Appraisal Business for Sale

[hastalavista]

I received a post card that was an advertisement for an appraisal business.

Located in the SF Bay Area, revenue of $241k in 2012, asking price is $175k.
The appraisal business includes residential, commercial, industrial, and undeveloped land.

I had heard that 1x annual gross revenues was a fair price.

 

[JTip]

175k for a rolodex of clients?

How much land do you get?

 

[Mountain Man]

175k for a rolodex of clients?

That was my first thought. Wonder if you'd also get several 5 year old lap tops, a dozen DC-40 digital cameras, and a whiny secretary to boot?

 

[Tim Hicks (Texas)]

There is never any guarantee that clients will stay. It always sounds like a risky investment.

 

[Pilgrum]

$241k? That is a bunch or appraisals at $250 per.

 

[Mr Rex]

If you already worked there, had the same ethics, quality, and service ideals as the current owner, it might be worth something. Otherwise, you may as well buy some Zaio. Bitcoin probably makes as much sense.

 

[Tim Hicks (Texas)]

If I sold my business-for about three times that much...lol. My clients would not have my name to order appraisals and just go to the next name on their list.

 

[Michigan CG]

$241k? That is a bunch or appraisals at $250 per.

It is only 80 appraisals at $3,000 -- the guy has a commercial license.

 

[The Warrior Monk]

There are way too many variables to begin to guesstimate what it may be worth. At that level of income, I'm assuming it's a small firm, and I'd assume that half the gross income would vanish when the company transfers. Then discount from there.

Personally, I wouldn't buy a small firm with money up front, unless its a huge discount. I'd do something like buy the phone line and pay the prior owner some percentage of the amount of work that comes in for some predefined period of time.

 

[hastalavista]

Personally, I wouldn't buy a small firm with money up front, unless its a huge discount. I'd do something like buy the phone line and pay the prior owner some percentage of the amount of work that comes in for some predefined period of time.

I agree with you.

And, Rex... you I think you are right as well. If one had been part of the firm and could really judge all the components, then it may be worthwhile.

The other parts of the advertisement (remember, this was on a post card) said that owner-financing is available and the owner would consider on staying on to ensure a smooth transition.

I think the real truth is that a small or one-person appraisal shop has little if any resale value; unless it is one of just a few firms in a relatively rural area.