Terri,
Thank you for sharing Hidden Hill's financials and giving us time to think through what works. You've built something real here, and we want to put together an offer that's fair to both sides.
I want to be direct about where we're coming in and why.
Your 2025 P&L shows roughly $277K in net operating income - strong numbers. But the $43K for management of the venue is below what we would need to have a trusted manager that can fully operate the venue as an owner.
When we normalize for what it would cost to actually staff the venue without owner involvement, the NOI comes down to the $190K - $230K range. That's not a criticism - it's just the math we need to account for.
| Your reported NOI | $277,000 |
| Less: market-rate labor adjustment | ($50,000 - $85,000) |
| Normalized NOI | $190,000 - $230,000 |
At a 5.5-6x multiple on normalized NOI (standard for event venues in secondary markets), we get to a fair market range of roughly $1.9M - $2.3M. Your strong forward bookings and the property's quality push us toward the higher end of that range.
With that context, here are two structures we'd like you to consider:
Clean break, full liquidity at close. No ongoing involvement required.
| Payment | Amount | Timing |
|---|---|---|
| Cash at Closing | $2,000,000 | Day 1 |
| Annual Interest Payments (4%) | $16,000/year | Years 1-5 |
| Seller Note Principal (balloon) | $400,000 | Year 5 |
| Total Consideration | $2,480,000 |
Gets you to $2.48M with a 5-year tail. You receive $16K/year in interest payments, plus the $400K balloon at Year 5. The note is secured by the property. May offer tax advantages through installment sale treatment.
| Option | At Close | Year 5 Total |
|---|---|---|
| A: Traditional | $2,200,000 | $2,200,000 |
| B: Seller Note | $2,000,000 | $2,480,000 |
If you are amicable to these terms, or when we are amicable to the terms above, we would begin to secure financing and perform our due diligence on the building, property, and management.
We are flexible on structure. If one of these is close but not quite right, let's talk through it.
Best,
Jeff and Doug
This Letter of Intent is non-binding and subject to satisfactory due diligence and execution of a definitive Purchase Agreement.