I am a looking at a 4 bay wash self service including 1 laser auto lane. I am a bit concerned about the price . The owner has told me he is grossing $120k and netting $60k. He is asking in the high $300's.
This could be a potential 10% cap rate ?
Also, how can i perform some testing to verify the water usage matches up with his stated gross dollars ?? Thanks
whats his irs statment say? you cant trust well i hold some back if hes wanting to sell then he has to have the paper work to back it up plus your banker will want to see it to the facts have to back it up or buying awishing well
Couple of questions: 1) Does the sale include the property if so what is its assesed value.
2) Does the current owner take a salary? Looks like no but ask the question.
3) What is the fair market value of the equipment? If you buy the business that should become yours. Confirm this with current landlord if not. Current case law states if something is bolted down it is the landlords property. (not an attorney but was in the middle of this with one of my washes)
4) Is there any other revenue stream you can add to the property. oil change, detail, uhaul rentals.......
If the property comes with the sale - no brainer - good deal for you. If the property does not - flip a coin. 20% return on 300k in a risky venture..... I hope you handy. If anything goes wrong in those bays that 60k net will be eaten up pretty quick.
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