Book Buying General Questions

[Chris92]

Hello everyone,

I am considering buying a smallish book in CO. I have no idea how this works so I figured I would post to the insurance world and get some insight. I have a few questions that I will outline below, the answers to which will most likely spawn follow on questions. Any help would be greatly appreciated.

1: Where do you search for BOB that are for sale in a specific area?
2: Once you do find one that is available, how do you know how much of an income that book brings in?
3: How do you know that the asking price is reasonable/how do people valuate their BOB when deciding to sell?
4: What are the different methods of financing/where can you find financing for purchasing a BOB?
5: Is it possible to buy just a partial book or is it always the full book?
6: Once you have purchased the book, how do the clients in the book get transferred to the new owner? Both in their own book as well as with the carriers involved?
7: If you purchase a book that has carriers that you are not contracted with, how would you go about the process of making sure that you get contracted so that commissions will still be earned?

Those are the current questions that I have involving purchasing of a book. But I guarantee that more will spawn from answers.

Thanks in advance.

 

[fed up]

Start here: Colorado Insurance Agencies For Sale - BizBuySell.com OR here: Colorado Insurance Agents Businesses for Sale | Buy Colorado Insurance Agents Businesses at BizQuest
Asking price has a lot to do with the size of the book and the size of your wallet. Value is based on what the agent feels he needs to get out of the business but is somewhere in the 2 - 2 1/2 X the book and the deal you make. All of your posts make me want to ask: Are you sure you are ready for this line of work?

 

[Chris92]

Start here: Colorado Insurance Agencies For Sale - BizBuySell.com OR here: Colorado Insurance Agents Businesses for Sale | Buy Colorado Insurance Agents Businesses at BizQuest
Asking price has a lot to do with the size of the book and the size of your wallet. Value is based on what the agent feels he needs to get out of the business but is somewhere in the 2 - 2 1/2 X the book and the deal you make. All of your posts make me want to ask: Are you sure you are ready for this line of work?

thanks for that answer. As far as your final comment, I AM in this line of work. I am the type of person that likes to get input from those more experienced than I. Get my ducks in a row as it were. I don't appreciate the insinuation that I am not cut out for this. But thanks for your answer to two of my above questions.

 

[fed up]

thanks for that answer. As far as your final comment, I AM in this line of work. I am the type of person that likes to get input from those more experienced than I. Get my ducks in a row as it were. I don't appreciate the insinuation that I am not cut out for this. But thanks for your answer to two of my above questions.

I found the information by googling "colorado insurance agencies for sale" Computer and internet search is a wonderful thing

 

[Chris92]

I found the information by googling "colorado insurance agencies for sale" Computer and internet search is a wonderful thing

You know what else is a good thing? Not being disrespectful to people who just want to get input from others. This forum is for getting help from other people. Yes, I have done said search, but it doesn't hurt to ask other people what they think. If you think that asking questions on a forum, which is designed for such a thing, is the wrong way to go about getting information, then get off the forum. This is a place for mutual sharing of information, not disrespect. Thanks anyway.

 

[fed up]

Whatever. You got 1 reply and now you want to bash me because I asked a question.

 

[Chris92]

Whatever. You got 1 reply and now you want to bash me because I asked a question.

Well, thank you for the reply. I do mean that. But the question that you asked insinuated that I will not be good at this job. I don't appreciate that.

 

[Clueless2015]

I'm searching for some of the same answers but will share my limited knowledge...…….

1. I receive email alerts from Agency Equity with each posting. Several brokers such as Ron Christopher appear to post listings on a consistent basis. I'm always searching several other websites for listings with limited success. Most postings are old and sold or generate no response when attempting to contact.
2. Not sure on that answer. I recently posted a similar question regarding valuations.
3. Lots of potential variables but I think anything between 2-3.5x revenue should be considered. I completed a pre-approval process with a lender recently and it was eye opening.
4. I contacted several insurance lenders listed on these forums/ads on Agency Equity. I was unable to secure pre-approval without the total projected revenue exceeding 300k (current book plus acquisition). My conversations always had the same focus: handle debt service and be able to eat (numbers just didn't work for them until 300k)
5. Yes (with caution). I have purchased two small codes in my career. Carriers quickly approved both. One was with an agent that was honest and one was with an agent that wasn't. My bad experience would have me fearful of ever purchasing a smaller book in the future unless you have a great relationship with the seller.
6. I kept the codes separate on my first purchase and merged the codes at renewal on my second purchase. I took over the codes at purchase so I received the check from the carrier going forward.
7. I have yet to experience. Unsure of an answer.

Good luck!

 

[Chris92]

I'm searching for some of the same answers but will share my limited knowledge...…….

1. I receive email alerts from Agency Equity with each posting. Several brokers such as Ron Christopher appear to post listings on a consistent basis. I'm always searching several other websites for listings with limited success. Most postings are old and sold or generate no response when attempting to contact.
2. Not sure on that answer. I recently posted a similar question regarding valuations.
3. Lots of potential variables but I think anything between 2-3.5x revenue should be considered. I completed a pre-approval process with a lender recently and it was eye opening.
4. I contacted several insurance lenders listed on these forums/ads on Agency Equity. I was unable to secure pre-approval without the total projected revenue exceeding 300k (current book plus acquisition). My conversations always had the same focus: handle debt service and be able to eat (numbers just didn't work for them until 300k)
5. Yes (with caution). I have purchased two small codes in my career. Carriers quickly approved both. One was with an agent that was honest and one was with an agent that wasn't. My bad experience would have me fearful of ever purchasing a smaller book in the future unless you have a great relationship with the seller.
6. I kept the codes separate on my first purchase and merged the codes at renewal on my second purchase. I took over the codes at purchase so I received the check from the carrier going forward.
7. I have yet to experience. Unsure of an answer.

Good luck!

Thanks for the info! I'm more just curious at this point but asking questions for when I'm ready. I appreciate your answers!

 

[Markthebroker]

thanks for that answer. As far as your final comment, I AM in this line of work. I am the type of person that likes to get input from those more experienced than I. Get my ducks in a row as it were. I don't appreciate the insinuation that I am not cut out for this. But thanks for your answer to two of my above questions.

Well, thank you for the reply. I do mean that. But the question that you asked insinuated that I will not be good at this job. I don't appreciate that.

Wow dude, you are super touchy and sensitive. Your questions indicated to me as well that you are very green and new to this. Hopefully you aren't like this when dealing with clients.