under your watch. Anyway, I do not recommend lifeguarding his job for this reason. So was that too much information? No, that was interesting. But back to the one we're looking at, they own the real estate. And I think that's the big difference.

Yeah, and this is worth those weird listings where is it a real estate listing or is it a? Are they saying that it? it's worth $5 million, but no, we'll give it to you for 3.7. Like, is that, is that the plate? Otherwise, this is just nonsensical, right? 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 vizoccap.net. Then click Zoom sign up in the top right corner. That's V-I-S-O-C-A-P.net and click Zoom sign up. I don't know. What headspace could somebody be in to buy this? That's a legitimate question. Like, why would somebody buy this at that multiple? Well, so the one I looked at, the buyer that was considering it, it was a tennis club at a pool club, but very similar to this.

And they thought that they could develop all these other revenue streams. So I think the listing sort of says that, like, oh, you could do all these other things. But when they really sat down and tried to do a feasibility study on that, there was no way they were going to generate enough revenue for the value of the real estate. And then they looked at, you know, the problem for the seller, at least in that case, case was that the way the property was owned, it really couldn't be used for anything else. So it was kind of a trap. Like, is the real, that real estate really isn't worth that much if you're sort of stuck with this use and you can't get enough cash flow out of this use. So I think it's kind of a, it's kind of a sticky situation for whoever owns this.

Frankly, they've got to get the revenues up. It's only 612,000 gross revenue. So, you know, they would, this, the owner of this place needs. to work on that, I think, before they can sell it. You're kind of limited. I mean, I don't imagine the outdoor pool season in New Jersey is too long, right? Three, four months, Max? Right. I don't know.

We have some relatives like in New England. Unless people get into water that I would consider, like, cold enough to be like a chilled iced tea in San Antonio. Like, it's basically has ice cubed in it. So I don't know. Cold punches. It's like crazy. People started getting into these things in May, you know, when it's just barely, fairly sunny.

All right. So another weird tidbit from a deal we did. The kind of the tri-state area, I think, is the third largest pool servicing market in the U.S. Texas and Florida are number one, I believe. And then it comes like the New York, New Jersey area. Don't know how it works. A lot of this is probably indoor, but a lot of the revenue from servicing it comes. comes from opening and closing the pools, which might not happen in different areas as much.

Yeah. Right. So if you kind of break down, just trying to build a revenue model for these guys, like how are they getting $612,000 in sales? So if you do $800 a season, so that's basically $200 a month for the four-month swim season, and you say you have 600 members, which I think was plus or minus kind of where the pool near me had, that gives you $480,000 in top line revenue. and then the other 130-ish you're doing in beverage sales. The actual, I didn't mention it,

the big revenue driver for that pool near me, they have waiters and waitresses that come around and serve alcohol to people. It is basically, it is out of control how much people are. Let me just say, we're very fortunate that most of the pool is, like, very shallow, like it's standing room only. You go over there, like, on a mid-arred, August day and there will just be like 75 parents sitting in the pool and just everybody has one

of those. Do they do this in other places? Texas loves to do this, these big styrofoam cups just full of alcohol. Do they do that in your places? Yeah, it sounds like a Texas thing. Yeah, I don't know about that one. This is one of the weirdest Texas thing. It's basically like nobody wants to like show off that they're like drinking a tallboy or

whatever or like they're drinking a hardcore mixed drink. So they put them in these like the cheapest giant 32 ounce or 48 ounce styrofoam cups. So if you see somebody out like partying, like that's what's going on with a giant styrofoam cup. Like everybody does it in Texas. I don't know why. This is a great place. This did not mention a liquor license. And I do think you're right.

That could be a big source of revenue. But, you know, a lot of places wouldn't allow this kind of property to have a liquor license. So. How do you convince the regulators like, yeah. we've got this pool. We want people to get really drunk here. I promise it's safe. I promise. Day drinking. So yeah, so that's probably how you get to $612,000.

And then their earnings, it looks like they're running about a 10% profit margin on that. So $67,000. Like, it's all getting eaten up by paying lifeguards and staff and clean. Liability insurance. Yeah. You know, with a listing like this, the broker should really probably give some sort of hint at how, why someone to pay for this, right? Because if someone's just like a financial buyer coming through, like they just skip over it. Like give a hint of why they would want to own this, I feel like.

Otherwise, it will stay here for years. Yeah. So, by the way, one of the things we've been coached on Travis is to argue about stuff. Okay. I'm going to argue with you, but it's meant with love. So it's a fake argument. So look, here's the other side for where I like stuff like this is when there's a listing like this that makes no sense whatsoever, it presents an opportunity for us as potential

buyers. Like nobody in the right mind is going to open this up. I'd be like, you know what I want is a pool club at 55 times earnings. But when you see something that's crazy like this, that means 99.9% of people are going to swipe right on this. And I think this would be what I would potentially call on because it's just like, no, no, you can't call you can't call. Can I text?

