Evaluating First Deal, Need Advice on Questions

[PLM38]

Hey All, I’m new to the business and am evaluating new car washes for sale. I have two I’m looking at now of which the preliminary numbers look great. Great locations, we’ve tested the service, the net that the owner makes seems great. They are selling at 4x the net.

All that being said, what would you say are the best questions to ask/number to ask for before making an offer? Before due diligence. What’s reasonable to ask for at this stage?

 

[OurTown]

Are you saying these are newly built or new on the market? What type of washes are these? Do these include land? 4 times net would be crazy cheap around here. Most with land are 8 -15 or more times net. Are you sure they are not 4 times gross revenue?

 

[PLM38]

Are you saying these are newly built or new on the market? What type of washes are these? Do these include land? 4 times net would be crazy cheap around here. Most with land are 8 -15 or more times net. Are you sure they are not 4 times gross revenue?

No land included, it’s exactly 4x the net. The equipment is not new.

 

[OurTown]

That makes more sense. I usually don't look at deals without land but understand why some do.

 

[bkim13]

No land included, it’s exactly 4x the net. The equipment is not new.

what geography are u looking at? 4x net with land is a home run