Help Valuation on a 3 bay.

[Ryancross11]

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)

 

[Randy]

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)

Offer them $100K and see what they say.

 

[Ryancross11]

Offer them $100K and see what they say.

They wanted $325K…….

 

[Randy]

They wanted $325K…….

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.

 

[OurTown]

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.

 

[MudMoney]

Go with what Randy says 100k max.$ 55k gross is low for 3 bay.

 

[Ryancross11]

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

 

[MEP001]

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.

 

[Dan kamsickas]

They wanted $325K…….

And I want to be young and have good knees again but that's not gonna happen either.

 

[tdlconceptsllc]

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

 

[Kanwal]

Offer them $100K and see what they say.

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).

 

[Ryancross11]

27k ebitda

 

[Kanwal]

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.

 

[OurTown]

I am normally looking to get 40 % return on my money, but everyone is different.

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.