The difference between that and a new office is that with a new office you would have to do the footwork of meeting referring sources, advertising, etc to get to the collections or production you are looking for.

I did that anyway! That’s just good business! The starting collections weren’t anywhere near what I was looking for. In fact, if I had opened a practice from scratch, it would not have looked much different than purchasing this and I think the results would not be any different either. The only difference is that I didn’t have to wait 18 months for construction to get started. In that sense, there is no goodwill. It was basically a startup without any construction delays.

We could go back and forth … goodwill is tied to the doctor. By and large, there is no goodwill in specialty offices. Specialty offices are asset purchase deals, regardless of what the broker/dentists/accountants would like to think. In my case, the assets are virtually worthless. Thus the value of the deal is in the existing TI.

As for the operatories, they cost me >$100k each. I upgraded all the equipment. In that sense, the existing equipment had virtually zero value. I would value the equipment that I still use from the initial asset purchase at less than $100k. I purchased more than $300k in new equipment.