First Investment of 2019
Today was pretty cool. I was hesitant to blog about this deal because I didn’t know if I could disclose numbers. But I talked to Mike, the lead syndicator on the project that I like to blog and he mentioned that I could write about whatever I want. LOL! I was like, dope!!!
Scottie has been coming to this investment club since 2017 with Nick, his BFF (Business Friend Forever). Nick invested in 3 deals prior and we talked about his experience and his ROI. At the time, Scottie and I didn’t have enough to initially invest. The minimum is $25k and you can get 9% to 27% back. Seeing that Nick was getting a monthly check, we knew we had to try.
I started going to the meetings in Dec 2018 and thoroughly enjoy learning and growing in this field. We have all walks of life in this club and seeing that Scottie and I are one of the youngest, it felt like we were in the right room because you can learn a lot from people who are seasoned in this field.
So Scottie and I sold our first townhome in January 2019 and wanted to use the profits we made to invest. The timing could not have been more perfect because the January meeting with the investment club offered its members another Fitness Acquisition and it is going to involve 3 Crunch Fitness Gyms in San Diego County. Two of the gyms are cash flowing and the other one is on brink of being positive cash flow.
We felt it was right even though one of them isn’t cash flowing because we wanted to take a leap of faith and know that the changes being made with the new owners will impact of the gyms. Also, after reading up on Crunch Fitness and what they believe in I knew it was a win-win situation. We got to meet John one of the main guys at Crunch to let us now his back story and his why behind the gyms. We also learned that it normally takes over 2 million dollars to start a gym after it cash flows.
After Scottie and I went to the meeting we prayed about it and said let’s try it. It’s a risk we are willing to take and we’ve always talked about getting into passive income streams and building our portfolio. The investment club was in the home stretch to closing the deal but we didn’t know how much they would acquire them for. They didn’t disclose the numbers at this meeting.
After Scottie building a relationship with the lead syndicator and the investment club we knew this deal felt right. This would be our first passive income investment so we wanted to try and do the minimum first. We got interviewed first. Since we are not accredited investors, the club will always interview potential investors to make sure they are the right fit. They don’t just let anyone invest.
An accredited investor is someone who owns a million dollars in assets and makes $200k annually within the past two years or if you are married a combined $300k a year. Ha-ha! Scottie and I are nowhere near that so we didn’t know if we would pass the interview. But building a relationship with the club we are considered sophisticated investors. We were considered to be part of the deal and we were so excited! We did the minimum investment of $25k and wanted to see where this would take us.
A few weeks past and we had another meeting. We found out the club acquired the three gyms for 1.2 million dollars. Which is astounding knowing that it takes 2 million to start a gym for it to be cash flowing. So we were super excited because this is 3 gyms that the club was able to acquire at such a great deal. We are looking forward to seeing where this investment takes us.
In April of this year, we should start seeing an ROI starting at 9% but it can go up to 27%. We will keep an update as the year goes. Also, we are looking forward to going to San Diego to visit the gyms in June. A nice little business getaway and if you know me I always itch for vacations. Lol!