Business move advise wanted.

evo

evo

Been here much more than a while
Location
My Island, WA
I know a guy who is offering to sell me his setup. It seems like a fair deal, but there are some things I need to get advise about..

He is selling 2.5 acres with a little 650 sq foot cabin, new well, newer septic, a 16x16 aux living space building, and 2-3 smaller outbuldings/tool sheds. Every thing seem great and in good working order with the land and buildings, some still need finishing touches. This is valued at 133K through the tax assessor.

Now he has a woodmizer sawmill. Larger size, but no hydraulics, and not on a trailer.

A '87 international DT466 with a smallish knucleboom (~25') GVW of 26K so just under CDL, and really clean.

And a older forklift recently rebuilt for moving logs ect...

We currently rent, and he is willing to sell it to us, and carry the loan.

I am having fantasies of bringing home logs, build our real house out of, and a side hobby business of slabs.

He itemized everything out tonight on the phone and the truck and mill seem high. 20K for the truck, and 7,500 for the mill (including peaveys, 12 or 15 new blades, ect). Added together it all comes to 161K, and I think he'd take 150 or so. This would certainly be a jump from renting, and running a part time gig with a 9" chipper, and a F250 with a dump insert.
However I'm doing really well for my business, considering hiring, and expanding soon.
 
What will be your monthly payment on the loan? Can you comfortably swing that now? Was he able to show receipts and tax returns on what his business brought in? Just a few questions that came to mind.
 
Well that's the thing. I wouldn't be buying his business, as I don't want a second business. I certainly use the truck for tree work, perhaps a little under gvw considering the extra weight of the boom.. I could bring logs home, mill em up to build our home, and make some slabs on the side. I think I should be able to swing the payments just fine, considering I have doubled my net income in the first 18 months of starting my own gig. This is averaging two days a week in the field working, + a half day for books and bids. (16-24 hrs a week as a employee too) At this rate I've been constantly 2 months out for the past 8 months, and never hungry. Payments would only be $250-$300 more than what rent is now, living space will be a bit smaller, but it also comes with all the toys too.
 
Do it, and don't look back. Luck is when preparation meets opportunity. I think you are at a phase in your business where you are only going to make more money. Also, your not talking about purchasing a crane where it will depreciate every year. Your purchasing a solid investment in land and property that you can build equity in and possibly borrow against in the future. A 300 dollar more a month payment equals out to about 75 more a week you have to make to cover the added cost. I think that can be easily done. I would jump on this opportunity. If it feels right, do it.
 
Seem to me the truck is high, the mill is right on (if it's truely a larger mill) but the land is a really good deal. I know a little about the decision you have in front of you. It's a very difficult one and it's important to let the numbers make the decision for you. Don't let your emotions or your significant others' emotions cloud your judgement. I asked a friend of mine what he thought about a situation much like yours, he simply said "when you know it's time you know!"
All I can say is Good luck in what ever your decision winds up being. And of course keep us posted.
 
As you embark upon your journey of ownership over the means of production, I leave you only with these words of Karl Marx as a portent, a waypoint, a marker:

"Within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker [...] All means for the development of production undergo a dialecticalinversion so that they become a means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment, they alienate from him the intellectual potentialities of the labour process [...], they transform his life into working-time, and his wife and child beneath the wheels of the juggernaut of capital. But all methods of the production of surplus-value are at the same time methods of accumulation, and every extension of accumulation becomes, conversely, a means for the development of these methods. It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse."

— Karl Marx, Das Kapital: Kritik der politischen Ökonomie, 1867
 
Make sure the terms of the mortgage are favorable. Do your due diligence on the land use and zoning and insurance. While he may have been doing this for a while that doesn't mean it's allowable or legal. Nothing could be worse than finding out after the fact and having to relocate your equipment or the operations. Can you run your business on it, what about storage? Is open storage permissible? Do a comparable market analysis of real estate in the area. Satisfy yourself that it is indeed a good price and that if you were to shop the mortgage around you'd get comparable terms. Do an inspection. Make sure there's nothing toxic that's been dumped there or any other hidden deficiencies that may cause you to be refused insurance or that you'd have to remedy after the fact.

Oh and be sure to have a lawyer do the title search and give you a clear title. You don't want to find out that there's a cloud on title and that you can't close until it's been resolved. Have it surveyed to establish the actual size of the lot and the precise boundaries. I've seen several deals get bogged down and end up costing $1000s extra to rectify boundary disputes.
 
I have a little experience with Woodmizers, if it's non-hydraulic without wheels, it's most likely a LT15. Starting price new, $7000 with a 19 hp gas motor. Possibility it's a LT10, but in my experience they don't sell well, kind of underpowered at 10hp. There's also a chance it could be a LT15 wide, around $9500 starting, which gives a diameter capacity of just slightly over 36", versus the standard, uh, 28" iirc.

Blades will run you about $300 a dozen, add $50 a dozen for stellite or carbide tipping. Adding power feed would run around $1100. If you're really thinking about doing a log home, look into the lathe attachment for the woodmizer sawmills. Thought about one myself, for decorative post production, but I have too many irons in the fire as it is.

