Would this be a good investment move?

Which investment will be the better move?

• I asked in the tax forum because I know that CPA's populate it. I'm looking at purchasing an existing business. I have two options. Option 1 is priced so low that I can EASILY pay in full (or leverage with 20% down) but then after taxes, I'll be seeing low 5 figures. My main concern with this business, is that if it's doing these low numbers, it can go out of business at any time. Option 2 is doing about double the revenue, income, etc, and I would borrow about 70% of the purchase price. However, after repayment, taxes, I'll see even less money after tax than I would with option 1. The upside is, once the loan is repaid (5 years or less) I would be making close to 6 figures. Thoughts? And yes, I work with a CPA and Attorney, but their job is to run the numbers. I want outside input on which sounds like the better move.

• Answer:

  in today's business climate any venture into one is risky business you need to exercise good judgement to determine which is going to be a better investment and any business you decide to buy should be something you are familiar with, that you are not going to have a problem operating and no rely on other people to make it profitable the low price of the one, which would not result in your being in debt sounds like a good deal on the surface but if is not doing well now, the only way it is going to be better is your expertise in improving its profitability and yes, the other one will have you in debt for a few years, but if you manage it well and continue its profitable ways eventually you will reap greater rewards however, consider either one could 'tank' and you would be out your original investment on the cheaper one and be obligated to pay the note on the other you might talk with other people in the businesses you are considering and see how they feel about the possibilities in addition to doing some market study in your area how vital this business is to the area