nertsmommy Posted October 4, 2012 Share Posted October 4, 2012 I posted about this here: http://forums.welltrainedmind.com/showthread.php?t=428088 The daycare center is attached to a 4 bedroom house by a 2 stall garage. There is a large fenced in play area. All supplies go with the center. There is also an apartment underneath the daycare. I am still looking at this. If the seller would do a seller assist and subtract the down payment from the cost I was wondering how much I'd actually have to have in cash to carry us a few months. I'm too involved in this to think rationally so I thought I'd ask for help here. The total cost would be $140,000, if the seller would subtract the down payment. Our credit isn't bad, but it's not stellar like it was a few years ago. If we were able to get a loan for this, it would involve us having to move and DH would have to get a new job. We'd have to cover our bills until he got a job and I got the center up and running again. There are plenty of jobs available were the center is located. They aren't the best paying, but he would at least be working fairly quickly. I could probably borrow some money from my dad to keep us going for at least 3 months. Could be more depending on the costs. I have looked into the center and know that it was making money up until they decided to close it. They are closing due to family situations that make it too time consuming for her. Tell me I'm crazy to think that the bank would give us a loan for this. I need to get over this idea. It's just hard because I have wanted this for so long. I went to college with this in mind. And the best thing is I could move back near my friends again. Give me a reality check, gently but firmly. :001_smile: Quote Link to comment Share on other sites More sharing options...
bettyandbob Posted October 4, 2012 Share Posted October 4, 2012 What are the licensing hoops you need to get through to open the daycare center again. What certifications do you and staff need (you may need to pay for staff to be certified in CPR etc). Have you priced the daily expenses of running a daycare. Would you be applying for Federal money for lunches. Do you know that the building is up to current code for such a facility. The previous owner may have been operating the business under an earlier code standard. This sounds like a good idea, but it unless you have a business plan really worked out, it would be better to take it on as a second income. In other not be in a position that the daycare must be up an running for the family to function financially. Quote Link to comment Share on other sites More sharing options...
beaners Posted October 4, 2012 Share Posted October 4, 2012 Reality check: I don't know about last year, but within the last few years PA was really, really late with their budget. As a result, payments stopped going out to childcare providers for several months. A lot of places had to close because they couldn't cover the shortfall until the state started sending checks again. If you're planning on having clients who are paid for by the state, there's a good chance you will need to have a large monetary buffer for this sort of event. The money shows up eventually when they do these freezes, but you have to be able to cover costs without any income until that happens. Does that sound like something you would be able to do? Quote Link to comment Share on other sites More sharing options...
nertsmommy Posted October 4, 2012 Author Share Posted October 4, 2012 Reality check: I don't know about last year, but within the last few years PA was really, really late with their budget. As a result, payments stopped going out to childcare providers for several months. A lot of places had to close because they couldn't cover the shortfall until the state started sending checks again. If you're planning on having clients who are paid for by the state, there's a good chance you will need to have a large monetary buffer for this sort of event. The money shows up eventually when they do these freezes, but you have to be able to cover costs without any income until that happens. Does that sound like something you would be able to do? Thank you. I needed that. Quote Link to comment Share on other sites More sharing options...
Avila Posted October 4, 2012 Share Posted October 4, 2012 Can you afford the house if you, for whatever reason, can't run the daycare center or have too few clients? What happens if you hate running it or have other issues that prevent you from being able to run it? How hard will it be to sell, if you need to? Quote Link to comment Share on other sites More sharing options...
QueenCat Posted October 4, 2012 Share Posted October 4, 2012 What do you mean by subtracting the down payment from the cost? The down payment is normally subtracted from the total price in determining the loan amount. Quote Link to comment Share on other sites More sharing options...
cjzimmer1 Posted October 4, 2012 Share Posted October 4, 2012 Another thing is to consider the loan. Banks are a lot tighter on lending money than in the past. Can you afford the payments on his current salary alone? They probably wouldn't be too willing to loan money if he just switched jobs, especially if he ends up in a different industry. I know for self-employment the documentation that must be provided is crazy. While obviously the loan is for a business, since it includes the house which also be personal, they may not be willing to consider potential income from the daycare as a means of repayment especially since you don't have an established client base. But if you really have your heart set on this, make an appointment with a loan officer and discuss it to see if it's even a possibility. Quote Link to comment Share on other sites More sharing options...
Catwoman Posted October 4, 2012 Share Posted October 4, 2012 Can you afford the house if you, for whatever reason, can't run the daycare center or have too few clients? What happens if you hate running it or have other issues that prevent you from being able to run it? How hard will it be to sell, if you need to? Yes. This. And also -- you said your dh would have to get a new job. That part is very worrisome to me, because you said that finances are tight. What happens if he can't find a job and people don't flock to your new daycare center? (If you're new to that area, you have no references and no contacts, so why would people choose your center over an already-established one that was run by a long-time local owner?) I'm not trying to be overly discouraging, but I think you need to seriously consider the downsides here. If the center was in your current area, where your dh already has a job, I would be far more in favor of it. Quote Link to comment Share on other sites More sharing options...
nertsmommy Posted October 4, 2012 Author Share Posted October 4, 2012 Thank you all for pointing out the negatives. I was stuck on the positives. Mainly because it's been my dream to have a daycare center and because I would be moving back home and closer to my long time friends. I've been feeling lonely lately with no one near that I can go see. I just want to go back home. My friends have been helping to feed into the good stuff because they want me back there as well. They mean well, but it really isn't doable right now. It is a crazy idea. Thank you for setting me straight. Quote Link to comment Share on other sites More sharing options...
Catwoman Posted October 4, 2012 Share Posted October 4, 2012 It's not a crazy idea forever; it's just sort of a crazy idea right now. I think your dh needs to have a solid job there before you consider making that kind of move. You need time to build a business, and without your dh having a steady, reliable income, you would be taking a huge risk. If this is something you really want to do, I think you need to be sure you have quite a bit of money set aside to support your family while you build up a business -- and in a new location, you need to be particularly careful, because even if your dh gets a job, he won't have any seniority, so you almost have to pretend he won't be working when you try to figure out how much money you'll need. I wish I could say that I thought you should throw caution to the wind and just go for it, but I honestly can't do that. I'm so sorry that you can't make your dream a reality yet, because I can tell that this particular home/daycare is something that felt absolutely perfect for you. I wish the timing had been better. :grouphug::grouphug::grouphug: Quote Link to comment Share on other sites More sharing options...
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