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Value of SS Car Wash

N

Newbie9332

New member
Hi, I am new here but i have gone back and read the threads on this topic. I was wondering if anyone would give any insight into the price of this deal? Car wash has been around since 1990 and has 6 SS bays, 10 Vacuums, 1 automatic. Add says wash world equipment. The owner is asking 900k and total income is $148,500 with a operating expenses at 36,000 bringing the net at 112,000. The deal would include the land .71 acres. Assessment on the property is 390,500 Land and 170,370 structure. It is located on a busy highway next to a filled strip mall with a daily traffic count at 31,000. Nearest competition is 6 miles away.(which is also forsale at 850k). equipment appears to all be in working order but older. The SS bays only have brush and sprayer no tripple foam. Just interested in any feedback from experienced people in the business. Thanks

 
Gross Income multiplier is a 6. A good starting point is normally considered 3-5 x gross. How old is automatic? How many washes are on it? If it's 10 years old or older with 100k or more washes, it's due for replacement. That's expensive. The place looks decent. I'd like to see some pics of the equipment room and many more of the automatic. Make sure you verify income with 3 years tax returns. Are you also considering the competing wash as a potential purchase?

Looks like a fast road out front with traffic only able to access your lot from one direction. That's a rather large negative in my opinion. You want 30-40 mph speed limit with access from both directions if possible.

To me this looks like the typical 40 year old car wash that was very nice when new and now it's ok but kinda run-down and dated-looking because no one ever put too much money back into it over the years, upgrading equipment, painting, cleaning, fixing the dented IBA entry surround, landscaping, etc.
 
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Waxman said:
Gross Income multiplier is a 6. A good starting point is normally considered 3-5 x gross. How old is automatic? How many washes are on it? If it's 10 years old or older with 100k or more washes, it's due for replacement. That's expensive. The place looks decent. I'd like to see some pics of the equipment room and many more of the automatic. Make sure you verify income with 3 years tax returns. Are you also considering the competing wash as a potential purchase?

Looks like a fast road out front with traffic only able to access your lot from one direction. That's a rather large negative in my opinion. You want 30-40 mph speed limit with access from both directions if possible.

To me this looks like the typical 40 year old car wash that was very nice when new and now it's ok but kinda run-down and dated-looking because no one ever put too much money back into it over the years, upgrading equipment, painting, cleaning, fixing the dented IBA entry surround, landscaping, etc.
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Waxman said:
Gross Income multiplier is a 6. A good starting point is normally considered 3-5 x gross. How old is automatic? How many washes are on it? If it's 10 years old or older with 100k or more washes, it's due for replacement. That's expensive. The place looks decent. I'd like to see some pics of the equipment room and many more of the automatic. Make sure you verify income with 3 years tax returns. Are you also considering the competing wash as a potential purchase?

Looks like a fast road out front with traffic only able to access your lot from one direction. s a rather large negative in my opinion. You want 30-40 mph speed limit with access from both directions if possible.

To me this looks like the typical 40 year old car wash that was very nice when new and now it's ok but kinda run-down and dated-looking because no one ever put too much money back into it over the years, upgrading equipment, painting, cleaning, fixing the dented IBA entry surround, landscaping, etc.
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Waxman,
Is the formula of Gross income 3-5x then add land value or that formula is for everything? The area this is located in is not a place where land is crazy expensive. Thanks
 
There are many ways to value a business with or without real estate. 3-6x is one way, and a good starting point, but not the end all be all IMO. Way too many factors to just put a one size fits all valuation method on every car wash out there.
 
Not to beleaguer some of these points but:

1) 3 years of tax returns to verify income. Anything else should not be considered reliable.
2) Age of equipment is extremely relevant. If the auto is older you're looking at $250K +/- for replacement. Post pictures of the equipment room and bay setup. Contact the manufacturer of the equipment to find out if a) they are still in business and, if they are, b) do they still support those models. This includes boilers, softener, RO, pumptand, vacuums, well, etc. Everything. A lot of manufactures have gone away in the last 35 years and the ones still around may very well not have any support for your models. Spending a little cash now on a service tech or two to go through everything can save you tens, if not hundreds, of thousands down the road.
3) I'm not a fan of the traffic pattern either but if it's been around for 35 years it may not be an issue......but......if it's changed hands multiple times over that time it may be. Obviously, there can be a lot of reasons why a wash frequently changes hands but a very common one is it's just not a good location to begin with.
 
Dan kamsickas said:
Not to beleaguer some of these points but:

1) 3 years of tax returns to verify income. Anything else should not be considered reliable.
2) Age of equipment is extremely relevant. If the auto is older you're looking at $250K +/- for replacement. Post pictures of the equipment room and bay setup. Contact the manufacturer of the equipment to find out if a) they are still in business and, if they are, b) do they still support those models. This includes boilers, softener, RO, pumptand, vacuums, well, etc. Everything. A lot of manufactures have gone away in the last 35 years and the ones still around may very well not have any support for your models. Spending a little cash now on a service tech or two to go through everything can save you tens, if not hundreds, of thousands down the road.
3) I'm not a fan of the traffic pattern either but if it's been around for 35 years it may not be an issue......but......if it's changed hands multiple times over that time it may be. Obviously, there can be a lot of reasons why a wash frequently changes hands but a very common one is it's just not a good location to begin with.
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Dan,
It appears that it’s only been owned by one family for entire ownership. Where do you go about finding a technician to give you an honest opinion?
 
Newbie9332 said:
Where do you go about finding a technician to give you an honest opinion?
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First place is the manufacturers. Good ones will have people they can recommend but do tend to be biased toward selling you new. Also, due to recent consolidation there are several techs that have gone out on their own in recent years. Sometimes a quick google search helps. You're in VA so there is more than a few in that area because a couple of major distributors were bought out in the last few years and nearly all of the quality techs quit.
 
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