Purchasing another wash, 4/1

[soonermajic]

What's the catch? Oklahoma Town of 5000, only wash in town, 4 SS(Carolina Pride no Cryptopay $2/4 min), LaserWash 360 that's 8 yrs old & avg 35/cpd. 4 vacs $1/4 min.
Last 2 yrs gross $225, we have tentatively agreed on purchase price of $500k!
Seems like a no-brainer. What am I Missing? We worked it out in a few texts...

 

[MudMoney]

Your an experienced operator,shouldn't be a problem. Congratulations!

 

[Greg Pack]

Sounds great. Land included? Any express washes being planned for the area?

 

[soonermajic]

Includes the half acre. No Xpress washes newrby or coming. I just can't see it. Almost sounds too good to be true. So I am moving cautiously

 

[soapy]

Less people are willing to put in the work to run these washes.

 

[JMMUSTANG]

Why are they selling?

 

[soonermajic]

Live 60 miles away, have 3 in their main town, & 67 yrs old , owned for 12 yrs, etc...

 

[Rfreeman]

Last 2 yrs gross $225,...

Per year $225K gross or last 2 yrs combined $225K which would be $112,500/yr

If it's the latter it's a good deal no need to proceed with caution if it's the former hell of a deal almost too good to be true

 

[soonermajic]

Last 2 yrs gross $225,...

Per year $225K gross or last 2 yrs combined $225K which would be $112,500/yr

If it's the latter it's a good deal no need to proceed with caution if it's the former hell of a deal almost too good to be true

rFreeman, it is the latter, & i am proceeding w/ more caution than if it was $112/yr, as $235/yr is like hitting the lottery!

 

[Rfreeman]

So then $112,500 per yr for $500K sounds like a good deal. Trust but verify....water bills, go by the place on a sunny Saturday

 

[traveler17]

Sooner are The numbers what he told you or did he show you a PnL? Usually when financing bank will want to see 3 years. Agree w Mr Freeman, sounds like a great deal

 

[slash007]

I'm confused... why is it a great deal at 4.5 gross? How big is the land? The Laserwash likely has tons of washes on it. Just curious.

 

[traveler17]

I'm confused... why is it a great deal at 4.5 gross? How big is the land? The Laserwash likely has tons of washes on it. Just curious.

I am looking at he’s the only game in town. I own a wash in a town of 5000 w one competitor think he could easily be pushing 200 w some updating. The couple businesses I’ve bought and sold in the past have always been 3 to 4x the gross. So unless there’s a TON of work to be done 4 1/2 wouldn’t faze me.

 

[soonermajic]

Sorry for the confusion. It has grossed $225 for the past 2 yrs, & $213 3 yrs ago.
So 2.2xGross! I literally feel like I hit the lottery!!
Bank wants 3 yrs or taxes & 2020 P&L

 

[traveler17]

Sorry for the confusion. It has grossed $225 for the past 2 yrs, & $213 3 yrs ago.
So 2.2xGross! I literally feel like I hit the lottery!!
Bank wants 3 yrs or taxes & 2020 P&L

Sounds like you did hit the lotto and a it’s no brainer!! Good luck, keep us posted

 

[I.B. Washincars]

Although it's still not clear whether it grossed 225K for EACH of the last two years, or that total is for both. If it's both, then we have 112,500 + 112,500 + 213K = 438K ÷ 3 = 146K. That's a multiple of 3.42 at the 500K asking price. The multiple sounds good by itself, but I would be very concerned about the drop for the last two years.

 

[eckert16]

I could be wrong, but I read it as:
the only wash in a town with 5000 population with no drop in 2020 from covid:
2018 grossed $213 (3 yrs ago, as we are in 2021).
2019 grossed $225;
2020 grossed $225;
______
$663 /3 = 221 for a 2.26 multple

VERSUS:
the only wash in a town with 5000 population with some event in 2019 that persists (factory closure?):
2018 grossed $213,000
2019 grossed $112,500
2020 grossed $112,500
______
$438 /3= 146 for a 3.42 multiple

 

[traveler17]

I could be wrong, but I read it as:
the only wash in a town with 5000 population with no drop in 2020 from covid:
2018 grossed $213 (3 yrs ago, as we are in 2021).
2019 grossed $225;
2020 grossed $225;
______
$663 /3 = 221 for a 2.26 multple

VERSUS:
the only wash in a town with 5000 population with some event in 2019 that persists (factory closure?):
2018 grossed $213,000
2019 grossed $112,500
2020 grossed $112,500
______
$438 /3= 146 for a 3.42 multiple

I read it as the first after explanation

 

[soonermajic]

Yes, 3 yr avg $221, & 2.25 multiple!!!

 

[Rfreeman]

That's a busy 4+1 should be easy to verify. Go by on the weekend and a couple of weekdays place should be humming right along. If it's not I would be very suspicious. Of course get tax returns etc. all the good stuff