Discuss the downsides of this?
Discussion
As far as i can see (the brochure has more detail) this offers a very good return. Clearly the risk is that the bingo company go pop, although the PE investor is pretty much in for the long haul now.
I'm surprised at the rent these guys pay, so they clearly do some good business.
I wonder what kind of cash would be required to get the purchase of this funded? I guess that deposit would be the amount at risk.
Also can't fathom why the PE house wouldn't pressure the group to finance the purchase of this lease themselves, surely a no brainer?
https://www.rightmove.co.uk/properties/141085691#/...
I'm surprised at the rent these guys pay, so they clearly do some good business.
I wonder what kind of cash would be required to get the purchase of this funded? I guess that deposit would be the amount at risk.
Also can't fathom why the PE house wouldn't pressure the group to finance the purchase of this lease themselves, surely a no brainer?
https://www.rightmove.co.uk/properties/141085691#/...
cashmax said:
As far as i can see (the brochure has more detail) this offers a very good return. Clearly the risk is that the bingo company go pop, although the PE investor is pretty much in for the long haul now.
I'm surprised at the rent these guys pay, so they clearly do some good business.
I wonder what kind of cash would be required to get the purchase of this funded? I guess that deposit would be the amount at risk.
Also can't fathom why the PE house wouldn't pressure the group to finance the purchase of this lease themselves, surely a no brainer?
https://www.rightmove.co.uk/properties/141085691#/...
The PE company could enter another CVA and dispose of the property (short lease) at whim. The long leaseholder (assume you) would have to cover the head lease + rates + service charges, upkeep, security + potential refit (ill assume there is nothing overly on onerous in the head lease, and assume it could be used fr other purposes), until you can place a retro arcade/ drive through childrens nursery/trampoline park in place of it.I'm surprised at the rent these guys pay, so they clearly do some good business.
I wonder what kind of cash would be required to get the purchase of this funded? I guess that deposit would be the amount at risk.
Also can't fathom why the PE house wouldn't pressure the group to finance the purchase of this lease themselves, surely a no brainer?
https://www.rightmove.co.uk/properties/141085691#/...
You as the buyer would be on the hook for those terms, + what ever you borrow from the finance company (lets say PG at stake as well).
As a start id suggest you're looking at max 10 yrs term, Rental cover upwards of 200% to cover loan (inc stress tests). Say 1.5m would be circa 19/21k PCM.
Risk is they go pop (again), and your on the hook for 30k PCM, oh and good by to your 7 figure deposit.
Would be far more interesting as the freehold IMO.
Upside,
Not far from the town centre, railway station and major roads, units are dated and not energy efficient, high probability it will be turned in to residential units with planning on brownfield...
36k SQ floor space + say at least 1 (or more floor) x whatever SQ values in that area..
Say 500£ a foot + 70kSQf over 2 floors, 90x 2 bed flats..
Not far from the town centre, railway station and major roads, units are dated and not energy efficient, high probability it will be turned in to residential units with planning on brownfield...
36k SQ floor space + say at least 1 (or more floor) x whatever SQ values in that area..
Say 500£ a foot + 70kSQf over 2 floors, 90x 2 bed flats..
dingg said:
The whole bingo thing will end up being totally played online at some point....
Do you think? From what I can tell the social side of it is as much of a thing as the bingo itself.That said, my cousin and his partner both worked at a bingo hall and were both made redundant, so clearly there are issues in the sector.
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