Car Wash Cost

[kalya]

How much would it cost to build a car wash from scratch, preferably tunnel system or a mini-tunnel system . We have one acre of empty lot (300 ft by 150 ft) at a good location across major business like Walmart Ace Hardware Restaurants, about 7k to 8k per day of traffic, city with population of 12k, 400 to 500 feet of visibility, no other competition and thinking of building a tunnel system.

 

[I.B. Washincars]

I'm definitely no expert on conveyor washes, but I would say it would easily be in excess of 1 million. Although there are many factors other than traffic count, 8K is nothing. A wash in that location has no chance.

 

[rph9168]

I'm definitely no expert on conveyor washes, but I would say it would easily be in excess of 1 million. Although there are many factors other than traffic count, 8K is nothing. A wash in that location has no chance.

I.B. is right. That traffic count and population are way too low for a tunnel of even an express. I have also found that most of the types of retail stores/restaurants you mentioned are not the best for bringing in customers to a car wash. Since you own the land you might be able to build one for a million or even a little less depending on the type of building and equipment you choose but I would not recommend building one in that location. I just did some work for an owner that just bought a wash in a location much like you describe. Before it closed it was barely averaging 2,000 cars a month. The financials were a disaster. The original owner had 1.3 million in the wash. The new owner bought it for 500,000 from the bank. It was 6 years old. He has had to spend !00,000+ to upgrade it with some new equipment, building repairs and landscaping. Even with that I told him that he might have a problem making a go of it.

 

[kalya]

I.B. is right. That traffic count and population are way too low for a tunnel of even an express. I have also found that most of the types of retail stores/restaurants you mentioned are not the best for bringing in customers to a car wash. Since you own the land you might be able to build one for a million or even a little less depending on the type of building and equipment you choose but I would not recommend building one in that location. I just did some work for an owner that just bought a wash in a location much like you describe. Before it closed it was barely averaging 2,000 cars a month. The financials were a disaster. The original owner had 1.3 million in the wash. The new owner bought it for 500,000 from the bank. It was 6 years old. He has had to spend !00,000+ to upgrade it with some new equipment, building repairs and landscaping. Even with that I told him that he might have a problem making a go of it.

Then what do you guys recommend? Any other type of car wash equipment would work? There is already an automatic laser wash maybe a mile away and it stays busy all day long. It also has self serve bays but I don't consider a competition with mini tunnel system. Please advice.

 

[rph9168]

I would not recommend that you build a wash on that site.

 

[tdlconceptsllc]

Listen to the guys on here. Have you ever thought about self storage buildings something that produces more ROI with less headache you would come out a whole lot better. Risk VS reward should I say or sell the land. A tunnel is not something amateurs just jump in and do it over night. Experienced operators with 25-30 years of experience can struggle. You need 3xs the car count.

 

[robert roman]

General answer for exterior express is $700 to $850 per SF building includes expense for site work, building, F/F/E, soft cost, and real estate. So, if shell is 1,500 SF, estimated project cost would be $1.05 million (1,500 X $700).

Specific answer depends on public need for carwash. Here, total available market in defined trade area is a function of DIY segment (home, self-serve) and DIFM (conveyor, in-bay).

Public need is determined with demand/supply balance. If 40 percent wash at home and 20 percent use self-serve, 40 percent would be available to support a new wash. Whereas suitability of location is usually determined with attraction rate (i.e. 1.0 percent).

In other words, to attract more than 80 cars per day (8,000 X 0.01), the site would need to “pull” customers away from competition as well as from driveway.

Test the sanity of this.

80 CPD X 312 days X $8.50 average sale = $212,000 (rounded)

How likely is it the site can capture sales of $212K from 12,000 people of which 40 percent wash at home and 20 percent self-serve?

Another attribute of new wash is ability to support debt. Is $212K enough?

$212K X 0.5 expense / 12 months / 1.5 debt service coverage = $6,000 rounded

$6,000 based on general terms and conditions is equivalent of $900,000 amortization.

$900,000 is equivalent total project cost of $1.125 million ($900,000 / 0.8).

EBTD = ($212,000 X 0.5 expense) – ($6,000 X 12)

EBTD = $34,000

Risk reward = $34,000 / ($1.125 mil X 0.2)

Risk reward = 0.15:1

This is type of risk reward a number of self-serve developers chased before the big bust. Now, most are underwater or vacated.

I’m not saying 12,000 cannot support a conveyor because I know certain markets that do so. However, the prospect of injecting equity of a quarter million dollars or so merits more than napkin analysis.

 

[rph9168]

I have found a couple of hidden costs make it difficult to give a general estimate for building a wash. Site prep can sometimes get costly as well as permitting and paying for curb cuts or other essential items that are difficult to estimate without knowing site and area particulars. After reviewing Bob's post I think basically I would agree that the risk/reward in this case is too high. I have not seen many washes built in less than ideal situations succeed. It seems recently I find that with those I have worked with that I am trying to talk them out of building a wash rather than building one. In our area there are probably better deals on existing washes at favorable costs than building a new one.