appraisal

[bonanza1]

I have a 9 year old, 120ft Exterior Express, In very good condition many upgrades in the past 24 months, my average sales are in the $625,000 range for the past 3 years, I have someone wanting to buy the wash and the local appraiser is coming in with a value of about 1.7 mil , this seems a little low ? Looking for some insight on how to put a price on a Exterior Express.

 

[robert roman]

I have a 9 year old, 120ft Exterior Express, In very good condition many upgrades in the past 24 months, my average sales are in the $625,000 range for the past 3 years, I have someone wanting to buy the wash and the local appraiser is coming in with a value of about 1.7 mil , this seems a little low ? Looking for some insight on how to put a price on a Exterior Express.

Yes, it does seem low based on income. So, my advice is to obtain opinion of value prepared by someone with carwash experience.

For example, a common method to calculate market value of express is to apply a risked adjusted capitalization rate against earnings and then adjust the preliminary for assets (i.e. F/F/E, real estate) and any liabilities (i.e. pre-paid, vouchers).

PM me if you want more information.

 

[tiptopcw]

try to get some number from one of those business for sale sites. find a couple of locations that is by you with a similar size and set up. use that to get a reference price.

 

[bonanza1]

I sold my Express wash yesterday for 2.2 ,the appraisal come back at $2.150,00

 

[tiptopcw]

if you sold to someone new at the business, you can make more. my friend's wash does 30k cars annually sold half his partner's share for 500k. i would not pay that much money for 100 percent. appraisers are lazy, when i was buying my first wash, they came in numbers that is either too high or too low. they just use whatever number they got from property site.

 

[BBE]

Depends on what your NOI looks like. Was the appraisal broken down into RE, FF&E, and goodwill? Or was it appraised as a "going concern"

If you didn't spoon feed info with your P&L's, and make your own NOI for him to follow, I'm sure he did it on his own, and then attached a cap rate to it. This is most likely the reason for your lower than expected value.

 

[robert roman]

if you sold to someone new at the business, you can make more. my friend's wash does 30k cars annually sold half his partner's share for 500k. i would not pay that much money for 100 percent. appraisers are lazy, when i was buying my first wash, they came in numbers that is either too high or too low. they just use whatever number they got from property site.

”if you sold to someone new at the business, you can make more.”

Sure, if you jerk them around on price with it’s a “cash business” routine.

I advise new-to-industry to pay “less” than someone with experience because someone new at the business faces greater operations risks.

“….my friend's wash does 30k cars annually sold half his partner's share for 500k.”

I’ve seen 30K X $10 average = $300K as well as 30K X $30 average = $900K

Can’t make sense of $500K without some clue as to income or earning?

“…sold half his partner’s share….”

I like to know how that works.

Are you just making this stuff up?

 

[hkim310]

bonanza1, if you don't mind me asking, what were the gross sales for your Express Wash that you sold for 2.2?

 

[New Kid]

Hello,

Did you get your update numbers?

 

[New Kid]

Hello Robert,

You note that these numbers seem low. If everything is correct, what should this number be? I see the post does not state anything about land and I assume that would be additional to what you feel the correct number should be.

 

[tiptopcw]

its my friend's location, he took over a beat down shop and updated it. his first year number was 29k @ 15 average.. let me put it this way, his wash was doing 40k month in business with 35k of expense and he manage to sell 50% of his share of business to somebody for half a mil. he did not make 500k for the year. i think you misunderstand me on that.

 

[tiptopcw]

the owner partner up with his sister but she decided to want out and he sold off her share.

 

[cityview]

It depends on the appraisal... There's so many different appraisal methods!

Seems like the most common valuation for car washes I've seen (I work with the SBA) is 2x Cash Flow + Property Value + 1/2 of Equipment value.