Some quick background:
No experience in this specific industry but am a real estate investor. I'm also somewhat handy so the small daily maintenance doesn't scare me and willing to pay technicians for big ticket items.
Deal is for 1 acre of land (all equipment conveys), car wash is on .39 of it. Remaining .61 is vacant land which I already have a plan for. *The plan for the vacant .61 acre is the value play for this entire deal, so just not trying to get ripped off with the car wash.
Asking $200K total, Car wash is 4 bay, 2 Vacuum bays and the business has been closed for 8 years.
Property is 15 minutes from home and have the time to put in 2-3 hrs of daily maintenance.
Owner retired (70s) lives an hr away and agent said "was tired of driving an hour to pick up quarters every other day".
Equipment looks in good shape (pics below, owner still comes to cut the lawn himself and never turned off utilities) and owner has agreed to run the machines with machine technicians present to asses any necessary repairs, which will be reflected in my offer.
Smallish town (pop. 8,000) but only car wash of any kind in 3-5 mile radius, at the busiest intersection in town and a brand new 400 unit subdivision is going up right across the street next year.
Says this was build in 1991.
My question is how do you valuate this business. The seller is listing it for sale "At a 10 Cap", selling price is $200K. Total tax assessment is $120K (Land $54K, Improvements $66K). When I asked for the last financials he provided and excel spreadsheet which claimed to be making $4700/mo gross. To me something doesn't add up if he was making only $20K NOI (10 cap at $200K ask) wink wink nudge nudge. I'm definitely not paying $200K, but wondering what some people with experience running these businesses would consider offering. Right now in reality it's just a closed car wash business on an acre of land. I've seen 3X gross income as a rule of thumb for an operating business. Currently I'm ball parking $30-40K of rehab which includes installation of new Cryptopay card systems and $10K for new signage.
Thanks so much for any input, it's greatly appreciated and helpful. Let me know if you need any more info or pics. Everyone have a great and productive day.
No experience in this specific industry but am a real estate investor. I'm also somewhat handy so the small daily maintenance doesn't scare me and willing to pay technicians for big ticket items.
Deal is for 1 acre of land (all equipment conveys), car wash is on .39 of it. Remaining .61 is vacant land which I already have a plan for. *The plan for the vacant .61 acre is the value play for this entire deal, so just not trying to get ripped off with the car wash.
Asking $200K total, Car wash is 4 bay, 2 Vacuum bays and the business has been closed for 8 years.
Property is 15 minutes from home and have the time to put in 2-3 hrs of daily maintenance.
Owner retired (70s) lives an hr away and agent said "was tired of driving an hour to pick up quarters every other day".
Equipment looks in good shape (pics below, owner still comes to cut the lawn himself and never turned off utilities) and owner has agreed to run the machines with machine technicians present to asses any necessary repairs, which will be reflected in my offer.
Smallish town (pop. 8,000) but only car wash of any kind in 3-5 mile radius, at the busiest intersection in town and a brand new 400 unit subdivision is going up right across the street next year.
Says this was build in 1991.
My question is how do you valuate this business. The seller is listing it for sale "At a 10 Cap", selling price is $200K. Total tax assessment is $120K (Land $54K, Improvements $66K). When I asked for the last financials he provided and excel spreadsheet which claimed to be making $4700/mo gross. To me something doesn't add up if he was making only $20K NOI (10 cap at $200K ask) wink wink nudge nudge. I'm definitely not paying $200K, but wondering what some people with experience running these businesses would consider offering. Right now in reality it's just a closed car wash business on an acre of land. I've seen 3X gross income as a rule of thumb for an operating business. Currently I'm ball parking $30-40K of rehab which includes installation of new Cryptopay card systems and $10K for new signage.
Thanks so much for any input, it's greatly appreciated and helpful. Let me know if you need any more info or pics. Everyone have a great and productive day.
