Looking to build/retrofit into a small tunnel - need some example numbers/advice

Joe Streeter said:

Here is what I need advice on:

- Existing building is only 90ft long land is about an acre in size, but building may be able to be retrofitted for a car wash to save cost on building? I have seen tunnel washes at 90ft, so I know it is possible, but is it a bad move?

- Asking price for land is around 2 million, although that is overpriced and I think the owner wants to unload it so maybe it can be acquired for 1.3-1.6mil.

- What are some building costs I should be pricing out for a small tunnel like this?

- What are the monthly costs, and what do I need to make/wash to be profitable?

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AnalyticWash said:

Just my opinion, but, based on you asking these questions, you should not build a car wash. You have a lot of research you still need to do.

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Waxman said:

you need to do your own research into the car wash business by reading more past posts on this forum, hiring a consultant, taking tunnel operators out to lunch in order to get information, contacting the ICA , etc. Going on a public forum like this and asking such broad and general questions is not legitimate research.

another idea is to get a job at a car wash like what you want to build and see how it operates on a daily basis. Tunnel operations require significant labor unlike the self-serve car wash business and the laundromat business which although they require labor it's minimal compared to a tunnel car wash.

It sounds to me like the land is awfully expensive and maybe with some thing that expensive the highest and best use is something besides a car wash. I think a lot of the operators here will tell you that it's a better idea to buy an existing wash that's already operating and that has a customer base etc. I think building a brand new project on land that expensive in an industry where you have zero experience is a recipe for failure.

Often it's best to begin with all the expenses and work backwards from there to determine if your potential revenue is adequate. You can get estimates on a building and equipment and improvements if you get to that point in your due diligence.

You said you had been involved in real estate and the laundromat business etc. How did you get started in that? What due diligence is required for those businesses? Going on a forum like this and asking such broad general questions is going to lead people to believe that you have a long way to go in creating a car wash business from scratch.

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Axxlrod said:

I'll help you. I've built several tunnels in the 90' range. Working on an 85' tunnel right now.

With tunnels, longer is always better, but 90' is about the minimum to handle decent volume. Shorter than that, and compromises have to be made.

Reusing and modifying an existing building can save money, but can create other challenges at the same time. There are minimum turning radius' required to get into and out of tunnels. Keeping the existing building won't do much good if it messes up the other areas of the layout.

What area of the country are you in? Whether and seasonality have huge swing effects on this industry. Bonus if it snows there.

The population in the trade area sounds good, but traffic counts are just as important. You can build and design a banger of wash on an acre for sure. It's better if the property is rectangular than square.

Does zoning allow for car wash use? Rezoning is a wild card and a pain to get done. Even CUPs are difficult.

Since you're a newb, you really need to hire a consultant if you are serious about this plan. They will give honest assessments and walk you through the entire process. Worth their price of admission to a newb. You can also get assessments and info from the equip reps, but understand that they are biased.

I know the guys at Wash Guru are good consultants, but there are many around the country. Find one in your part of the country.

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Joe Streeter said:

Midwest, it snows. Traffic counts are about 25K. Not a wash within 2.5 miles near it. I don't know for sure about zoning, but I have a feeling the town would love it.

As far as consultants, I am worried all of a sudden I will have this call or consultation with them and then all of a sudden a car wash will be going up down the block or the land I am looking at will mysteriously disappear and I will see a "wash coming soon" sign. Happened to my dad with a self storage facility consultant. Hung up the phone and two months later there was one going up, two of them actually.

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Joe Streeter said:

Midwest, it snows. Traffic counts are about 25K. Not a wash within 2.5 miles near it. I don't know for sure about zoning, but I have a feeling the town would love it.

As far as consultants, I am worried all of a sudden I will have this call or consultation with them and then all of a sudden a car wash will be going up down the block or the land I am looking at will mysteriously disappear and I will see a "wash coming soon" sign. Happened to my dad with a self storage facility consultant. Hung up the phone and two months later there was one going up, two of them actually.

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Axxlrod said:

Hmmm. 25k traffic count is a little low for an expensive build. Plenty of washes are successful with that kind of traffic count, but I don't know how comfortable I would feel building a $5M - $6M wash with only 25k cars in front of me.

As for some costs, a 90' tunnel will run about $1M. Also central vacs run about $15k per space. I don't know construction costs in teh Midwest, but I'm planning on $2M for construction costs on the one I'm working on now. All plus $2M dirt can get dicey.

As for someone stealing your idea and property, it could happen. However, the ways things have been for years now is there pretty much is a car wash developer looking at every single property on major roads in just about every city. So if this property is on the public market, there probably is a wash developer already looking at it.

The best way would be to lock the property up first, and then start talking to people, if possible.

Plenty of car wash consultants in Chicago area too.

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Joe Streeter said:

Unless I have wrong data, the busiest wash within 2.5 miles do not have a higher traffic count than that. The new one that was just built, and I found out the owner has about 7 million in it, has a 15K traffic count.

The property is not listed for sale publicly.

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Joe Streeter said:

I don't know for sure about zoning, but I have a feeling the town would love it.

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Joe Streeter said:

Unless I have wrong data, the busiest wash within 2.5 miles do not have a higher traffic count than that. The new one that was just built, and I found out the owner has about 7 million in it, has a 15K traffic count.

The property is not listed for sale publicly.

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Axxlrod said:

As I said in my previous post, plenty of washes are successful at 25k traffic count. However, I would venture to say that most of them were built several years ago for 50% of what new builds cost today. And I would be nervous about building a $7M site with only 25kcpd. But that's just me.

The wash you reference at $7M is most likely owned by a huge chain backed by PE money. This means they can keep feeding it money if it doesn't stand on it's own. The PE groups don't care if a single site underperforms; they focus on the "big picture", whatever that means.

My advice still stands. If you are serious about this, then lock up the land, and then hire a consultant. Reading what some strangers say on the internet isn't enough.

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