u/SEVEREchickling

Hi everyone! I’m in a frustrating situation and would love to hear any advice on what to do..

Context: I’m buying an existing medical practice. The seller and I are in agreement, the PSA is ready, the finance sorted, and everything else but the lease is good to go.

The property manager requested that a LOI was sent to her by end of July, which I had done. From there though, she’s been extremely uncooperative. Only difference was that my attorney advised that I ask about a TIA. Not sure if that’s what set her off, but she immediately started to nitpick on other parts of the lease assignment (which SHE drafted..)

She says that since the landlord lives in China and is extremely hard to get a hold of, she refuses to contact the landlord until a workable draft is signed by all parties and will not be asking about any TIA requests until then. Since she was essentially gatekeeping the landlord, we just dropped the TIA request to try and keep the process moving.

Essentially, we just signed the fresh lease assignment (that the manager drafted herself) and have been waiting to hear back. She keeps saying “the landlord is in China and hasn’t responded.”

Everything else with the sale has been good to go since August, but we’ve literally been waiting on the lease assignment for the past 2+ months….

My attorney said that there really wasn’t anything we could do. The seller does not have direct contact to the landlord. I cannot relocate the business at this time due to buildout costs.

Any advice? Thanks!

Hi everyone! I’ve recently been offered a chance to buy a small 20yo clinic (being a clinician myself). The clinic was previously valued around $360k a couple years back, but has not sold (I suspect because of the lack of nice-to-have equipment and paper charts rather than electronic). Based on the owner’s P+L, her net income is around $250k (including her doctor salary, husband salary, their shared health ins benefits, and the net profit).

Recently, I was given the opportunity to purchase the clinic for a “reasonable offer”. I pitched $60k, and was surprised they accepted. The sudden drop in price was because she had a stroke that resulted in hospitalization for 10+ days. Because of this, her husband is pushing her to retire. However, their lease is up this month and the landlord requested an LOI before end of July if they wanted to keep going. Thus, they need to either find someone willing to take over, or just shut down for good and deal with closing costs/maintaining paper charts for 10+ years after close. So essentially, willing to accept a low price bc something is better than nothing, legacy, and to avoid 10years of storage fees.

Seller is expected to stay on for 6+ mo during the transition period, and may continue to stay part time even after as “she is not yet ready to retire, but has to start prioritizing her health.” The landlord seems flexible on lease duration, but conservatively, it seems minimum might be 3 years.

Being in healthcare, my business background is limited so I was hoping for some guidance on a few questions I have:

1. Seller P+L shows a hefty profit, but their tax returns show a negative business income, with the discrepancy around $60k. I asked the seller, who requested I talk their broker. I have a call scheduled, but what are some common causes for such a big difference?

2. What are some tasks that should be completed before submitting the LOI vs afterwards during the due diligence period?

3. I know that it’s unlikely to have 100% patient retention rate, but I do have a lot of growth strategies in mind. Any way to calculate a tangible number?

4. Anything else to be on the lookout for?

TIA! I know this post was long, appreciate it!