How old is the mill? If it's fairly new and either of the LT15's, it's pretty close to spot on price-wise.

Might be a little high on the truck, depends on condition. If it's like every other old international I've seen, with some rust, 3 or more paint colors, etc, I'd probably value it at around $12,500 as long as the mechanicals were in good condition.

Value on the fork really depends on capacity and style of lift, as well as tires. To give you an example, my local implement dealer has three 5,000 lb capacity forks right now, one's useless outside of a warehouse because of it's tires(hard rubber over metal, they'd get hung up on a piece of gravel). The second one is a mast truck, used to be at a boat storage place where they had 3 or 4 stories of boat racking, you don't need 30' of lift height on a fork that's biggest lift is loading and unloading trailers. The third fork is kind of what I'm assuming you have an option for, pneumatic tires and around a 12' mast.


All told, it sounds like a pretty good deal, especially if you can get it closer to your mentioned 150, rather than the 161.
 
Milling the lumber is going to be a good part of the house building equation. Can you mill a bathtub, wood stove/ furnace, wiring, nails, tyvek.

All of that will add up. Just keep that in mind.

Is the cabin something that can be added onto, in the shorter term for more space?
 
Thanks every one. I stopped by solo today after work. Shit this seems to be such a good deal, I keep looking for problems. I can fairly easily add on to the cabin, thinking of a sun room off the front, and I could add about 200sf off the side fairly easy (I think, as I don't know too much about pounding nails)

The truck looks super clean for it's age. I crawled all around it, and under. Frame is clear of rust, and there is only very slight surface rust on areas which you would expect such as the hood hinges. I didn't measure, but it looks like a 10' flatbed. The k-boom is a National N65 with a 33' reach (using the pullout), max lift is 1,500 horizontal.

The forklift is a Clark. Older for sure, pneumatic tires, with dualies on front.

Saw mill is a LT15G15 non powerfeed. Looks to be in excellent shape, paint is hardly worn on the deck.IMG_0195.webp IMG_0196.webp IMG_0199.webp IMG_0200.webp
 
So below are pictures of the forklift. The building next to the forklift is a trash compactor, much like a shipping container building. The back side has a larger window.
The carriage of the mill lives in the shed, and the mill is on the slab next to the cabin. I would certainly relocate the mill to another area. I could enclose the covered area (on a slab) and perhaps build some straw bale walls for the kids room.IMG_0206.webp IMG_0207.webp IMG_0221.webp
 
I forgot to mention that. I called a real-estate agent friend of mine, and the land checks out. Septic is indeed good. The first thing she said when she looked it up with the county is "Awwww it's soo cute!" I forgot to mention, that across the street is a network of trails throughout 600 acres of 2nd growth (some third). This land belongs to the DNR, but is under county parks and rec management.. They were going to log it, the locals freaked out and protested. So the state transferred it to the county. This is pretty much the largest continuous tract of undeveloped land on our island. Unfortunately the 25' acres next door were just clear cut. I did find one survey corner on that side.

Doing my homework on it for sure.

What do ya'll think about the truck now that the photos are posted?

@SumoClimber
 
I think the truck looks good. Sometimes when we really want something we tend to dismiss all the bad things and only focus on the good points to help support our argument as to WHY we should go a certain way. I tend to do this.(Actually a lot) Basically I make my mind up first, then do the research to support my decision even if its the wrong one.
What are a few of the negatives you can think of. If there is something that is un-settling in this for you, what is it?
 
@ROYCE
Thank you for the support. I certainly like the weekly breakdown of the added cost (for payments at least). I am looking at the cons, and there is actually a list of them but none that are deal breakers. I made two itemized lists one with his numbers, and one with mine. I priced the land higher, and the equipment lower. My numbers wound up being higher.

The cabin/land would need some work. There is a 16x16 off to the side of the cabin, built to be a detached bedroom. This is unfinished, needing a floor, insulation, drywall and finishing touches. There is a largish slash pile, and the house drop goes to a temp pole. However there is a power pole installed waiting to be hooked up.

He said that he has the truck tagged at 26,000, but I need to make sure that this is actually what the GVW is as I am not looking for a CDL truck for my pruning gig.

I am pulling in a favor from a real estate agent friend of ours (actually an old landlord). She keeps saying "aww so cute!" and thinks its a great deal. Not a screaming deal where we could flip it and make 50K, but a really good deal.

I'm calling the guy in the next day or two, to get this locked in for the land, and maybe haggle a little on the equipment. The saw mill is on sale right now for 7,000, for the same model with a bigger engine. He is wanting $7,500 for his (which include extras like blades, peaveys, ect.)

The only thing that's unsettling with me is the equipment. I do need a bigger work truck, and this is a huge step up. Much bigger than I was wanting. The mill sounds nice, but I do not have the time and energy to set it up as a second business. Perhaps a hobby, a tool for making boards for the additions, and future house. I would love to make some cool slabs for furniture, as well as other items, but I cannot see it being profitable unless one were to do it fullish time. There is also the fact that I have very little that I can fall back on, and don't know many people who I can seek advise from (other than you guys).
 
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