Another Analysis ...Please?

[Tonymatz]

Hi..

You guys...(and Gals) are great..help me to determine if the Mat I am looking at here in Nassau County NY is worth making an offer on.

2000 sq feet
12 Primus 18lb $1.75
4 /25 lb $2.75
6 /35 lb $3.50
2 /50 lb $5.75
12 ADC @ .25 7/min no cool down
All 11 years old

Yearly sales $173,000 (80% coin)

Yearly:
Rent/Taxes & CAM $47K ouch
Payroll $35K
Gas $17.5k
Elec $6k
Water $3200

With other expences (which look ok) he is claiming a net of 50K
With a sale price of 200K

Do the utilities look to be in line with the gross sales for NY metro area Matz?
Thanks in advance!
Tony

[Tonymatz]

How difficult is it to get parts for Primus now...?
Tony

[Kitty]

That rent looks tough, is this a normal rate for your area?

Does the labor include WDF labor or is this just attendant labor? The Electric and Water expensed looks understated for the amount of revenue stated.

[Walter]

My opinion:

1. Rent/Cam is within acceptable range at 28%
2. Make sure WDF income isn't being double-counted
3. Water looks unrealistically low at $266/month
4. What about sewer charges?
5. What are lease terms/escalations? This is a very important issue.
6. As another poster pointed out, better check on parts availability...
7. Has volume been steady, rising or falling over last several years? - get a hold of utility bill history to confirm seller's statements...


Walter

[amartlock]

Walter -- I was reading your list of comments and didn't quite understand one thing. How would WDF be double counted? Can you explain.....I'm going to start looking for another mat and I want to make sure I know what to look for in regard to WDF.

[Kitty]

WDF revenue is put into machines and is considered cost of service. You do not want what is spent on the cost of the WDF to be included in the WDF revenue and the coin revenue. You must be sure the two incomes are seperate. You should figure the entire is the weight of the clothes, less the cost of the service = profit which will become your total sale amount.

The revenue from the coin receipts will most likely include the amount that is inserted into the machines from the WDF service as most owners do not deduct from the coin receipts but rather include this amount with their coin receipts and simply deduct the amount spent on the laundered items from the WDF revenue/sales. Hopefully you understand this rambling as most owners deduct the coin expense from the WDF business from the wdf net reciepts and count the profit only for the sale and state that as their income.

[pete f]

I question the water as well. My water USED to run about what the gas bill was. The water looks wrong. You are buying cash flow, a good store with 11 year old equipment, 4 times cash flow is not a terrible deal. The caveot I stress is to calculate THIS ( comming 12 months) years ' cash flow and offer the 4x that. With gas increase of 50%, rent going up 3.5% or better, you may look at an different number. All the yada yada we have covered in due dilligence to others applies.

[MSKLAUNDRY.]

Are these Primus "R" machines or "W". Big difference!!! If "w" then I would be hesitant to purchase just on that alone. If "r" then you can get most parts from a Maytag dealer, such as F'in Fowler, Yuck, Yuck.

If you have to slam the door to close then you have a "W" machine.

What about payroll, equipment repair, insurance and other misc. I see a lot coming in (maybe), and a lot going out (definatly), but very little going in the pocket where it should be.

[Anonymous]

I've got older equipment and I probably average $150 per month or so on various repairs.

Yeah it sounds like a lot, but you'd be surprised, there is always *something* out.

And occasionally you'll do something like replace 4 old coindrops with keltners, kicking up that monthly average number...

And speaking of water, I'm only doing 70k gross and my yearly water (sewer included) will be more than $3200.

- John