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6 SS Bay for First Investment

MEP001

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Came to right place for opinions on the subejct....In the interest of time.....$8000 Income/$90,000 purchase price is 8% return on investment.....I'd walk right there. Not worth my time the stock market has proved to return almost that (7%) since its inception. Unless you know something that land location etc is about to blow up or you can get the place for $50K (and you might since he wants out) I would keep looking for a better return on your investment of capital and TIME bc car wash do take the latter.
I would agree, except this wash could have a huge potential for increased revenue. Without knowing the area I have no opinion on whether this is a good deal or not.
 

Msaxonii

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Here are pictures of the next nearest SS. It is 3 - 4 miles away, on a more commercial corner. They do have a 1 touchless bay, two SS, a dog wash, and two bays for Pennzoil changes and light mechanical work. Like I said, this is the one that seems to be focused more on the wash as a compliment to the oil changes.

Their traffic flow also has issues due to the intersection as you go through the bay and you must go right. Other than the bays themselves, it's gravel/ asphalt with some severe potholes you need to pay attention to. Vacuums are $1 for 3 minutes. Also, no credit card or loyalty capability with self serve bays.
 

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OurTown

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How could you ever compete since they apparently have gold in their wax?
 

I.B. Washincars

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I think I saw on public records somewhere that this facility was built in the early 90s. Based on the pictures, would you say that the equipment hasn't been updated since and is at the end of its life, or worse, on borrowed time?
Self-Serve equipment it pretty generic and has changed little over the last few decades. It can be kept going indefinitely. I just sold my washes. All of them have equipment from the 90s. I don't think the new owner has plans to replace any of it, maybe add a thing or two, but nothing significant. The customer only knows/cares about what's happening in the bay.

I actually did replace the pumping plants in one of my washes that was built in 1990. It was not stainless steel and had rusted away so badly that it was falling over. I got a quote for new stands (3 bays, back in 2012), for about $26K. I ended up buying a used system built in 1995 and having it installed. So, unless you have a unique situation like I did, the only one that would make extra money by replacing equipment would be the installer.
 

Msaxonii

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I know local demographics is involved. City Data shows median income at just shy of $50k, with a population between Arnold and New Kensington of around 18k people. For the zip code, the population is about 38k people, similar income, but I'm more concerned about Arnold/ New Ken specific numbers because the carwash borders both.

My wife has been starting to come on board with the idea. We have had issues with her being able to work because of childcare issues. With her on board for just the wash, I think that it would give her a better feeling of accomplishment and more positivity in general. Additionally, with her willingness to help, and this being, literally, right outside my back gate, I think that adds a lot of personal benefit outside of the business aspect. She's a home maker now so she'd be able to help with small things like daily maintenance, and the time consuming task of being there a few days to monitor and give instructions on process changes and rollouts, like CryptoPay.

I understand I'm not going to have bright green profit right off the bat, if ever. My concern is ensuring that it's able to operate at black to dark green and cover itself until I'm able to secure funds for improvements.

This is a Streetview picture of the nearest self service that is exclusively car wash. It's 4 miles away, about ten minutes, but you have to cross a bridge to get to it and Pittsburghers don't like crossing bridges. I don't think that I would get regular customers from there, but expect possible customers that should be coming here stopping there during their commute. I'll go there tomorrow to check on their setup, wash times, prices. I know their automatics were from $5 to $9 packages.

Speaking of wash times, I'm not an avid cleaning specialist myself outside of work. I remember going to wash my Equinox and having to run two cycles to finish the wash. So if there are others having that same issue, I think that increasing wash time while increasing the price would reduce complaints.

Regarding the philanthropy, I understand needing to focus on fixing the current business first without getting sidetracked. Assuming that proper management can get this comfortably running green, then we will examine that aspect when we know how much loss per car we can absorb throughout the year without damaging anything else. I don't even look at it as philanthropy, but more along the line of alternative marketing.

Andrew Carnegie has been one of my idols for years. He came to this country with nothing and built himself to have a national impact. His life concept was split into thirds, gaining as much education in the first, amassing as much money in the second, and giving it away to noble causes in the third. I don't believe those have to be exclusive anymore, and one might question if he might have had more of an impact and more positive legacy if he had done them together.

Again, thanks to each of you for your advice and knowledge. I know if I do and can go forward with this, I'm definitely going to need it. And please don't feel slighted if I still go forward. One of my dad's friends asked him why I ask his advice when I go my own way anyhow, and my dad replied it's not about taking the advice, but that he thought to ask first.
 

