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TOPIC: Buy My Theater --Owner Financing or Lease/Purchase

Buy My Theater --Owner Financing or Lease/Purchase 20 Nov 2009 00:01 #32840

  • lionheart
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Ok. If you are interested in owning a cinema, but don't have the cash to buy outright or simply don't want to buy outright, then maybe there are other options. I am offering the Gentry Cinema, a 2-screen theater in Checotah, Oklahoma for sale at $285,000. This would include business, equipment, land, and building.

However, time is growing short since I have accepted another job out of state, and I am forced to consider options other than selling outright. I do not like the prospect of owner financing, unless there is at least 50% down payment. There is too much potential for headache there to do it for less. If you had the cash, that would be a pretty sweet deal and would cost you less in the long run than the other options I'm about to present.

As for leasing, I have considered a possible lease/purchase option. I'm not sure I want to do it, so you would have to convince me that you are a good candidate. But, if you have good credit, and maybe you have experience, and are fully committed to making it work, I might be convinced.

I am concerned that someone who doesn't know what they are doing will come in here, then fail and tell the world how this theater won't work. Then I will be stuck, losing my life savings, and left owing money on something that nobody wants. The truth is that the place has good potential and has performed modestly so far. I have not hidden that fact. For the size of our population, we have only scratched the surface. With time and hard work, I know the Gentry will be a good source of income for someone who reaps the rewards.

If you were to purchase the business and equipment for $50,000, then I would be willing to lease the facility for $1500 per month with half being applied to future purchase. I would require a minimum of a 2 year lease, and you would be required to pay all utilities and maintain your equipment and the building systems (such as heat and air, plumbing, and electrical-- which are all brand new by the way). I will be responsible for major facilities repairs, such as roof repairs, etc. If you break the lease, then you will need to sell the business and equipment in place to another operator to take your place (with them signing a new lease with me-- no subletting) or surrender the equipment to me in good working order as penalty for breaking the lease. This may seem extreme, but it will ensure that you are fully committed. It's not much different than the way it is traditionally done.

I would also like to point out that there are income streams that I never tapped. I never sold on-screen advertising, or played rolling stock ads for payment. This could add up to $750 to $1000 per month if done right. I have a digital boardroom style projector you could use to show local ads, and there are national companies who would work with you on the rolling stock ads. Many customers seem to expect all the ads when they show up late and wonder why they are actually late for the show.

Also, if you could book your own films, you would save $240 to $300 per month over what I payed. I have a good booker that I would recommend (and that price is very reasonable for his services), but if you can do it yourself, the savings are there.

If you are willing to live a very simple life to get the place up and running, I have an idea to turn the old balcony, which is now a good sized playroom for our kids, into a small studio apartment. All it needs is a small bathroom with a shower, and maybe a hotplate (no cooktop in the concession) and it would work. Everything else is in the theater already... kitchen facilities, tables for dining, office space, etc. It should be possible to add the bathroom for minimal investment. I think I would take $5000 off the price of the equipment if you would pay for this conversion. The business would pay your utilities. You would have no separate rent to pay for living quarters. Of course, this wouldn't work if you have kids. Not enough space. It would be challenging enough if you are married. I think it could be done if people wanted it though. Years ago, this was called "living above the store" and it is realistic way to make a business more viable.

If you do everything I've suggested here, the lease would already be more than paid for without even even selling the first ticket each month.

If you are interested. E-mail me at Gentry.Cinema @ gmail.com.
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