It’s one of the first questions any new investor will ask when considering a new carwash build or existing location: How much is this carwash worth? For the past few years, I have presented a seminar on this topic at the Western Carwash Association’s annual show and convention in Las Vegas. I find the audience is typically split evenly between full service, express exterior and self-service carwash operators; all eagerly wanting to know what the current market values are due to the economy.
First, the bad news: Values are down by about 35 to 45 percent across the U.S. But don’t leave yet, I’m just getting started. I’m sure I’ll get a lot of mail over this “reality check,” but banks and appraisers both agree with me.
Related: Starting a carwash
The individual wanting a proper value of a carwash — with paperwork supporting that current value — has several options. The two most common are:
- Member of the Appraisal Institute (MAI) appraisal; or
- Opinion of Value (OOV).
To appraisers’ credit, they are bank/lender certified contractors who use a more intense appraisal report. This service generally costs $2,000-$3,500 per location and the appraisers will do a superb job — if they have direct experience and history of appraising carwashes.
Conversely to the MAI appraiser, there is the OOV. In this case, carwash consultants or persons like myself craft an appraisal for a fee of approximately $800-$1,500 per site. This service incorporates similar techniques to the MAI as an “acid test” of value for a buyer who would like a unbiased ‘opinion of value’ as to the value of a wash prior to making an offer. These appraisals can also be used by sellers or lenders in the sales process.
