Newbie Question - 2 bay LW 4000 Valuation Help

[bcdawkin]

I have a property under contract and would greatly appreciate the opinion of others on this site as to value.

The property consist of 2 laserwash 4000 bays that were built in 2001 and then upgraded to the treadless in 2003. The property also has 2 vacum stations.

The property has been doing revenue of about 210,000/year and net operating income of 140,000/year.

The property has traffic count of 30,000 per day on a 45 mph street with that consist of two lanes and a turning lane.

I am a property guy with a handfull of commercial holdings. However, this is a little out of my norm and would appreciate any comments.

We have the resources in place to be hands on doing basic repairs in-house once we come up the learning curve.

I am just looking for some ballpark info.

Thanks

 

[MEP001]

Are those claimed numbers or do you have reads off the machine and bookkeeping records for expenses? Those numbers seem unusually high. 66% net for a touchless automatic would be fantastic.

 

[bcdawkin]

As of now, these numbers come from the seller and are also in a recent appraisal. I am assuming that the numbers in the appraisal also come from the seller. We have requested tax returns for the business as well as water bills.

I have not seen reads off of the machine. Is it possible to see numbers on the machine for the past 3 years?

What would be considered a realistic net % for a touchless?

Thanks for all the help.

 

[MEP001]

Car counts per cycle compared to the pricing structure will be the only way to determine actual income. There should be non-resettable numbers either in the machine's "brain" or in the auto cashiers.

Another thing to consider is the age of the machines. If they're really doing the numbers they claim, they're both at or near the end of their life expectancy and will either need to be replaced or will be a constant maintenance concern.

 

[raisetheprice]

Based on a $7 average they're doing about 2500 cars a month. Not terrible by any means, but a double bay should average no less than a 100 cars a day to be considered a solid winner in my book. If you live there...do it. If you don't live within 20 minutes don't.

 

[PEI]

I would not recommend trusting the sellers numbers. Get the nonresettables and tax returns.

Since you are new to Laserwashes, I would also recommend finding out who your PDQ Distributor and Wash World Distributor is. You will need one or the other to help with your learning curve. Pick one and have them come and evaluate the condition of the machines. If they have been properly cared for then you should not need to worry about their age from a mechanical standpoint. I have a Laserwash that is 18 years old and runs as well as my 5 year old lasers. If they have not been well maintained, however, you may be looking at a tremendous amount of cost to bring them back up to like new. In fact if the numbers you have provided prove to be accurate I would recommend new equipment if the existing machines are in poor condition.

 

[bcdawkin]

Thanks for the advice. That is exactly what I did. I contacted the pdq distributor in the area. I got an estimate of 21,000 to bring the equipment up to the pdq spec. So roughly 10k per bay. It did not seem too major.

 

[MEP001]

I got an estimate of 21,000 to bring the equipment up to the pdq spec. So roughly 10k per bay. It did not seem too major.

That doesn't seem too bad if the numbers they provided are accurate.

 

[mac]

I would also get an estimate from a local Wash World dist. These sites can be easy pickings for a distributor taking advantage of someone new to the business. It may or may not be a good repair estimate. Don't be too free with your money at this point.

 

[Greg Pack]

Operating expense of 33% is below average. water/sewer can be the big wildcard here and can vary greatly from site to site. I would budget at least40% expenses to be on the safe side.

Also, I'm sure you can count but those autos are seven years old. Automatics age like dogs.