Have chance to buy 1/3 of pawn shop

[helicopter23]

Buddy and his friend (who I can both trust) opened a pawn shop in a small town of 8k people want me to buy into a store where they buy and sell mostly anything of value. Also his partner fixes xbox, ps3's, cell phones, computers, etc.. They opened about 6 weeks ago and started with 7k in assets (mostly video games, ipad's, movies, etc...) They now have about have 20k in assets due to buying. Heres major points of business below
-I can buy in for 1/3 of business for $8,000.
-My job would be at the store probally 50 hours a week. I would be mostly listing stuff on ebay.
-They have not yet advertised in any paper.
- Store is very nice use to be realestate office. Total over head (From rent to utilites is $1k a month)
- My friend said my 8k would pay of 100% of company debt, he said it's important, please explain why its important???

I will post more business points.... Please comment

[minet123]

Is the town of 8k have a Drug problem i.e. Crank,or Qxys
or is it less than 20 miles from a major metropolitan city
than jump and don't look back

[topgame85]

Pawn shops are one of the best biz to be in period. Makes an average man a "banker" of sorts. The only concern I see here is the small pool of clients but it also awards you low overhead. I say go for it we are gamblers arent we?

[helicopter23]

The county has 45k people and this town is in the middle of the county. Town is 30 miles away from city. Closet "pawn shop is 22 miles away and my buddy ran this pawn shop for 9 months. This town is also county capital.
There is a video game store 50 yards away. They only buy and sell video games mostly. He is about to go out of business because of my friends shop.

My buddys shop fixed electronics (xbox, ps3,) and buy anything of value.

[topgame85]

For the low investment and high potential why not? Many hustlers from major cities will come farther outside the city to dump product. Just follow the law as far as reporting and low ball people and you could be living the good life in a few years. Make sure to direct your marketing budget to the major city NOT locals. Small town people will know you are there your target audience is people who can't dump their stuff near the area they "find' it.

[helicopter23]

Can't believe no one is really commenting.

[topgame85]

Late for the Monday night crowd I suppose

[tanner40]

Common pal you really want advice from degenerate gamblers? 90% on here will say go for it and and the other 10% will act super smart and tell you why out won't work, despite the fact they have no real world experience themselves.

Me? I say go for it

[tanner40]

Also, for 50 hours/week, what is your compensation?

[helicopter23]

I book bets from 3-4 friends too. 2 people's avg. bets are 110/100 and and the other guys is prob 275/250. I made probally 8-10k last year... Could this be a problem too???????????????? Mixing a legal business (pawn shop) with illegal booking??

[birdmanweezy]

unless your in the ghetto it will fail

[mw00]

like someone asked, how will you be compensated working 50hrs/week? are you friends gonna put in the same hours too? are these the same guys you are booking the bets? if they are, then that gets to be a very iffy...all in all if you trust these guys, 8gs really isnt that much to stress over. i mean sounds like one of them already has a little experience in the biz so i would say go for it.

[helicopter23]

Also, for 50 hours/week, what is your compensation?

This shop is been opened 6 weeks and they have not "payed themselves" yet. For 50 hours a week I hope to get $500 a week. I have no job skills although was an excellent worker at two jobs working in manufacturing (didn't get hired full time because it was through temp agencies). Also no jobs in this area.

My buddy is gonna take most of the 8k and make business debt free. He says this is a huge deal to be debt free and have 20k in assets. This kid that fixes electronics has a small ebay company where he nets about $20 a day, not doing it in last week couple weeks because he has no time.

[topgame85]

I book bets from 3-4 friends too. 2 people's avg. bets are 110/100 and and the other guys is prob 275/250. I made probally 8-10k last year... Could this be a problem too???????????????? Mixing a legal business (pawn shop) with illegal booking??

Most states require pawnbrokers to have a license and pass background checks. Not sure if you have a record but if you do it could be a problem. If not if you do ever get pinched for the gambling it may become a problem. Just be smart and possibly talk to a lawyer beforehand. Obviously never mix the funds or biz together.

[helicopter23]

I currently have about 15k in cash, Owe about 8k in CC debt. Total monthly bills are $500 ( I stay at my grandparents and help them, they have Money.)

[tatommack]

might have been a good idea 2 years ago i bet they made a shit ton

[helicopter23]

Most states require pawnbrokers to have a license and pass background checks. Not sure if you have a record but if you do it could be a problem. If not if you do ever get pinched for the gambling it may become a problem. Just be smart and possibly talk to a lawyer beforehand. Obviously never mix the funds or biz together.

Pawn shop is 100% legal. Another problem is my friend has a couple enemies in this small town due to town politics. However he also has people on his side too.

[helicopter23]

He currently pays about 40% of current ebay value. Meaning buys an item for $20 and sells it for $45 on ebay. He gives about 75% of metal prices. Gold silver, etc...

[topgame85]

I will put it this way, if it was me I would do it no question. Pawn shops have monumental potential upside. As previously stated the key is to pull in people from the city to do biz with you. Pawn shops are also a big "loyalty" biz. Take care of the people who clearly will be good long term customers whether they are the ones selling or buying and just low ball the people who are clearly trying to get over on you with the one time score. That biz is more about reading people than anything else.

