Tunnel car wash

[Gobears81]

Does anyone here have experience with this type of property? It has been several years since I have appraised this type of property and the financials that I am working with are extremely poor, even for a car wash.

 

[BRCJR]

Does anyone here have experience with this type of property? It has been several years since I have appraised this type of property and the financials that I am working with are extremely poor, even for a car wash.

Sent you a private message.....

 

[Terrel L. Shields]

the financials that I am working with are extremely poor, even for a car wash.

Were they the "tax" numbers? Or, the "real" numbers?

 

[Gobears81]

Were they the "tax" numbers? Or, the "real" numbers?

I remember appraising a self-serve about a year or so ago, and the "financials" were monthly deposits shown on bank statements. I wasn't even able to get that much evidence in this case.

 

[Terrel L. Shields]

My brother was a stickler on this when lending. He told one guy they would only lend so much on his balance sheet and the borrower said, "Well, you know most businesses under-report income if they take in cash to reduce taxes." My brother simply told them this is what the IRS knows, and this is why we won't lend more. The bank examiners are quick to question lending high LTV amounts to businesses with very little reported income. They point out the bank is taking a risk.

 

[KHS445]

In both my lending and appraisal careers I always told owners of majority cash businesses, you either get paid a little bit every year by under reporting your revenue or inflating expenses, or you get paid out a larger sum when you go to sell. The only place I found this not to be true was when a competitor was buying them out and they would look at things like water usage

I have told people in a majority cash business to start reporting more of their income three years or more before they plan on selling,
so by their final year they are reporting nearly 100% of their revenue. .

 

[Raven59]

I did one about three years ago and will never do another again. It was a new construction, so there were no financials. A group out of Virginia does a lot of them in the surrounding states. I'll look for their contact info. Are you looking for data or feedback?

 

[Gobears81]

I did one about three years ago and will never do another again. It was a new construction, so there were no financials. A group out of Virginia does a lot of them in the surrounding states. I'll look for their contact info. Are you looking for data or feedback?

I talked to a few appraisers about this yesterday, so not too big of a deal. It's a frustrating assignment because of the shoddy financials provided and the lack of sales data that is comparable. Most of the sales that I've located are the more functional tunnel washes that are selling for $3 M or more, so finding tunnels with functional obsolescence has been a challenge.

 

[JTip]

Car wash = metered water usage.

Easy(ier) to figure out income when you know EXACTLY how much water is needed for each wash package, especially for self service bays.

 

[Terrel L. Shields]

Car wash = metered water usage.

Easy(ier) to figure out income when you know EXACTLY how much water is needed for each wash package, especially for self service bays.

never thought of that... I do recall the guy losing money in a self-serve found out a starling had figured a way steal coins from the vending machine and when they put a camera on it, found out that the bird had several hundred dollars of quarters stashed on the roof of the car wash.