How to evaluate this carwash (numbers)?

[robert roman]

I'm sorry you are so paranoid.

Yeah, maybe I should step it up a bit and change careers. Someone told me that McDonald's is hiring consultants as assistant managers.

Of course, I could also just sit back and watch for carwash sites to crash and burn, pick them up for $0.50 on dollar and then sell them to another sucker. No thanks, I like looking in the mirror in the morning.

I rather remain a mere "consultant" where I get to spend my time helping people create economic value to the benefit of all stakeholders.

Go throw stones at someone else.

 

[SwordRiver]

UPDATE:

This is what the seller told me about the "change for carwash" expense:

The "change" is the 1$ bills that go into the Access pay station for change, i.e. customer pays for $8 wash with a 20, machine is loaded with $1 bills to dispense the customer her $12 in change. We go to bank and write a check for $500-$1000 and "buy" 1 dollar bills, this is how that is accounted for.

The SBA will not allow an assumption of only one wash.

I am open to owner finance, not sure how it would work, but it is worth exploring. I am also open to selling 51%.

Is that how change is supposed to be done on the books?

I also emailed him a list of questions, to which he responded he was going to ask his accountant... (pardon my french, but how the HELL wouldn't you know this about your own business, unless you're hiding something!?!! I dont buy it) Sounds too fishy for me to proceed guys The wash is virtually brand new, but doesn't seem anywhere near a good deal Especially on a business which he claims has not made any money in the last two years, he is asking TOO MUCH


My questions to seller:
1. How did the chemicals go up from 2007 to 2008, by $20,000. Yet the sales stayed the same?
2. Why is the liability insurance $5000 higher in 2008 than 2007?
3. Details on the workers compensation?
4. Why is there no payroll expense in 2007, but $44,000 in expenses listed for 2008??
5. Net income in 2007, was listed as 25K.. and a paper loss of -800 shows up for 2008
6. Why are utility costs $10,000 higher in 2008 than in 2007, but the sales the same?

 

[Whale of a Wash]

Forget all the numbers that this guy is throwing around. Unless you win the powerball this week it will not support a $1.2m mortgage. You need to do the numbers or you will be in worse financial trouble than the current owner. If you put down 20% or $240,000
Monthly payment: 15 Years
Interest rate: 5.750%
Loan amount: $ 960,000.00
$ 7,971.94 a month I used an online Mort. Calc if it's incorrect.

You will need to be a bottom dweller and buy it for around 600K
His current loan at53K a yr is 4416$ A MONTH.
Look at the latest issue of (Time magazine,) Vegas has 8 unfinished resorts with bottom dwelling billionaires waiting it out until the time is right, to swoop up these places when they become a bargain, maybe 2-3 yrs it says.

 

[Earl Weiss]

UPDATE:

This is what the seller told me about the "change for carwash" expense:


TOO MUCH

NOt AFAIAC.

FWIW if your pay station / auto cashier starts with $1000 singles and dispenses them all as change, then it will have $1000.00 more in large Bills then the total "Cash Sales" thru the pay station.

You deposit the amount of cash sales as part of your daily reciepts so your deposits equal your cash sales, and you take the extra $1000.00 to the bank and exchange it for singles. Why even bother with writing a check?

Otherwise, if you count the extra $ as a sale you are overstating your sales.

 

[SwordRiver]

You will need to be a bottom dweller and buy it for around 600K
His current loan at53K a yr is 4416$ A MONTH.

I'm with you on this. The numbers can't support this deal, at the stated price.

NOt AFAIAC.

You dont think this is overpriced??

 

[Earl Weiss]

I'm with you on this. The numbers can't support this deal, at the stated price.



You dont think this is overpriced??

The ot AFAIAC comment related to handling change restocking as an expense which means you would have to offset it by overstating sales.

 

[jjw]

Buy the note. Take 1st pos. and take the wash for half the asking. It would cash flow at four to five hundred K nicely. jjw