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Selling my wash
- Thread starter mac
- Start date
Martins
Active member
The biggest thing i have found as looking for another location is yes 2-3x gross is where you want to be however that includes the property. as my bank stated to me " we dont want to own car washes and most people over pay for them because of the "land value" and we end up owning them shortly after because they can't afford the payments"
When looking at the sales numbers if a wash is making 30k and we say its worth 60-120k based on the income, however the property is worth 250,000 with a 5.2% cap and thats what its selling for, your already in the negative on overall NOI. which means the "specialty use property" and your income producing property would be losing money right off the bat making it a bad investment and the banks will not touch it at all.
I've looked at alot of washes lately and everyone is trying to get inflated top dollar prices because of the market which is fine but if its not making enough to make the mortage payment and still have some left the bank wont even look at it.
the whole point of my post however is not to crap on anyones listing, but more or less to make sure im in the right mind set on buying more washes. but also posting listings with cap rates will make it much easier for potential buyers and wont waste anyones time.
thoughts? also i sent your listing to a buddy who lives in fl looking for a new wash! looks good!
When looking at the sales numbers if a wash is making 30k and we say its worth 60-120k based on the income, however the property is worth 250,000 with a 5.2% cap and thats what its selling for, your already in the negative on overall NOI. which means the "specialty use property" and your income producing property would be losing money right off the bat making it a bad investment and the banks will not touch it at all.
I've looked at alot of washes lately and everyone is trying to get inflated top dollar prices because of the market which is fine but if its not making enough to make the mortage payment and still have some left the bank wont even look at it.
the whole point of my post however is not to crap on anyones listing, but more or less to make sure im in the right mind set on buying more washes. but also posting listings with cap rates will make it much easier for potential buyers and wont waste anyones time.
thoughts? also i sent your listing to a buddy who lives in fl looking for a new wash! looks good!
Roz
Well-known member
A). Banks do not want to lend money for a carwash purchase unless the buyer has enough assets to guarantee the loan repayment.
B) Sometimes paying land value over business value for a good location that is underperforming due to the current owner makes sense.
C). Some carwashes are selling in the 5x-10x range if they have significant revenue and number of cars washed for one location as interest rates are still uber low and the depreciation is an added value if you have offsetting revenue.
I think that maybe she told you it was listed on Loopnet. ABB HMI CP430B
Banks care about cash flow first and collateral second (if not third or fourth). As you state, if the business cannot repay the debt associated with the purchase then the Bank will pass. The guys that are paying 10x are private equity players chasing cash on cash yield with no borrowing. A different animal for sure and damn hard to compete against.
Beddattery
Member
Hey Mac....
Any interested/qualified buyers come your way???
I read in Auto laundry news that the 800 pound gorilla....Mr Car Wash...has purchased the 5 site Express/full service Downtowner chain in your town.
Got to be tough to compete with...
Good luck with the sale.....
Any interested/qualified buyers come your way???
I read in Auto laundry news that the 800 pound gorilla....Mr Car Wash...has purchased the 5 site Express/full service Downtowner chain in your town.
Got to be tough to compete with...
Good luck with the sale.....
Actually the Downtowner people are no real competition. Weekly I get reports of poor wash quality. I can wash stuff they can’t such as construction vehicles, boats, dually trucks, and tall vans. I have no close competition. And getting serious hits on the sale. When it sells I might become a golf pro.
cantbreak80
Maybe I need new clubs
SuperShine
Active member
Congrats Mac!
This is nuts. Buyers backed out at last minute. Then they changed their mind for the 10th time. Now they want it again. Told my broker only call me when you have cash in hand. Then last night heard they want it again. Meanwhile had a stringing attempt that crashed both changers and ruined the locks on the auto cashier.
Not really sure what’s going on. Now supposed to close within 30 days and then get money. Meanwhile the buyers claim that all my personal tools I had stored in the back are part of the deal. We’re talking maybe $15000 worth. And nowhere in the sales contract does it mention this and the contract says no changes are allowed. I’m starting a betting pool to see how long it takes them to realize they jumped into the deep end.
Eric H
Well-known member
Well, I wouldn't be complaining about them too much on this forum. Sometimes I forget that this is an open group and anyone can see every response even without being a member.
Can you put in the next contract that a non-refundable deposit is required. If they keep stringing you along they must be costing you money in lawyers fee, right?
traveler17
Well-known member
Exactly right. There should always be a due diligence period with an agreed on price held in escrow. Once time is up they forfeit the money. If they buy it goes towards the purchase.
Have not spent a dime yet. Get a deposit tomorrow and they have no idea places like this exist. Sitting pretty.