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Rfreeman

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Here's the property listing for this place.


If you can deal with the owner direct I would recommend that because very few agents know how to establish a value on car washes. In an earlier post I gave you the story of my first purchase, I started by speaking with the agent but once I located the bank who owned the wash I went to their office. Ironically, after we closed the agent had 2 other car wash owned by the same bank and he was no longer the listing agent on those properties.
 

Msaxonii

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If you can deal with the owner direct I would recommend that because very few agents know how to establish a value on car washes. In an earlier post I gave you the story of my first purchase, I started by speaking with the agent but once I located the bank who owned the wash I went to their office. Ironically, after we closed the agent had 2 other car wash owned by the same bank and he was no longer the listing agent on those properties.

I don't discount that they don't know how to value the property, but this is also a unique case. The listing agent is the owner's wife, who happens to be retired from commercial lending. Also, apparently the brokerage got paid upfront when they signed for the listing instead of solely being on commission. I do think the owner just wants out and giving him an easy path to getting away from the day to day operation might be just what he needs until other things fall into place.
 

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Make sure whatever you do for improvements starts with making sure equipment is all working properly. Have a old classmate that purchased a 5 bay with an IBA and instead of investing his money in the equipment he started hiring people to paint the wash bays and adding a stereo system to the bay and vacuum area amongst other cosmetic expenses. Meanwhile his TDS was 300, water hardness at 23 and 2 of the 5 bays had 600-700 psi for high pressure.
Another thing is learn how the equipment works and make all the repairs you can, call a service company in to make the repairs for you will eat into your profits real quick.
 

MEP001

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Make sure whatever you do for improvements starts with making sure equipment is all working properly. Have a old classmate that purchased a 5 bay with an IBA and instead of investing his money in the equipment he started hiring people to paint the wash bays and adding a stereo system to the bay and vacuum area amongst other cosmetic expenses. Meanwhile his TDS was 300, water hardness at 23 and 2 of the 5 bays had 600-700 psi for high pressure.
The old "lipstick on a pig" approach. Never works.
 

Randy

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You might want to contact the county assessor's office and see what the properties assessed value is. The property has been listed for 249 days according to Coldwell Banker https://www.coldwellbankerhomes.com/pa/arnold/0-14th-st-and-horne-blvd/pid_30756493/ the listing price started out at $159,000 and now it’s down to $130,000 on the agent’s web site. But you’re saying its $90,000 now, that’s a huge decrease. Have you contacted the real-estate agent requesting the financials, bank deposits, water bills, power bills, tax records, etc? If they can’t or won’t produce those financials then it doesn’t pass the smell test. Don't ever believe anything that a real-estate agent tells you.
 

Msaxonii

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Make sure whatever you do for improvements starts with making sure equipment is all working properly. Have a old classmate that purchased a 5 bay with an IBA and instead of investing his money in the equipment he started hiring people to paint the wash bays and adding a stereo system to the bay and vacuum area amongst other cosmetic expenses. Meanwhile his TDS was 300, water hardness at 23 and 2 of the 5 bays had 600-700 psi for high pressure.
Another thing is learn how the equipment works and make all the repairs you can, call a service company in to make the repairs for you will eat into your profits real quick.
Definitely. My wife asked me last night how long I thought it would be until seeing a profit and I had to ask her if she meant profit or being able to take money out. I told her I wouldn't expect to be comfortable with taking anything out for probably at least 3 years. I figure everything above costs would be going right back in. My two prong recovery approach would focus on revenue growth opportunities and operating expenses reductions.

I'd like a Weep Miser style system after the summer season to prepare for winter. Cryptopay looks like something that none of the places local have and think that makes it something that would allow higher capture rates, even if I just set up for one bag and vacuum and add on from there. The car wash across the bridge has SS at $2 for 4.5 minutes, but they also offer an Air Shammy system.
 

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If you only add credit card to 1 bay or vac don't get discouraged by the low sales. You will add the credit to the closest bay to the mechanical room which will be the bay that get used the most. When we first tried credit several years ago we only added it to 2 bays at some of our locations and were disappointed with the result. But it was the 2 busiest bays so when people were using quarters the bay was tied up for customer who could potentially want to use credit. Now we are adding credit to all bays as we upgrade each site and see a tremendous difference in credit usage when all bays have credit vs just a few.
 

MEP001

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I had the same problem years ago when we first added CC acceptance. We only did two bays to start, and on a lot of days we'd have a line behind the CC bays with other bays empty. Cryptopay is so affordable per bay that if you're going to bother with internet and the coordinator you might as well do all the bays.
 

