Need opinion on SS price

So I own a number of Great Clips franchises, but I am looking at other ventures. I have been presented with an opportunity to buy 3 SS car washes in my city For many years, the same owner had these and the top line was around $200-220K for all three combined. He sold the car washes, and the new owner moved three states away and they have gone to pot. Many of the bays are not operational, etc. So the top line for 2022 was cut to around $140K. No word yet on 2023.

I am buying the actual property - nothing is leased. I would own everything.

I have an opportunity to buy all three for the mid $500K range. The seller is desperate. It seems like a very good deal. But of course, I have to figure out how much I'll have to spend to get the things back to operational. Does this sound like any sort of deal? If it's just a so-so deal, I'll just move on.

What do you guys think? Thank you in advance!

Doesn't sound like a steal. Sounds like a potential fair deal if you think the property is in a good area. There's a rule of thumb of SS washes being valued at 3x-5x gross sales and these would definitely fall into the low end of that gross income multiplier. Also, be aware that SS car washes are not passive investments. Someone who is handy and likes to tinker needs to be on your payroll.

Pictures would be enormously helpful.

Nickson said:

If it's just a so-so deal, I'll just move on.

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^^^This^^^

Greg Pack said:

Doesn't sound like a steal. Sounds like a potential fair deal if you think the property is in a good area. There's a rule of thumb of SS washes being valued at 3x-5x gross sales and these would definitely fall into the low end of that gross income multiplier. Also, be aware that SS car washes are not passive investments. Someone who is handy and likes to tinker needs to be on your payroll.

Pictures would be enormously helpful.

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3x-5x gross sales includes property or just business?

If SS equipment needs to be replaced you are looking at the low end of that range. But if land value is higher then that may be the floor asking price for the places.

RAAOO7 said:

3x-5x gross sales includes property or just business?

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Includes the dirt also

Sounds like the seller is motivated, which is good.…

look at the R/E and it’s future value….

Sounds promising, best of luck!

Land IS included.

So these three car washes were producing $200-220K top line for several years. Then this person bought them, moved out of state, and allowed them to go into disrepair. The realtor told me that she has "closed" them all effective 1/8. So now we are talking about "closed" businesses.

The realtor then said "the seller is open to all offers, and if it isn't sold soon, the seller will begin just selling all of the equipment."

Well, I wouldn't think a bunch of broken equipment would be worth much. $10K-20K tops? The realtor also said the seller needs enough to "pay off their loan." I asked how much the loan is, and she said $500K ish. But that's not jibing with the interest payments on the seller's P&L.

I'm thinking offer $300K cash, take it or leave it.

Question:

Are there companies out there that will travel to your location and fix up all of your things? I am fairly remote - the closest major city is 300 miles or so.