Leasing a Car Wash and Gas Station

[jfmoran]

To those who have leased washes: When evaluating leasing an existing wash with gas is there a standard percentage of revenue that you would use as a rule of thumb when determining what is a reasonable lease payment?

John

 

[robert roman]

When I evaluate lease or lease/purchase option, I begin with income and expense verification and then calculate a maximum allowable payment (lease/rent) based on a DSCR of 1.25. Having a maximum, you can then ratchet average monthly NOI and/or DSCR up and down to help determine what you consider is reasonable.

 

[jfmoran]

When I evaluate lease or lease/purchase option, I begin with income and expense verification and then calculate a maximum allowable payment (lease/rent) based on a DSCR of 1.25. Having a maximum, you can then ratchet average monthly NOI and/or DSCR up and down to help determine what you consider is reasonable.

Thanks for the response Robert, what does DSCR stand for?

 

[robert roman]

Thanks for the response Robert, what does DSCR stand for?

debt service coverage ratio

 

[jfmoran]

Thanks Robert hadn't heard that term before, but I understand the concept, apppreciate the response.

John