Over $700K in cash flow sounds great. The problem is what you have to invest, and how much work comes with it.
At first glance, this looks like a serious business.
Two locations. Real estate included. More than $4.2M in revenue. Over $720K in claimed cash flow.
Those are the kinds of numbers that get buyers excited.
But once you look deeper, I think there are better places to put half a million dollars.
Deal Snapshot
Now let's run the deal through a standard SBA financing scenario.
SBA Scenario (10% Down)
After debt service, the buyer is left with roughly $261K per year. That is a decent chunk of money, but it comes with a nearly $470K down payment and a very hands-on operation.
What Stands Out
- Real estate included: Both locations are part of the transaction, which helps support the valuation.
- Strong cash flow: More than $720K in SDE provides meaningful earnings even after debt service.
- Very low industry default rate: Gas stations historically perform well from a lender perspective.
- Two established locations: Existing customer traffic and operating history reduce startup risk.
- Expansion opportunities: The seller outlines additional profit centers such as food service, automotive services, and retail development.
Potential Risks
- Expensive valuation: The 6.31x cash flow multiple is well above industry averages.
- Not absentee-friendly: The listing specifically states the buyer must actively manage the business.
- Large capital commitment: Nearly $470K down is a meaningful amount of money for a hands-on operation.
- Operational complexity: Two locations and 11 employees create additional management demands.
- Seller-assisted down payment: The seller is offering financing assistance, which raises questions worth exploring during diligence.
- Growth is mostly theoretical: Many of the expansion opportunities have not yet been proven.
BizHub Verdict
BizHub scores this deal a 7.3 / 10.
There is a lot to like here. The real estate is included, the business produces meaningful cash flow, and gas stations tend to be relatively stable businesses.
My issue is not the business.
My issue is the tradeoff.
If I am putting nearly half a million dollars down, I generally want either a much better return or a much more passive operation.
This deal gives you neither.
The cash flow is solid, but buyers with this kind of capital can often find opportunities that require far less day-to-day involvement.
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