Advice on an offer to buy carwash

[soonermajic]

Buddy of mine bought a 5/1for $400k, has put $200k into it (new iBA Vacs etc). It now grosses $225!
He had a local old man Realtor call him, with a very serious inquiry. Old man claimed it's people from way away, but wouldn't say anything about their business (ie what they wanted to build, just wasn't a carwash). His lot is a PART of a super busy corner, headed to a resort area. Other part of corner lot is owned by a Trust, that is leasing to a storage bldgs business.
He asked me, & i told em im clueless.

How would you guys advise him? Should he tell them THEY have to make an offer first? If not should he ask for 4, 5, 6x gross? Get a Real Estate attorney first?
Old man Realtor won't even tell him who it is, only that they are VERY serious & want to know a price.

 

[Waxman]

$2,000,000

 

[OurTown]

How long ago did he buy it?

 

[Roz]

Land comps. Check to see if you can find local land sales for an identical type of parcel. Might be higher than anything based on financial multiple.

based on the financials he can ask for 5x gross revenue especially since the equipment is new. But given the unsolicited nature of the inquiry I would say ask for 7x to 8x and let them say no but we would offer Y.

 

[cbchevy4x4]

People ask all the time to buy. I tell them all the same thing "I'm not actively looking to sell, but if your serious and want to buy it make an offer because everything i own is for sale for the right price."

 

[soonermajic]

How long ago did he buy it?

Said he's only had it 36 mos..

Roz ,he says comparables won't work, cause it's a rural area, & nothing compares to it.

 

[Roz]

Said he's only had it 36 mos..

Roz ,he says comparables won't work, cause it's a rural area, & nothing compares to it.

If you want to sell you should get 5x gross since equipment is new and updated.

 

[soonermajic]

If you want to sell you should get 5x gross since equipment is new and updated.

Was thinking similar.
I told him he might tell em he doesn't care to sell, but THEY could make HIM an offer...

 

[HeyVern]

I'd tell them make an offer, see how serious they are.

 

[Earl Weiss]

Tell realtor what he wants NET of any commission and get an offer.

 

[soonermajic]

Tell realtor what he wants NET of any commission and get an offer.

I don't understand this...?

 

[OurTown]

I don't understand this...?

If he wants to net $1,000,000 at closing and the commissions and fees are lets say $60,000 then he would say he wants $1,060,000. That would be the contract price.

 

[GoBuckeyes]

If he’s not actively selling, tell the realtor to get a letter of intent from the people with an offer. Otherwise they’re just wasting his time.

I’d also tell the realtor his fees and commissions would be paid by the buyer.

 

[Randy]

Buddy of mine bought a 5/1for $400k, has put $200k into it (new iBA Vacs etc). It now grosses $225!
He had a local old man Realtor call him, with a very serious inquiry. Old man claimed it's people from way away, but wouldn't say anything about their business (ie what they wanted to build, just wasn't a carwash). His lot is a PART of a super busy corner, headed to a resort area. Other part of corner lot is owned by a Trust, that is leasing to a storage bldgs business.
He asked me, & i told em im clueless.

How would you guys advise him? Should he tell them THEY have to make an offer first? If not should he ask for 4, 5, 6x gross? Get a Real Estate attorney first?
Old man Realtor won't even tell him who it is, only that they are VERY serious & want to know a price.

I've gotten these calls from real estate whores before. Same story, "I have a investor who wants to buy your car wash how much do you want for it". Once you tell them to make an offer or what it's worth you never hear back from them again. He's fish'n

 

[Tom Thumb]

Buddy of mine bought a 5/1for $400k, has put $200k into it (new iBA Vacs etc). It now grosses $225!
He had a local old man Realtor call him, with a very serious inquiry. Old man claimed it's people from way away, but wouldn't say anything about their business (ie what they wanted to build, just wasn't a carwash). His lot is a PART of a super busy corner, headed to a resort area. Other part of corner lot is owned by a Trust, that is leasing to a storage bldgs business.
He asked me, & i told em im clueless.

How would you guys advise him? Should he tell them THEY have to make an offer first? If not should he ask for 4, 5, 6x gross? Get a Real Estate attorney first?
Old man Realtor won't even tell him who it is, only that they are VERY serious & want to know a price.

Me, I would tell them it's for sale but not on sale' make an offer.

 

[washnshine]

The heck with asking them for an offer if they will not even show who they are. Your friend should ask for the moon, and have buyer pay all realtor costs on top of that so he never has to lift a finger again and see how bad they really want it.

 

[Earl Weiss]

If he’s not actively selling, tell the realtor to get a letter of intent from the people with an offer. Otherwise they’re just wasting his time.

I’d also tell the realtor his fees and commissions would be paid by the buyer.

IMO LOI is a waste of time.

 

[soonermajic]

I kinda agree. LOi is a waste, w/out 5% Ernest $$, of an agreed upon price.

 

[Keno]

Need a written offer or its a waste of time, even then it can be a waste of time