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I received an offer to purchase my partner's widows interest in the three nursing home, Friendship, Gateway and Floyd, in Georgia. Below is the offer and my response.
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10:40 AM (4 hours ago)
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Andy & Len:
I hope everyone is
staying safe and healthy. Hopefully things are winding down and we will
be back to some semblance of normal soon.
I wanted to address
this to both of you to kind of speed things along. We approached you back
around Christmas about buying Mom and Nancy out of the nursing homes. We
understand that it takes time to get financing lined up and so forth, but it
has been over 5 months now. The lease for Friendship will be up for
renewal at the end of May and that needs to be extended if we can’t reach an
agreement.
We would rather see
you retain the ownership and operation of the homes. It would be better
for the staff, residents, and everyone involved if there was not someone
different changing things around. To that end; here is what we
propose: You (either separately or combined) will pay us 80% of the last
appraised values of the homes and the 17 acres attached to Friendship.
That will give you the homes and properties. The numbers for this are:
Friendship
Appraised = $3,300,000 80% = $2,640,000
Gateway
Appraised = $2,900,000 80% = $1,933,334
Chulio
Appraised = $4,600,000 80% =$3,066,666
17
Acres Appraised =
$177,320 80% = $141,856
_________
$7,781,856
These numbers are if
the current debt ($993,4546 on Chulio and $152,123 on Gateway) is assumed by
the purchaser. The simplest purchase is for Len to buy out the 2/3 of
A&M and Andy to purchase Friendship. As I stated earlier, this
purchase can be done however the two of you wish. However you want to
work it out is fine. The important thing here is that one, or both of you
can give us an answer on whether or not you find this offer feasible or if you
have no interest in it by May 5. That way we can still deal with the
lease extension if we need to. Let me know if you need any other numbers
to reach your decision and I will try to get them to you as soon as
possible.
Stay safe and just let
us know. Thanks.
Jimmy
Dear Jimmy,
Thanks for your email and the proposal from your Mom and
Nancy.
The only interest I have in the homes is as a source of
rental income.
We have almost completed the new building that will replace
Cedartown Cason Road facility.
The three nursing homes, Friendship, Gateway and Floyd
Chulio Hills need to be rebuilt in the order I listed. I have Cedartown Cason Road facility paid
for with no debt and the construction cost will be able to be paid by the lease
payments.
Taking on the debt necessary to pay your mother and Nancy
the price they are asking makes it unreasonable for an operator to pay enough
on a lease to cover a mortgage payment (purchase price + new construction).
I am copying Andy on this email. I think it is a fair that
he have an opportunity to purchase your Mon and Nancy’s interest in the nursing
homes.
I wish you and your family the best.
Len
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