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Valuation on purchase correct?

wash12

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Looking into the purchase of a 4 + 1 with real estate.

Land Value: 225k

4 self serves using Futura original equipment from 1998 "maintained well"

1 touchless auto Futura SSA "maintained well but starting to show its age 1998"

2 change machine, all self serve take card and quarters. 5 vacuums. Building in good shape, and self serves are tall only ones in town that could fit RVs. Town population is 75k+. On busy hwy that connects to other towns and reservation. Closet competition is 3.5 miles away and is cheaper but ran down and not very busy ever and not as good location.

Last year gross 254k Net 165k best year it has had in 4 years but this year to date the site is down 25% dry winter and new express wash 5 miles away put in 1 year ago have hurt it.

I am trying to figure out if the new express is going to take anymore business or if it is established by now being 1 year open.

Also trying to see how long I can get away with running the old equipment, the self serves should be able to run along time if well maintained I hear and the auto will probably need to be replaced in next few years as it breaks a lot.

I am looking to buy it for 600k, is this a fair price. I know self serves and know they are the pay phone of the phone industry but being where this is located is this one of the ones that will still survive?

Wash prices: self serve $3.75 for 4 mins , auto $7,$10,$12,$13 and vacs $2 for 4 mins.
 

MEP001

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Off-topic to your question, but plan on replacing the Futura SSA as soon as possible. There are more than a few proprietary parts and Specialty Equipment Co. is out of business. The self-serve side isn't a problem.
 

robert roman

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Seems like smell factor is pretty high; revenue trending down, obsolete equipment, declining segment, and prospect is “…is this one of the ones that will still survive?” rather than growth opportunity.
 

wash12

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Off-topic to your question, but plan on replacing the Futura SSA as soon as possible. There are more than a few proprietary parts and Specialty Equipment Co. is out of business. The self-serve side isn't a problem.
I was told you can still get all parts for the Futura SSA and a lot are generic. I thought a company bought there supplies and sells them, I will need to look into this.
 

Roz

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Most places I see with land are selling for 3x Net but really depends on the area and location (road visual and appeal). If you assume that you may lose another 10% Net due to competition you are at $150K x 3 or $450K.

Figure on spending $100K-$200K on a new IBA depending on what IBA setup you have (do you already have doors, dryers, spot free). Can building electrical panel handle a new machine or will that be an added upgrade? Given age of IBA I would guess that an offer of $450-$500K would make sense. Alternative approach is to ask a bank for a loan on the place and see how they value the asset without you making a personal guarantee.

Look at water use to verify the numbers to a degree.
 
Etowah

wash12

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Most places I see with land are selling for 3x Net but really depends on the area and location (road visual and appeal). If you assume that you may lose another 10% Net due to competition you are at $150K x 3 or $450K.

Figure on spending $100K-$200K on a new IBA depending on what IBA setup you have (do you already have doors, dryers, spot free). Can building electrical panel handle a new machine or will that be an added upgrade? Given age of IBA I would guess that an offer of $450-$500K would make sense. Alternative approach is to ask a bank for a loan on the place and see how they value the asset without you making a personal guarantee.

Look at water use to verify the numbers to a degree.
I thought the going rate on these where 3x gross not net? Has this changed over time?
 

Roz

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In hindsight I should not have provided a simplistic valuation calculation as valuations for car washes are a lot like real estate. Location location location. Can not compare a place in the NYC area to a place that is in a small town. The old adage that you can change a house but never move it is true for car washes too.

$600k might be a great price depending on the other variables regardless of numbers. At end of day I would look at last three years of numbers and see what is included in the $90k of expenses. Then figure if residual cash flow is acceptable after you service the debt.
 

robert roman

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OK, I’ll double down. Most operators I know would only be willing to pay about 50 percent of replacement cost new for a wash that has almost reached its expected useful life, say, 25 years. During this period, most operators would have reloaded the in-bay twice and overhauled and upgraded the wands.

Mostly likely well maintain means you have 20th century equipment for a 21st century world. I’d think twice about this gem.
 

traveler17

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I was told you can still get all parts for the Futura SSA and a lot are generic. I thought a company bought there supplies and sells them, I will need to look into this.
Tri Valley Equipment Sales is who I believe sells all the futura parts etc...
 

Randy

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I was told you can still get all parts for the Futura SSA and a lot are generic. I thought a company bought there supplies and sells them, I will need to look into this.
There’s a name from the past “Specialty car wash equipment” Does anyone remember when they went bankrupt and closed up? It seems like a long time ago, 10 years ago maybe. Boy did they make some garbage equipment.
 

Kramerwv

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There’s a name from the past “Specialty car wash equipment” Does anyone remember when they went bankrupt and closed up? It seems like a long time ago, 10 years ago maybe. Boy did they make some garbage equipment.
Tri valley does still have some parts for Futura. Our three bay revolutions are still doing fine. I think specialty went out in 2011.
 
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