Help with value

[Haoleman]

I just received info on a mat I am considering. Some details are as follows:
Equipment: 20 18 lb top loaders, 8 18 lb front loaders 4 27 lb front loaders and 1 50lb front loaders. All Speed Queen
Dryers: 12 stacked 30lb SQ. 12 stacked 30lb Dexter. 3 Hicks 35lb. 2 50lb SQ.

Building is 2145 sq ft
rent currently is 13.75 sq ft annual plus a $2.25 pass through
for a total of $3160.00 per month.

gross is 110,000 and is operated unattended and currently no WDF service but had it several years ago
Any help in evaluating this would be appreciated I have water bills available too.

[Haoleman]

forgot to mention, the asking price is $145,000

[Duane]

Terry,

If the gross is $110k per year, lets do some real high level thinking to see what the mat is worth. These are just averages, your due diligence will be more accurate, but this will give you an idea if you want to do more research on the mat.

Expenses:

Lease $38,000
Utilities 27,500
Insurance 2,500
Phone 75
Vending supplies 7,000
Cleaning supplies 1,000
Building maint 500
Machine maint 1,500
Garbage 750
Advertising 1,000
Misc 1,175

Total $81,000


$110,000 less $81,000 = $29,000 net

Asking price is $145,000 or 5 times net.

Things to consider. If the above estimates are correct and the mat is new with equipment less than 2-3 years old then the store is worth considering. If the store is older and the equipment will need to be replaced soon and the store will need remodeling then the purchase price should be closer to $75 to $85k (depending on condition it could be more or much less).

Will you be able to get a lease for 15 years with two or three 5 year options?

Other expenses to consider is lawyer fees to set up an LLC and accounting fees if you are not comfortable with doing the returns yourself. Are you capable to do the repairs on the equipment yourself? If not, it can be costly to hire it out.

A mat is a retail business that needs to be attended to 7 days a week.

Duane.

www.LMARIES.com (http://www.LMARIES.com)

[petefritz]

a 110k a year unattended mat should net more than 29k a year if careful.
Sounds like a fair price if everything is in at least average condition, and the chances for it continue to make that money are good, IE, no new mats or space available within the market area. You certainly can not build a new one for that kind of asking price.
The rent is on the high side, but with a volume store like that it is not bad, though you ARE working for the landlord more.

[spiderman]

I also found a mat in chicago. He is asking 180,000. He has 39 washer and 18 dryers. He says his gross revenue is 140,000, expenses 75,000 and he nets 63,000. The area is great and the space is pretty large. Can you check his water bill to see if he is doing these numbers? thanks

Pete