2 Car Washes near me for sale are either worth it?

[Tjmcnich]

Hi Guys,

Would love to get into the car wash game at some point in my life. An Established Car wash near me just went on the market that's been open since 1968. The newest owner bought it in 2016 and put about 250k into the car wash to bring it up to date. Sadly he passed away very recently and the family is getting rid of it. (3 self service and 1 touchless automatic) The property looks spotless and the family is asking $360k. I asked for the books and from Jan thru June 2018 the business did 63k in sales and 17k in profit. The lot alone with nothing on it would probably go for $150-200k. I know this is very rough information as its all I have at the moment but does this sound promising?

Option 2

3 Self Service Bays 2 Touchless Automatics recently overhauled in a market that's big time on the up & up on a 21k sqaure foot lot. Owner claims its been profitable for 12 straight years and he is asking for $650,000. I've driven past this place and it does look very clean. Roughly 22,000 cars pass by daily. I have not reached out to the owner yet.

Both places have zero employees.

Thanks!
Tommy

 

[robert roman]

Sorry, there is simply not enough information to give a meaningful answer.

 

[MEP001]

Both places have zero employees.

If they're clean, they have "employees," whether it's paid attendants or owner/family keeping it clean. Don't fool yourself into thinking you can run it with no employees and come by once a week to pick up money.

 

[Main Street Carwash]

I agree with both MEP and Bob. On the surface, the first one may warrant further investigation as it appears to be priced at 3x earnings but there are way too many unknowns to make any intelligent suggestions beyond that. MEP is absolutely correct in advising you that these places require daily input if they are to be run well and kept clean and presentable. They are not money trees like so many newbie owners thought they were when they purchased. Be wary of buying yourself a job.

 

[Tjmcnich]

I was planning on going there once per day to do the "up keep" of the property. There is a guy in my area that does the services and maintenance of the machines I've talked to him a few times but that's about it. When looking to buy a property at what X earnings do you consider a good buy? 3-5 times earnings? These two properties I thought might be good choices because the land comes with the car wash and both have been recently upgraded.

Thanks for the inputs so far,
Tommy

 

[OurTown]

If you are going to finance it then talk to a bank to see what they require before getting too excited.

 

[MEP001]

If you plan on letting someone do your maintenance, you'll be giving him most of your profit. Car washes are pretty low income for the investment. The only way most make a decent living off their car washes is by doing almost all their own repairs.

 

[robert roman]

Start with fundamentals. Self-service is passive income asset. It’s considered passive because employees are not required to operate the facility. Indirect labor is required for housekeeping, maintenance, and administration. Market value is normally determined through cost, market, and income approach. Since self-service buildings and equipment have very low liquidation rate, value is mostly a function of real estate value and free available cash flow from operations. Consequently, income multiplies are only used to test market value. My advice is to get someone with industry experience to work with you to evaluate your prospects.

 

[OurTown]

And remember free advice is worth every penny you pay.....possibly less.