Mike Andes reviews a $4.8M winery and events center with $2.3M in stated revenue and $300k annual profit. The 10% profit margin is thin, and the advertised 7% cap rate matches what you'd get from simpler assets like multifamily properties with far less operational complexity.
$4.8 million
$2.3 million
Approximately $300,000 per year
7%
This winery and event center is for sale for $4.8 million, has a revenue of $2.3 million and profits around $300,000 per year. I'm a little bit nervous because it's less than 10% profit and there's just not much meat on the bone. And honestly, this is more of a real estate play. And that's why they mentioned something called cap rate. And they say they have a 7% cap rate. But honestly, if you're looking for a 7% cap rate, you can get this in multifamily or rental housing or commercial real estate, where you never have to have employees or have inventory and run a business. So 7% cap business is really not that great.
