What My First Accepted LOI Taught Me: June Update

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by a searcher from Loyola College in Maryland
in Washington D.C., DC, USA

2w ago

What My First Accepted LOI Taught Me: June Update

Hi Everyone - Sharing in case it's helpful for others - I've been searching for a year, finally got under LOI and three weeks later. I realized that the SDE the broker shared isn't necessarily wrong (although it was off quite a bit), how I would operate the business was substantially different, thus changing the SDE economics. Here are my learnings: redacted Primarily looking for electrical services businesses and/or backup power. If you know any owners in the DC area. Please share this / connect us. 🙏🏽 redacted

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reply by an intermediary 2w ago
from Mount St. Mary College in Orange County, NY, USA

"how I would operate the business was substantially different, thus changing the SDE economics" this is key. When we are building CIMs we have a notion of how a buyer would operate and we use that to calculate buyers SDE as compared to sellers SDE and we test that against DSCR, but if you plan to operate radically differently present it to the Seller and if it makes sense, I have seen deals reprice, but also understand you may show that your vision is not the sellers and can lead to them selecting a different buyer.