Msaxonii

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Without funds to solidly invest, I'm more looking to be cycle the funds back in to improvements as fast as the bills get paid to minimize outside expenditure.

I'm not sure of timer settings now. Looking at three other self serves, I think I can go to $1.75 for 3 minutes off the bat and vacuums to $1 for the same. The successful wash I looked at is $2 for 4.5 minutes, but they also have an Air Shammy system. Oil change and light mechanical place is $1 for 2 minutes, but access in and out of this one is a lot easier than theirs. I found one other wash in the vicinity when I went to look at the distributor that set the equipment up here. It was originally the same style, but he closed off a couple bays for storage, and converted one bay to a Southern Pride automatic, maybe. Picture attached. Automatic starts at $4, no air dry, and his ss is still $1.25. None of the locations I scouted accept CC for SS.

I also think that for internet purposes, if there's not anything there, I might be able to do wifi extenders to run off my home internet. I'm not sure of this route completely, but might be a cost savings possibility.

Picture is of the distributor's automatic bay. Possible that he sold this one off to get funds to put the automatic in. He's in his 70s and has other property that has been marked in the past year, like the marina in town.
 

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MEP001

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I also think that for internet purposes, if there's not anything there, I might be able to do wifi extenders to run off my home internet. I'm not sure of this route completely, but might be a cost savings possibility.
You can always use a wireless hotspot which you can get for less than $15 a month.
 

Msaxonii

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Received financials back from realtor. Gross is running around 26k a year. Utilities were around 8k, and then jumped to 9500 for 2019. Property taxes are listed shy of 7k, but there was a major increase just passed for us so they will be going up. Supplies have been between 1k and 2200, and maintenance costs ranging from 1500 to almost 5k last year.

I still think that with marketing and improvements to lower cost and value add, the business could be turned around. I just don't see numbers looking good enough to be able to get financing.

I did find Mobile Container Sales which would let me pop up storage containers overnight. But I still want the car wash to function and I don't see that happening here without an influx of capital.

Is there a program for Extreme Car Wash Makeover or Hell's Car Wash overhaul?

Edit-- Sales revenue are completely stable over the past 3 years, between 23 and 26k, despite fluctuations in expenses. I think that this leads me to confirmation that the pricing needs to be updated for inflation. Increasing to $1.75 would be a 40% increase. Assuming all else remains the same, that would mean revenues of $36k and net of 10k a year of profits to reinvest and grow.
 
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Dan-Ark

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7K taxes on a 90,000 property seems outrageous! What is it assessed at? Is it high dollar dirt under the wash? You may be able to get it assessed lower based on your purchase price. Also debt service on 90K (or more if you try to get some improvement money) will be about 9000 or more in a year plus 7k, in taxes, and 15000 or more in utilities (also seems crazy high for the volume) then add soap, utilities and maintenance so you will need at least $31,000 in gross sales before you have a dime to improve anything.

I bought my closed down foreclosed wash for cash, now doing about the same revenue this one is doing (very small town) but my utilities run around 300 a month, my taxes are 1200 a year and i'm around 150 a month in supplies. I'm on the higher side on maintenance because of an old D&S 5000 automatic that keep running but I can pull enough out to pay the note on the second wash I bought that I cant seem to find the time to get opened back up as well as pay down the credit cards that I ran up buying all the stuff it took to get it reopened, and adding cryptopay, etc.

The only reason the guy is netting 8k is because he isnt paying any debt service. Divide your population by the number of available SS bays in the area. My experience is that if I am getting about half the business (split with older looking wash across street that was open while mine was owned by the bank and closed) I figure our town of 2500 people averages about 1.50 per month per person in local car wash spending. Your population may spend 3.00. but it will give you an idea what is reasonable to expect. You can get more. I thought I had it made since I had the only automatic in town now the wash across the street is installing an automatic bay... in a town of 2500 people. Maybe I took more than half his business. Point is, he will work to get as much back as he can and you may see the competition respond as well.

Oh while I'm writing this novel, I'll tell you that it is taking about 8 to 10 hours a week to service the wash on average. at least 4 trips a week and I wish I could get there every day. Dont forget to pay yourself for your time.
 

MEP001

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Is there a program for Extreme Car Wash Makeover or Hell's Car Wash overhaul?
I'm planning on starting a program like that, but I'll need to win the lottery first.
 

OurTown

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The good news is that at the asking price it is probably not getting sold anytime soon so there is time for plenty of negotiations.
 
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