No, can't do that. You need to use email. But anyway, like, sometimes when the listing is so bad, I'm like, well, maybe this is worth a treasure hunt to see if there's something here. And at any time, I have 100 there isn't. But maybe there's something about this that's just like, I mean, for example, you could look at it and of those seven acres, six of them are totally unused. And potentially, you could do a deal where you sell that, right, and get more than your

purchase price for the whole thing. And you're left with a one acre pool. You rent it to some other sucker and, you know, you end up ahead of the game. I'm just saying miracles do happen. And a lot of times miracles happen because the listing is this bad. It's a gift then. Well, to your point, I had a client who said the best deal they ever acquired was based on the worst listing they'd ever seen. And it was literally like a legal size sheet of paper that the listing was typed on. And the broker really didn't understand the business and kind of did their best. And this person looked into it and it was a really good business behind that. So it does happen. All right. So the meta game is this philosophy is going to get around, look for the bad listings that make no sense.

Then brokers are going to purposely make them worse to entice people who they think they know. It's going to be a virtuous circle here. I think so anybody who's looking at any of my stuff when I start to sell it. I'm going to give you a sim that's basically written on a cocktail napkin and with snout on it. So then you'll know it's good. You'll pay you whatever I'm asking. All right. Well, Heather, you're going to buy this one? Definitely not. No. I am going to call Darren, though. Hey, I heard you like phone calls. Travis would this make it through the capital.

pads. I mean, as soon as I opened it, I would just close it. I guess we didn't talk about financing something like this. There's no way to finance this, Heather. You actually need cash flow to pay a loan. I don't know if people knew that. Yeah, I think so Heather, your thumbs down. Travis, where's your, where's your rate on this?

I'll just say thumbs down and be polite. I think I'm a thumbs down. too. But just from a, I kind of want to reach out to the guy because it's just so crazy. It's just so great. Like, who, who's the who's the target and he's the buyer for this? Do you have any idea?

That was my big question. Like, give us a hint of why someone would want this. Covered land play? I mean, maybe. All right. Well, I guess got to kiss a lot of frogs. This frog appears to be disgustingly ugly

and crazy. So we'll figure it Anything else on this one? Otherwise, we'll wind it down here. Awesome. All right, everybody. So, Travis, people can find what you're working on at Capitalpad.com. Is that right? Yep, Capitalpad.com.

If you're a searcher, bring your deal post-LO, pitch it to us. It looks good. We present to the investors. If you're an accredited investor, come check it out. We've got maybe one to two deals at a time that we think are good enough to pass. So you can invest there. That's amazing. And Heather, you're at vizzo.net.

Vizzocap.net. And, yeah, if you're interested, check out my Tuesday webinar. I do it every week. And, you know, we're always looking at lots of deals and making sure they get to the right lenders and get the best terms. I want to go to your webinar. I just saw your presentation, like, a week or two ago at the conference, and it was great. I mean, I knew all this or half of this stuff, and I was the front seat just engaged. So, yeah, I want to see your webinar now.

I was I said bash. You guys are both there, right? Yeah. The same week as my conference. Next year we're not going to have them the same week. I actually talked to Kevin. I was like, dude, how do you guys have it at the same time? He's like, we're working on that for next year.

He told me. I thought the conference was great, actually. It was. Yeah. Yeah, this is my first one. So I go in with low expectations, but it was really good. The content quality was really high, but like the people themselves, like I described as like a very like low ego.

bunch. Like, you didn't know who had a $50 million or who was like a searcher with no money. You couldn't tell the difference. And that was really nice. We did have a couple of people, some brave souls who went to Holdco Conference and S&Bash. They were crazy. They showed up looking very tired, but they did it. That's very incredible. Yeah. Well, we're going to stick, we're moving to February next year. And then I think they're going to stick to April, May. So that should be perfect. So I should be able to make. Are you sure? I swore they said they were moving to February. But okay. Yeah. Like, double

check. I don't know. No. No. Well, I said he's been talking to seeing him Rosadi. Okay. Yeah. At our conference, it was pretty awesome. You know, in parallel to how we talked about how we find deals for the podcast, I've delegated

the whole thing. But people would walk out to me and be like, hey, I have a question about like, XYZ thing. I'm like, I was like, I'm like, look, I'm just the face here. Like, I don't know. They didn't even let me be on the, there was like an organizer chat, you know, where they were dealing with issues. I was like, hey, is there going to be like an organizer chat?

Like, can I be on it? They're like, yeah, sure. And then they never put me on that. Like, so, so that was my level of responsibility. Ty says, I told me he was stuck this. We'll coordinate. Well, the feedback on Holdco was fantastic. I had a couple of our snowball members that, that went.

They said it was great. The venue was great. The pictures, they showed some pictures. gorgeous looking absolutely gorgeous Heather next year this is your pitch next year

there was so many conferences in the same two week period this year I don't know what happened but next year will be spread out hopefully

well hopefully we do we do a live episode of the pod which we've done that's fun Travis can be part with it down I'm down

audience participation they can heckle us while we're doing that'd be good it's actually pretty good to be back all right everybody we'll see you next week

Ciao.