How much would you pay for this mat?

[RBHII]

Sorry for the length of this post, but I have found this forum to be so valuable for information, I would appreciate feedback from any and all!

The mat I'm looking at has the following characteristics:

Coin Revenue: $120,000
WDF Revenue $80,000
Dry Clean: $24,000

After expenses, profit shows at about $110k per year. I've reviewed the expenses in detail, and am pretty comfortable that they are in line and include all applicable categories.

My concerns about the mat, in terms of arriving at a price to offer, are the following:

1.) All the equip. is old, 18 yrs. Has 4 triples, 6 doubles, 8 neptunes, 8 top loaders, plus 24 single dryers. Although working, every machine is getting to the end of it's life expectancy. I've heard some say not to worry too much about equip age if the cash flow is there.

2.) The WDF volume is a big piece of the overall revenue. Do people value this differently versus all coin revenue. I've ensured that revenue isn't being double counted, so my question is purely if the typical valuations (ie 3 to 5 times net, etc) apply in a situation with heavy WDF volume.

FWIW, the asking price is $229k. Part of me says that even at this price, I can afford to do a significant equip upgrade and still be under 3 times net. I'm intersted in any and all feedback!

[michaelmtrx]

If the profit is what it says and is true and there is no competition opening up down the block, then the asking price is fair

[azkid]

Personally, I'm always worried when I see one of these "too good to be true" deals. In this case I would be very surprised if they actually do that volume of WDF and DC.

[RBHII]

Thanks for the feedback. I've been in the store about 10 times, and every time they have a very large volume of wdf order in process....the poor attendant has many washers and dryers tagged with the name of the order, etc. So somehow they've built up that end of the business pretty well, and the area it is in would support that. I more worry about first, the equipment age and how that would factor in, and second, the fact that the attendants have been keeping all the wdf volume and I'd of course be looking to change that...and am therefore unsure if one attendant on at a time can handle that volume...

[millenniumplus]

Do not overlook the previous posts. They bring up some good points
to ponder. All most of us have is experience and what we do as a
guideline to answer questions out there. Anyhow, the devil is in the
details, is a true statement. Be sure you are provided all "other"
expenses. With wdf volume comes products/expenses to get the
job done (what's the monthly expenses). With that wdf volume
machines will be tied up and may effect walk in customers. Insurance,
garbage disposal, landscaping, bi-monthly a/c or heat maintenance,
gas, electric, water/sewer, salary come to mind. What kind of lease
agreement is there? Get a verbal dollar amount from the dry
cleaners they use. Most of the time dry cleaners keep an off
the books records of what goes in and out for any given "off the
books" account. Contact the distributor in your area to find out
how much the "proposed" new/newer machines may cost (eg.:
monthly payment). Also consider the value of the assets. Loans are
usually given based on mostly assets not potential. Ask the employees
about the business. What they like, don't like or how to improve
the business. Finally, think sellers usually factor in some bargining
in the asking price understanding buyers usually want a lower than
asking price.