Fully describe this property and its income earning activities.
A group of 4 guest houses who offers conferencing facilities, transport and extra meals to their guests, who are mostly corporate clients.
What is the approximate age of the buildings?
Two of the houses are land marks in the area.
What is the zoning of the property and what can be developed thereon?
Fully zoned for business rights to operate as guest houses.
Are there building plans available?
Building plans will be made available to serious buyers and during due diligence.
What is the erf size and the size of the buildings?
3 guest houses with 11 double en-suite facilities which include conference facilities. 1 guest house with 10 double en-suite rooms.
Is a property valuation available?
The business broker will provide a qualified buyer with a detailed valuation report.
What Advertising/Marketing is carried out?
The group and its subsidiaries has a web site. Currently 70% of their business are repeat business from corporate clients.
Is the property being let by a letting agency?
This group of companies consist of 4 full time guest houses and the operating company. They also offer conferencing facilities, transport to the guests and extra meals where the income is quite substantial.
Is a copy of all the lease agreements on the property available?
The properties are part of the sale of the for guest houses as going concerns.
Are there up-to-date Management Accounts available?
The sellers provided us with occupancy figures for the past 12 months as well as a sheet with extra income per entity, which includes extra meals such as lunches and dinners, conference facilities and transport offered to clients.
What Balance Sheet and Income Statements are available?
Financial statements for all the entities for the year ending February 2017, 2016, 2015, 2014 and 2013 are on file. Consolidated AFS for the 7 months ending September 2017 are also on file. The auditor also consolidated the group and exclude the owners drawings of R2,008,684 from the income statement and treated it as a balance sheet entry (shareholders loan accounts).
Is Seller finance available and for what amount?
The seller wishes to sell all 4 properties and operating company as a whole for R33m
Who is the bookkeeper/Accountant?
To be advised.
How could the income of the property be increased?
The current average occupancy for the group is 70%. To maximise it to full capacity the owners could employ a marketing consultant to approach all the NGO's in the area.
What is the monthly rates and taxes payable to local authority?
Copies of all the municipal bills and zoning and consents are on file and figures given in each entity mandate under expenses.
What rental deposit has been secured from the tenants?
Guests book and pay in advance and outstanding amount in terms of extra meals, transport and conference facilities are paid for before the guests leave.
How involved is the Owner in running the business?
The owners are involved on a daily basis, they have good management in place and the staff are well trained. A detailed staff list is on file reflecting staff current positions, remuneration and length of service.
When does the current lease end?
N/A properties form part of the sale
Is there an option of renewal & what period?
What is the annual escalation %?
What are the trading hours?
Open 7 days per week.
What is the square meters of the business?
Each of the four guest houses will be viewed and discuss with potential buyers.
Who is the Owner/Landlord?
The sellers of the group of guest houses are also the owners of the properties.
Is a copy of the lease available?
Do you require a licence?
A liquor license.
What lease deposit and/or other surety is required?
What are the main assets of the business?
4 properties, zoned for business rights to operate as guest houses and conference facilities with all its furniture and fixtures.
Are any items not included in the sale?
Some of the antiques in one of the guest houses will be discussed and negotiated with a buyer. The sellers personal vehicles.
What is their overall condition?
The assets are in good condition.
How have they been valued ?
Municipal values, market related property values for the area and business valuation by Aldes.
Which assets are on lease/HP and with whom?
2014 Toyota Avenza 2015 Toyota Quest
What are their settlement amounts?
The two vehicles, which are used to transport their guests are part of the sale. The seller will negotiate with the buyer to settle the outstanding leases.
Will Seller settle or Buyer to take over?
The buyer will settle or take over the 2 lease agreements on the vehicles.
Are copies of agreements available?
Copies of the lease agreements will be made available.
Are they presently insured?
The business and its assets are comprehensively insured.
Well known and well run guest houses with excellent occupancy which is an average of 70%. The guest houses are all situated in between UJ and Wits Universities, next to SABC, Media 24, two private hospitals, Nedcare Rehabilitation Centre, where family members seek accommodation and transport.
No real weaknesses are noted, other than service delivery on load shedding from Eskom.
Marketing of commercial companies and NGO's will ensure increase in conference and accommodation bookings.
No threats are identified.
What is the reason for the sale?
The sellers wishes to retire.
Why is this property a good investment?
Well established guest houses with conference facilities with high occupancy rates. Average net profit for the group is R340,950 per month as at September 2017, ROI and Return on Investment is very good for this long standing group. Bank statements confirmed extra income as turnover for the year ended 2016 reflected R9,022,500. Cash is also not banked.
What is the asking price?
R33,000,000 for the group.
Annual Turnover Amount between R 500 thousand and R 6 million