[topgame85]

He currently pays about 40% of current ebay value. Meaning buys an item for $20 and sells it for $45 on ebay. He gives about 75% of metal prices. Gold silver, etc...

WAY too high. If he just wants to build a customer base to start out could be a good move but eventually should never be giving more than 33% unless it is a big dollar item he can flip quick. Most in my area give 20-25% of value.

[Extra Innings]

Pawn shop is 100% legal. Another problem is my friend has a couple enemies in this small town due to town politics. However he also has people on his side too.

Go for it. Just make people think you work there due to the bookmaking. Invest in an external security system (cameras) for the outside since you alluded to having enemies...make sure the video feed is transmitted to a remote location. Do not get cameras if you guys are going to burn down the place for insurance proceeds.

[xkgb]

you re not going to make much money selling FROM THE STORE, since it is, as you said a low income drug infested area, but yoy stantto make great profit if you sell stauff on EBAY, as you said...Just be careful, what you buy...Stick to gold, jewelery, muzikal instruments, higher end electronics, PC, cameras, phones, and expensive tools...DO NOT BUY ANYTHING ELSE!!!!, Or you'll have hard time selling he stuff back...You also have to become a scrupulous owner, paying 10-15% of the resale value of stuff, since you going to be waiting on average 2+months to get the turnaround on your money...

Another thing....$8,000 should buy you a majority stake in this business, since you probably not going to see the return on the merch(you said $20,000?) Movies, and little stuff is a hassle to try and get rid...I would not count that crap as anything towards a value of the business...You also have to account rent, bills, taxes, shipping, salaries, and cash for purchasing power,,,I would bring in a lawyer and demand 60% of the profits if u invest your $8,000, JMO, BOL

[dherd]

pawn shops are good businesses to get into, not sure about the small town part of the deal though.

[InTheDrink]

ebay isn't what it used to be....they're like the govt of ebay-land....if you can make money off of it then they'll find a way to tax you for it.

[helicopter23]

Probally already selling $40 a day on dvd's. My buddy owns 6,000 vsh tapes, about 2,000 dvds. He buys dvd's at $! a piece and sells for $2. He had piles of that shit laying around that need to be put on ebay. Also both there wife and girlfriend help out for free ( test and resurface games)

[helicopter23]

Yeah hes giving the 40-50 % now to build a customer base it will be more like 33% soon

[helicopter23]

THey also just went to local market on sunday where there are about 75 vendors and sold $600 worth of merchandise. They have no customer base there and it was there 1st time ever there.

[Ra77er]

Yea I agree with Xkgb and also Extra Innings. You really should have a lawyer look over anything to do with the business before you throw down 8k on it. It could turn out to be a profitable investment but even if they are your friends just make sure you have everything on lock before you invest in it. Extra Innings idea of burning the joint down if shit goes south is pretty solid advice as well imo.

[keenecharger21]

Buy into you guys are going to be greater the. Pawn stars

[helicopter23]

If i give my friend the 8k and buy into the company will have zero debt, why is this a big deal?????

[topgame85]

The biz not having debt is always good but not necessary. Did they need to take a high interst loan to get started? Maybe they just are sick of paying interest or this is their way of trying to get you to join in. In all honesty though a biz that has more in true assets than debt really does not carry any debt. Most investors would be willing to get involved in an operation with a 2.5:1 asset to debt ratio. The only real question is are the assets REALLY worth 20k.

[InTheDrink]

Yeah first question is where is the debt coming from.

This whole thing sounds like a cluster fuk of epic proportions. Kid knows little about the finances of the business aside from what his "buddy" told him and he's ready to dump 8k in. Not to mention the seedy nature of pawn shops to begin with....-200 he gets fukked in this deal.

[Inkwell77]

Are there any other pawn shops in town??

8,000 people is a relatively small market, but there may be a demand.

The jewelry and instruments are key!

[secretstash]

u have 15K and arent an sbr pro?? wtf man support the forum.. now ur here asking questions and getting all these ideas and help and u cant pay sbr back a little for their time?

man up brah

-stash


_____________________

to answer ur question I think its a good idea to invest in.. BUT they came up with this 8k figure to exactly pay off debts? its kinda bullshit figure and then to only give u 1/3 of the biz? in reality their 20K in electronics and bs there is worth 10K tops what they paid for it.. they hope to get 20K from the sales.. so basically ur buying their entire inventory and they are becoming debt free.. doesnt seem like a fair trade to me.. imo u should ask for more of the business or get a solid commitment of a weekly salary. also, does it seem fair to u that the wives and the guys may not draw a salary yet?.. probably not.. so in a short while they WILL be drawing a salaray.. which means more overhead.. 1000 is just the rent and the lights bud.. in reality u gotta count 6 people at 500$ a week as well which turns out to be 12-15K a month overhead.. GL lol

-stash

[Nittany Lion]

Selling stuff on eBay can net you some good $$$$, I watch for stuff on slickdeals.net and have found some awesome resale deals. Like last month I bought 18 brand new in box Garmin Nuvi 3790T's that Best Buy was selling for clearance at $140. They sell new for $300+.