Good Mat?? Help, in analysis paralysis

[KTA]

This deal was in escrow and fell through because of lack of financing. I want to make an offer. It's in a great strip mall, very busy. Two mats are close by, but this one definitely has the best location. There are quite a few apts and rentals near by also. I would be financing 80%. About 1/3 of the sq footage is dedicated to dry cleaning and WDF.

9 year lease with 2 five year options.

12 top oaders - Speed queen 5 years
24 front loaders - Unimacs (18s,25s and 50s) 13 years

Rent 2854 for 2070 sq ft (California)
Electric 515
Gas 666
Sew/H2O 435 (This seems WAY TOO low doesn't it?)
Payroll 2970
Parts/Rep 222
Plus other misc stuff.

Income
WDF and Dry Cleaning 11633 (don't know break down)
Vending/Video 450

Net Monthly Income $3545

Asking price is $250,000.

Will verify numbers using utility bills, etc.

Based on what I've read on this site, this mat is pretty expensive, but mats in CA just aren't that cheap.

Thoughts, suggestions..........

[Anonymous]

Does not seem like a good deal, unless there is more to it. Your expenses seem understated especially sewer and water. You don't indicate a breakdown of coin versus wdf/dc nor do you show a cost for the drycleaning - typically around 50% of gross. You are suggesting a purchase price of almost 6X net for a mat with old equipment. You also don't indicate what rent increases if any kick in over time or with options.

Also many would suggest you are crazy to think you can make a go of this if you finance 80%. Do you realize that at 8% the annual interest on that loan -- forget about the principal-- is $16,000 a year. Think this one over very carefully.

[KTA]

It was not my intention to offer asking price. Based on the info I have so far, I'm not sure I could even offer 200k. It just seems that all the mats in my area are much more expensive than the ones I read about in this section. How many people actually purchase a mat from a broker vs locating one by working directly with an owner?

Kta

[Walter]

Kta,

Be careful. I've heard that PWS is building a large new mat in Manteca. Don't know if it's true, but you should check this out. Also, call Western States Design, and Innovative Laundry. Both of them are brokers & developers - see what plans, if any, they have for laundromats in Manteca.

Also, are you speaking directly with the owner, or working through a broker on this deal? If you want, you can PM me.

Hope this helps...

Walter