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Unregistered 05:20 PM 09-29-2014
I've come across a unique opportunity and need some opinions.

A woman in the town I live in needs to sell her daycare for personal reasons. She's been in business since 2005, operates her daycare out of one side of a duplex, and currently serves 8 families but is licensed for up to 12 children.

The duplex is completely set up for daycare - child size toilets, furniture, a huge, fenced in backyard, tons of toys and books organized by theme, and I've talked to some of the families that go there and they are in love with the place.

She wants to sell it for around $40,000. She would still own the duplex.

Is this a good deal? I know it's hard to say because prices would vary depending on different areas of the country, etc. I'm in the midwest. I'm extremely interested but have no idea if this is a fair price.
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Sugar Magnolia 06:56 PM 09-29-2014
No, it does not seem like a good deal. I would rather see you start your own home daycare. It is a home daycare, right? Waaaaay too many variables! What if the duplex goes into foreclosure? What if she sells the duplex? Would you have a lease on the space? How much would the lease be? The current clients may not stay, they certainly don't have to. What exactly do you get for $40k? I'm guessing you'd only get the equipment, furnishings and supplies (cots, tables, chairs, shelving, toys, outdoor climbers, etc) and the existing clients. And a lease on the space.You don't get the improvements, like the fenced yard, the child sized toilets because they are part of the real estate that you WON'T own.

With $40k, you could buy a LOT more than some used equipment and 8 clients.
With.$40k, you could put a down payment on some real estate and start your own business, and have it be YOUR creation, not the remnants of someone else's dream.....

I hope that helps. Dream big, but be careful buying an existing business. "Buyer beware" and "location, location, location" is the best advice I ever got. Best wishes.
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Unregistered 07:06 PM 09-29-2014
Originally Posted by Sugar Magnolia:
No, it does not seem like a good deal. I would rather see you start your own home daycare. It is a home daycare, right? Waaaaay too many variables! What if the duplex goes into foreclosure? What if she sells the duplex? Would you have a lease on the space? How much would the lease be? The current clients may not stay, they certainly don't have to. What exactly do you get for $40k? I'm guessing you'd only get the equipment, furnishings and supplies (cots, tables, chairs, shelving, toys, outdoor climbers, etc) and the existing clients. And a lease on the space.You don't get the improvements, like the fenced yard, the child sized toilets because they are part of the real estate that you WON'T own.

With $40k, you could buy a LOT more than some used equipment and 8 clients.
With.$40k, you could put a down payment on some real estate and start your own business, and have it be YOUR creation, not the remnants of someone else's dream.....

I hope that helps. Dream big, but be careful buying an existing business. "Buyer beware" and "location, location, location" is the best advice I ever got. Best wishes.
Thanks so much; I needed to hear that!

It is a home daycare. The entire space is dedicated to the daycare so know one lives there.

When you phrase it like that (the yard, toilets, etc wouldn't be mine) it makes it sound like a not great deal. I also agree about too many variables. I've been going over different scenarios in my head and too many things could go wrong.

Thanks again for a voice of reason!
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Sugar Magnolia 08:09 PM 09-29-2014
Originally Posted by Unregistered:
Thanks so much; I needed to hear that!

It is a home daycare. The entire space is dedicated to the daycare so know one lives there.

When you phrase it like that (the yard, toilets, etc wouldn't be mine) it makes it sound like a not great deal. I also agree about too many variables. I've been going over different scenarios in my head and too many things could go wrong.

Thanks again for a voice of reason!
You're welcome! If you're serious about home daycare, you came to the right place. There are many veteran home providers here who would be glad to help you plan and start your own.


I started a small center, real estate purchase and rezone and other fun stuff included, a tad more complex, but it can be done.
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Sugar Magnolia 08:18 PM 09-29-2014
Actually, if the duplex itself was for sale...now THAT has potential. Live in one side, work in the other. I'm liking this. Does she own both sides? Hmmmmm.
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nannyde 05:25 AM 09-30-2014
No way. She may have a great set up with equipment but that equipment is worth about ten to twenty percent of what she paid for it at resale. Her clients can leave so they can't be considered in the transaction.

So what you have is... forty K for her used equipment.

You could replace everything brand new for that amount of money. easy...
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Blackcat31 06:26 AM 09-30-2014
Originally Posted by Unregistered:
I've come across a unique opportunity and need some opinions.

A woman in the town I live in needs to sell her daycare for personal reasons. She's been in business since 2005, operates her daycare out of one side of a duplex, and currently serves 8 families but is licensed for up to 12 children.

The duplex is completely set up for daycare - child size toilets, furniture, a huge, fenced in backyard, tons of toys and books organized by theme, and I've talked to some of the families that go there and they are in love with the place.

She wants to sell it for around $40,000. She would still own the duplex.

Is this a good deal? I know it's hard to say because prices would vary depending on different areas of the country, etc. I'm in the midwest. I'm extremely interested but have no idea if this is a fair price.
So what would you be buying for $40,000?

Families and children that attend? There is no guarantee they will stay with you so I don't really think you can sell that type of thing.

Also if you are in MN there would be issues with licensing. SHE may be licensed for 12 kids but as a new provider you would not be. You would be licensed for a smaller amount (10) for a year and then you have to apply to have a larger license o right off, you would have to lose two kids. Doesn't matter how many other adults are present. Newly licensed providers can't have more than the minimum license capacity.

Also as a landlord-tenant situation there is way too many variables that could happen that could wipe your business out with one bad disagreement between the two of you.

If you are interested in buying a daycare, I would just buy one but I certainly wouldn't spend that much money on someone else's clients.

Not concrete enough to see any value in it....
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Tags:buying a daycare, starting a child care
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