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buying a closed car wash

tiptopcw

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the car wash (full service )closest to me closed down this past march. it is not a busy location and the owner call me once. the price he was asking for at the time was 350,000. 4000 in rent, 7 employee, 15 year balanger machine. the place is pretty run down and has a very small exit. 3 cars on the side walk. the owner told me he was making 150k per year. i did not buy his story or his number. i turn down the offer. that was two years ago. last week, my soap guy gave me a call. he told me if i was interested in that car wash again. only this time the offer is much lower. the new owner wanted to operate a hand wash in a low income area. so he took down all the machines and the only thing left now is a old rain x arch, rinse arch and the blower. the guy change his mind a month into the renovation wants to get rid of the place. his asking price is 150k, but my soap guy told him it was too high as he have a very short lease, no machine and no business. in the end he lower the price to 60k for himself and 5 for the soap guy.

in my own wash, i am updating my equipment ( 1 side to side mitter and a unimac) and i still have in storage two mitters and 4 lower detail, a old hurricane blower. a van high brush. only thing i am missing is the computer.
long story short, should i take over this location. any advice will be appreciated. 0
 

robert roman

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Value of business-only meaning a business that doesn’t own its premises is a function of cash. If the business isn’t cash flow positive, it’s worth zero. Should you take over the remaining rent obligation (lease) and operate the site as a hand wash is another matter.
 

tiptopcw

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currently the business revenue is zero as the operator can not decide between hand wash or machine wash. atm the tunnel only contains the blower and the rinse arch. everything else is gutted. luckily the soap room and the electrical room are still in tact. i got quoted around 30k cost to bring the revive the wash. and 65k for key money.
adding up some small renovation and such. i think i can have the wash ready for 120k. the landlord agree to give a 5 year lease extension for 10k if i dont sell the place within 10 years.
 

rph9168

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Run, don't walk, away. It is a loser and not worth the time and expense to attempt to turn it around. Concentrate on improving your operation. Let someone else waste their time and money.
 

tiptopcw

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17 dollar average, the last year this wash was in operation in did 23k car. i normally does not mess with a place like this, however, this one is very close to me(30 blocks). i do not expect to make money from this place. if i can make sure this place survives on its own and does not affect the business of my main place. it is a plus for me. my only fear is if somebody comes and takes business away from my main location.
 

rph9168

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If competition is your fear, buy it and knock it down and sell off the land. With the numbers you gave I doubt if anyone would want to invest heavily in this site to make it competitive with your wash. Sounds like you have already decided what you want to do so I hope it works out for you.
 

MEP001

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I agree, if you don't have enough business that you can be your own competition, buy it and repurpose it or tear it down.
 

robert roman

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17 dollar average, the last year this wash was in operation in did 23k car. i normally does not mess with a place like this, however, this one is very close to me(30 blocks). i do not expect to make money from this place. if i can make sure this place survives on its own and does not affect the business of my main place. it is a plus for me. my only fear is if somebody comes and takes business away from my main location.
People usually collect things like cars, comic books, memorabilia, etc., but not commercial carwashes.

If it’s not making money as full-service, does property have higher and better use as another type of carwash operation or another purpose all together?

Also, full-service anything is not a good business model for low income area.

Have you considered express format. People are taking dogs and turning them into 100,000 plus sites.
 

OurTown

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So the owner milked it dry, then found a sucker to buy it. The new owner guts it and now says "no this isn't going to work" and wants out already? This place has no land, no business, and no equipment. Red flag. You could invest that $120K into your wash to keep the potential competition away.
 

tiptopcw

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basically this place is one of the worst location you can get for a car wash, horrible location, very small exit, the owner of the next build build a wall between the two properties plus low income area. my partner and i already decided that it is not worth the money, the previous owner did not have to pay for two expanse. property tax and water bill. that is another 30 grand for the year.
 
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