We have come across a 6-year established office in a shopping strip whose GD and Endodontist are relocating to a professional medical building by the end of this year. They want to sell the current location for $650,000. For the price, all we are getting is the location and the equipment/fixtures. They are taking the patients with them.
They have 3 years remaining on their current lease. The total rent is nearly $3200. The approximate square footage is 2000. It has 5 operatories with ADEC chairs, digital x-ray, digital panoramas, 9 computers, new compressors, nitrous oxide tanks and plumbing (no idea of exactly how old). Number of patients and production information was not offered. The office’s location is very good. It is nearby a major grocery chain. There are between 5-10 other dentist offices within a 2-mile radius.
Essentially, what my wife and I asking ourselves (and hope to get advice for) is: IS THE $650,000 WORTH IT FOR JUST THE EQUIPMENT AND LOCATION? (The price includes the GD’s costs for renovating the office) OR should we just look for an empty location and start – literally – from scratch?
Since my wife is sill working for a group practice, this is our first experience. Can you advise us of how to proceed or how to negotiate with the GD seller?
$650k is the ASKING price, I doubt it’ll be the AGREED UPON price.
You MIGHT be able to duplicate that office for approx. half of that, maybe not depending on the build-out cost.
The fact that you’re considering this leads me to believe you’d consider a scratch start-up & if that’s the case, the question is, how much are you willing to spend on a scratch start-up that comes with NO patients? THAT number may be the number that your willing to offer at MOST, probably less since you’re buying USED equipmentimprovements.
Don’t be insulted by the asking price, it is what it is, nothing more. Make an offer & plan on sticking very close to it. The WORST that can happen is they say no & you’re in the exact SAME position you are now, nothing lost.
This post first appeared on DentalTown.