pricing of equipment used

[allansix98]

looking at a mat and the owner has broke out the cost of the used equipment and and was looking for some help to see if the equipment prices seemed in line or not. all equipment is said to be 7 years old and is clean and in average condition.

2 large America dryers $2,000 ea
2 large Wascomat Senior W-124 $2,000 ea
18 stackable Maytag Dryers $800 ea
36 Maytag front load washers $800 ea

any input on this would be of great help. It seems to me that thepricing of the equipment seems high.

Thanks six98

[Anonymous]

The equipment is worth approx ZERO - if you factor in the cost to move it then the value is negative. The true value of the equipment is its ability to generate a future income stream.

While it really does have some value perhaps 15 cents on the dollar of original price, as I said above it should be valued based on what it can earn not its value as metal.

[allansix98]

Kirby I think you must have miss understood me I am looking at the purchase of the whole operating mat and was trying to see if the equipment value was accurate.The equipment is generating revenue as is the mat and I understand how to figure an offer price off the net earnings and was trying only trying see if this owner was close on the breakout cost of his equipment.It does seem high to me, any help would be great

Six98

[Anonymous]

No, I understood you - I was just trying to explain that what you are purchasing is a stream of anticipated revenues that the equipment can generate. I don't quite understand why you want to put an accurate value on the equipment itself as that is not what you are purchasing. Used laundromats are bought and sold on the basis of a multiple of operating earnings not a multiple of the value of the equipment.

If you really want to know then yes the value of the equipment is a little high - but why do you care. From a tax vantage point you want to overvalue the equipment as it can be depreciated for tax purposes in five years whilst the intangible assets are ammortized over a 15 year timeframe.

[Kitty]

Wasco 184's listed in the Journal at 1200 each not rebuilt just selling as used equip

[Ken]

Are you buying a business or machines?
If the business has good location,business,rent....who care how much the machines?

[Jim]

I have heard of mats being priced two ways...

1) Priced by gross or net income...this is the most typical.

2) Priced by value of equipment: Washers, dryers, vending machines, etc etc..

Usually the 2nd option is because the mat is not doing as well income wise, so it is a way for the owner to make more by selling it piecemeal...
...Warning... if you are a buyer and purchasing it that way you have to realize the gross / net sales are low and the current owner knows it..

[srhaz]

My first mat I had bank financing and they wanted the approx value of the equipment. I think it just helped them with their decision to give me money or not.

[ajay]

When I lost my store, my equipment was worth nothing....however in the interest of buying a business, you do have to consider the cost of equipment and the business(customers). generally speaking 3-5year used equipment sells at half of the selling price new, also depended on the turns of the equipment - hence the age of the equipment is irrellvant to the actual use(abuse) of the equipment.

2 large America dryers $2,000 ea
***if large is 50lbs then they should sell used for about $1000
2 large Wascomat Senior W-124 $2,000 ea
***w-124 used sell for $1500 to $2000(completely rebuilt)
18 stackable Maytag Dryers $800 ea
***if these are 30lb not 20lbs, this is price lowered but I think these are 20lb apartment grade so then priced accordingly.
36 Maytag front load washers $800 ea
***Not sure what size, but if they are 18lb machines(double load), they are priced accordingly.

Also, don't forget the cost of plumbing, electrical, etc.., as long as you're breaking down the cost of the business.


ajay

[Gary C]

The value I would put on it would be the cost to replace it if they all break down the day after you buy the place. That would be real value. Vaule is always a tuff one. Income stream is part off it replacement is the other part along with usefull life span.

Gary

[MichaelCa]

Everyone's response here is accurate from the distinct perspectives - i think it's good to take in all of it, then discern how you will apply it to your particular case.


As to actual machine marketplace values (and nothing more), here is my 2c as someone who is a used machine hound:

(keep in mind i'm in the land of 2.59/gal gas, and highest real estate prices in the US)

1.) If the ADC's are stacks, 2000 is underpriced: 2,500
(if they're singles, its overpriced)
2.) W-124 if in very good cond. then it's at marketprice.
(BTW, THAT is 12-20 years old)
3.) Maytag "apartment style" stacks: too high. 600 if in real
good cond. 400-500 is common.
4.) Maytag (Neptunes?): Since you say 7 years old, they may well be the "MAH14" series, in which case several ppl on this board may need them for Boat Moorings. (you pay freight)
At best they are the next series, which top price would be 300 (for the unsuspecting)