Car Wash Appraisal

[Bubbles Galore]

I'm sure you guys will request more details, but here is the skinny. The appraisal when I purchased my car wash was at $620,000 in November of 2007. Since then, I have added credit card acceptance to my bays, a new vending maching, installed a dog wash and a new Washworld Razor.

I am located in Michigan, and would like to consolidate a few things and free up some cash flow. Given everyone's experience in the industry, what might be some thoughts on where my value would be?

Any and all help is appreciated!

Thanks!

 

[Jimmy Buffett]

I hate to say it but you may be lucky to stay where you were. The appraisal world is dramatically different than it was in '07.

 

[Bubbles Galore]

I understand...just curious if anyone has seen any hard numbers that they could share that might help to be a barometer.

 

[Indiana Wash]

How has your gross or net income changed since 2007? What kind of income was your previous appraisal based on?

I would bet that a current bank appraisal would put your car wash around $450k to $500k based on the overall status of the car wash industry.

 

[Louise]

I am currently undergoing an appraisal for a refinance. I'll impart any info as I receive it.

 

[Bubbles Galore]

How has your gross or net income changed since 2007? What kind of income was your previous appraisal based on?

I would bet that a current bank appraisal would put your car wash around $450k to $500k based on the overall status of the car wash industry.

Roughly a 20% increase year over year over the past 4 years.

 

[Bubbles Galore]

I am currently undergoing an appraisal for a refinance. I'll impart any info as I receive it.

That would be great! Thanks!

 

[soapy]

At the WCA convention I attended a workshop put on by Car wash Appraisers. It basically boiled down that a SS carwash value is equal to 5 times the gross sales amount. You can look them up on line.

 

[Bubbles Galore]

Thanks Soapy...I wonder if I can convince my lender of that?

 

[bigleo48]

At the WCA convention I attended a workshop put on by Car wash Appraisers. It basically boiled down that a SS carwash value is equal to 5 times the gross sales amount. You can look them up on line.

I wish! Soapy I know your just repeating what those guys were saying, but 5x gross sounds very high. Anybody get 5x recently?

 

[Greg Pack]

I guess it's regional to an extent. We're seeing a bunch of low grossing washes not sell at 5X around here. At these numbers it is close to half the cost of new construction. I talked to a car wash broker in Atlanta, he said they are usually getting around 4X for good washes with reasonable gross receipts. I know these rules of thumb can oversimplify things, but I guess that's why they're called "rules of thumb"

 

[Indiana Wash]

If your wash appraised over $600k 4 years ago and has since had more than 100% increase in gross sales, I can't imagine that the value hasn't increased significantly even with the downturn in appraisals. I would encourage my appraiser or lender to look at the loan from a ROI analysis. I believe most commercial appraisers look at the value 3 ways then average them.

 

[Ric]

At the WCA convention I attended a workshop put on by Car wash Appraisers. It basically boiled down that a SS carwash value is equal to 5 times the gross sales amount. You can look them up on line.

Must be a west coast thing...I'd take an offer of 5X gross.

 

[Bubbles Galore]

Well...we've started the preliminary process and have met with a few bankers. If we can pull this out, we will be in a MUCH better position financially, but you know how bankers can be...single use site...blah, blah, blah.

Has anyone refinanced in the last 2 years?

 

[Waxman]

I meet with my banker annually over lunch.

Since I feel like I am partners with my bank, I give them a thorough run-down of all I have been doing on my end; ways I am saving on the expense side and ways I am attempting to increasing profts, new business ideas like used car sales and their strategies, plus community service like charity washes and Grace for Vets.

Then I ask the bank if I am indeed getting the best possible rate for a business like mine (on-site owner who is hands-on, goal-oriented, serving the local community, etc.).

Last time I did this the banker lowered my rate with no other change in terms, no cost to me and a signature-only required.

 

[Bubbles Galore]

I meet with my banker annually over lunch.

Since I feel like I am partners with my bank, I give them a thorough run-down of all I have been doing on my end; ways I am saving on the expense side and ways I am attempting to increasing profts, new business ideas like used car sales and their strategies, plus community service like charity washes and Grace for Vets.

Then I ask the bank if I am indeed getting the best possible rate for a business like mine (on-site owner who is hands-on, goal-oriented, serving the local community, etc.).

Last time I did this the banker lowered my rate with no other change in terms, no cost to me and a signature-only required.

That is a great methodology to go about business, I wish I could do the same thing. A quick back story...my original loan officer was fired due to gross incompetence, we lacked formal contact with anyone for 2 years and since then have been through 4 different VP's of one type or another. The latest officer we spoke with told us point blank they don't value our business and find car washing to be very high risk. He was quick to say that 4 years of on-time loan payments essentially meant nothing and can't wait to get our loan off of their books.

The necessary evil that is banking...high and mighty sons of *%#^@!$

 

[mjwalsh]

At the WCA convention I attended a workshop put on by Car wash Appraisers. It basically boiled down that a SS carwash value is equal to 5 times the gross sales amount. You can look them up on line.

Soapy,

It seems like wishful thinking (hypish?) on the part of somebody --- that the Car Wash Appraisers on the WCA panel did not boil down more to the "business net income" or at minimum have the "net" as one of the key factors in the appraisal.

MJ

 

[soapy]

Anyone can contact the mentioned appraisers and have them do a appraisal for you. They sell washes all over the country and also do appraisals. I have not used them but in the past have found local appraisers to not be very well informed about car wash valuations.

 

[Bubbles Galore]

Anyone can contact the mentioned appraisers and have them do a appraisal for you. They sell washes all over the country and also do appraisals. I have not used them but in the past have found local appraisers to not be very well informed about car wash valuations.

Soapy, thanks for all your input on this thread. Just so I understand correctly, you feel as though they may offer a more accurate (higher in theory) value than a traditional commercial appraiser due to their knowledge of the market?