How to value SS Carwash

[Hondo 82]

I'm not new, but I haven't been active on the forum in the least. I've owned a laundromat for almost 13 years and it is successful. I've been wanting to purchase a particular self serve car wash for years. I've known the current owner for well over 20 years, and he's approached me the other day ready to retire. This particular wash is not what I would call a zombie, but it could defiantly use upgrades. I searched some threads and would like some fresh prospective of some things to looks for. It does include the land, and is a good location. 4 bays with possible room to put a couple detail bays. I know what the net as been for the last few years. Even with the new auto carwashes coming in over the last few years, it continues to grow in revenue. It's making a modest net, and would be a great addition to my laundromat. Mat business is slow in the summer, great in the winter. Carwash in the opposite. Thanks for all the input in advance. Mush appreciated.

 

[Greg Pack]

There's an old rule of thumb multiple that a wash is generally worth 3-5X Gross income. In prosperous times and in low interest rate environments it will drift higher, and if the wash is a dog it will go lower. I've seen low grossing washes go for 2X GIM. This multiplier assumes the land is included. The lower the gross revenue is, the lower the multiple because certain costs are fixed( lighting, property taxes) and labor and other expenses does not necessarily track revenue. If you feel comfortable sharing more about revenue we're all glad to spitball. A few pictures really help. If the value of the land is higher than the value of the wash that can obviously skew things too, and in that instance it's reasonable to pay land value if you think it's a decent piece that will appreciate. .

 

[Hondo 82]

I feel comfortable. The last time I reviewed the numbers was about 14 months ago. Average gross was about $110-$120k about 3 years running. Our last meeting a week ago, the average is the same with slight increases. Net before tax is about $80-$85k. Again, needs some wand upgrades, paint, etc. But it is used and a popular place in our little area. The exit is tight, but city has already approved a new exit plans, hence the idea of adding 1 or 2 detail bays. Not really feasible to add wash bays, though that would be ideal.

 

[soonermajic]

Does it have CC's? If not, that makes it worth 10% more, easily.
Can u take in a SS bay, by equipment room, & add a Touchless IBA?
If this location is that great, ingress egress is good (getting better) remodel and add the Touchless & CCs. May gross $250k after...

 

[Keno]

If it is close to a zombie and needs a lot of repairs, updates, and upgrades probably will be lower to middle of the Gross Income Multiple. I would try to estimate costs to turnaround and subtract that from your value.

 

[Randy]

It all depends on the location of the car wash. If it’s in the Pacific Northwest it’ll be expensive, if it’s in Texas it’s going to be a lot less expensive. So without more information on the location of this mystery car wash it’s anyone’s wild a$$ guess as to what it’s worth.

 

[Hondo 82]

It is Northwest Ca.

 

[sjb]

I would respectfully challenge those net numbers based on the gross numbers….

From my experience, a 70% net is possible and achievable in this game, before debt service, but only with a higher sales volume….

It might be a wonderful opportunity for you, just continue to factor in the infamous caveat empor…

 

[Hondo 82]

I'm defiantly taking my time, and he isn't in any hurry either. Thanks.

 

[FuturaFan]

It is Northwest Ca.

at this point I would just give up knowing that it’s in CA

 

[Hondo 82]

If it wasn't for being born in the same town living on the same ranch and owning a small business already, we would have been gone a few years ago. It is a beautiful area. I just stepped out front and looked at Mount Shasta and Mount Lassen.

 

[FuturaFan]

If it wasn't for being born in the same town living on the same ranch and owning a small business already, we would have been gone a few years ago. It is a beautiful area. I just stepped out front and looked at Mount Shasta and Mount Lassen.

I feel bad for you. Just be glad you aren’t in LA. The regulations there are crazy.

 

[Kevin James]

Northern California is a really beautiful area. We love the Mt. Shasta area.
The problem now is a lot of car washes sit on dirt that is worth big big money. A friend of mine sold his 4 bay car wash for $975,000, the day after it closed the car wash was gone.

 

[yhannat]

My opinion the valuation would include the carwash income + property value. Assuming the carwash make 100k gross and land value is worth 900k. In this case it will be worth (300k for business) + 900k for land $1.2M. The income generated from the carwash would not justify the price unless you plan converting into something else ie residental/commercial property.

hope it helps

 

[Roz]

Dirt being worth more than a working self service carwash is happening in Colorado too. Crazy. You would think the high interest rates would cool off that buying spree but has not happened.

 

[FuturaFan]

Northern California is a really beautiful area. We love the Mt. Shasta area.
The problem now is a lot of car washes sit on dirt that is worth big big money. A friend of mine sold his 4 bay car wash for $975,000, the day after it closed the car wash was gone.

Keep in mind, a lot of car wash owners inflate the value of their washes due to emotional connections. The second wash we are almost done buying is higher than than the surveyed value. It makes a lot of money though so it being a little higher is understandable. The self serve we got, the owner was asking for almost a million for 8 self serve bays, unused truck wash bay, and a storage bay that used to be an automatic bay. My boss got them down a couple hundred thousand.

 

[FuturaFan]

Northern California is a really beautiful area. We love the Mt. Shasta area.
The problem now is a lot of car washes sit on dirt that is worth big big money. A friend of mine sold his 4 bay car wash for $975,000, the day after it closed the car wash was gone.

Ask how much the water bill is for the car wash. We get a good amount of traffic in self serve, and a very very good amount for our recent automatic install. We have very good water wells here, our water bill is only $300 a month.