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Help Valuation on a 3 bay.

R

Ryancross11

Member
Looking for help on an evaluation on a 3 bay. 55k gross, 27k net. The flat roof is over 20years old. Needs new parking lot(Hasn’t been touched in 20 years). 1 block back from main road. (Tax value at $120k)
 
Ryancross11 said:
They wanted $325K…….
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How much do you think it's worth? Being 1 block off the main street is a huge negative and being that it hasn't had anything done to it in 20 years is another huge negative. With a tax value of only $120K it's not worth more more than that. I suppose you can't say what city this car wash is located.
 
12 times net and needs a lot of work? I see this all the time but if it were me I would give it a hard pass with the limited info so far.
 
Haha I offered 170k . They took it as an insult. I asked how they came up with the $325k and they said some guy who we get soap from said we could probably get that much. I only paid 225 for my 5 bay….. Funny they said they were so ready to get out and retire, but then it turned into “we don’t need to sell”….. oh well
 
I've been dealing with a couple brothers wanting the same, they bought the wash for $600k, ran it into the ground, then the freeze broke a bunch of stuff, now it's been shut down almost three years and they want $650k for it. "Yeah, it used to make really good money," well no one's going to pay based on what it USED to make. Land value isn't even $300k, and IMO that's all it's worth to reopen as a car wash.
 
Is $55,000 gross really Considered that low for a 3 bay SS. I know alot of 4 bays that don't do that maybe I live in the wrong part of the Country
 
Randy said:
Offer them $100K and see what they say.
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Is it 27k in EBITDA or Seller discretionary earnings?
The EBITDA multiples shall not exceed by 2-3 time--max-- due to the increase cost of debt (Fund +Prime rate is around 8 % current).
 
I would say to do a quick cashflow analysis (account for good scenarios-increase sales & negative scenarios-drop sales) to see if this works with your expectations.
I am normally looking to get 40 % return on my money, but everyone is different.
Hope I have answered your question.
 
Kanwal said:
I am normally looking to get 40 % return on my money, but everyone is different.
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40% return would be almost unheard of in the self serve car wash industry. You can get that with your down payment when getting a loan of course. With that being said we paid cash for our wash and after the fourth year are doing a return like that. That is without any outside labor costs so it is not a true return on our money. Since we bought that wash over five years ago I have been searching for a deal half as good and have come up with nothing.
 
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