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Help evaluating potential purchase.

Joswhaha

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Hello, I am hoping to get into the car wash business and would love if someone can help me figure out if this property is worth looking further into. I am located in Southwest Oklahoma, population around 100,000.


This wash was build in 1999. 6 SS bays, 1 in bay automatic that hasn’t been upgraded since it was built. 6 vacuum bays. Currently it is coin-only. The seller says he does not have income or expense information Available. It is currently listed with a brokerage and priced at $425,000.

The property seems to have good traffic but in need of a new IBA and has deferred maintenance on pretty much all the equipment.

If any has any thoughts on the property or what information I should be looking for I would appreciate it.
 

kdersch

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I'm in the same boat with a car wash slightly newer (2004) with 4 SS and 2 IBA (touchless) where nothing have been updated since it opened. Seller's broker ball parked 400-500k. I have been attempting to either get any supporting financials from them or lower the price to about half of what they are asking.
 

Joswhaha

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Bullcrap. Ask for the last 3 years of tax returns then. You may have to sign a NDA but if they can't verify basic accounting numbers you're taking a HUGE gamble at any price.
Thank you for the assistance. It sounded like he didnt show any income on his taxes from the property but I can ask. Hopefully, he can put together Income and Expense so I can have an idea if this is a deal I can make work.
 

Joswhaha

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I'm in the same boat with a car wash slightly newer (2004) with 4 SS and 2 IBA (touchless) where nothing have been updated since it opened. Seller's broker ball parked 400-500k. I have been attempting to either get any supporting financials from them or lower the price to about half of what they are asking.
This land and building is probably worth 250k without the car wash, so I may offer that and see if he comes up with any documentation to support his price.
 

washnshine

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This land and building is probably worth 250k without the car wash, so I may offer that and see if he comes up with any documentation to support his price.
This was built at a time when any distributor or salesman would put one of these up anywhere for anyone who would get financed for a wash. Owners thought it was a “set it and forget it” business and now we have what you are experiencing. Probably a place that never turned a dime and now has outdated, obsolete equipment that is in need of repair and maintenance just to function. Give him land value and then treat it like you are building it from the ground up- because you will be.
 

Joswhaha

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This was built at a time when any distributor or salesman would put one of these up anywhere for anyone who would get financed for a wash. Owners thought it was a “set it and forget it” business and now we have what you are experiencing. Probably a place that never turned a dime and now has outdated, obsolete equipment that is in need of repair and maintenance just to function. Give him land value and then treat it like you are building it from the ground up- because you will be.
Thank you for the advice. All the equipment works now but the automatic doesn't perform well (Water Wizard) The SS is Jim Coleman doors with the 9 button keypad. Any estimates on what it may take to update a place like this? 150k+ ? and Where would I get estimated revenue for a wash in this location? 13,000 Daily Car Count, 35mph Street.
 

mngoalie

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Thank you for the assistance. It sounded like he didnt show any income on his taxes from the property but I can ask. Hopefully, he can put together Income and Expense so I can have an idea if this is a deal I can make work.
Thats an issue for many deals.. I bought one and they had no financials. They didn't even have a checking account for the business. The taxes were abysmal. I pulled water and utility records for 3 years and was able to get an approximate number of washes he had done.

These guys looking to sell don't seem to grasp you need good information to get financing. Guy is doing a contract for deed with me after it sat on the market as no-one could get financing with his non-existent record keeping
 

Joswhaha

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Thats an issue for many deals.. I bought one and they had no financials. They didn't even have a checking account for the business. The taxes were abysmal. I pulled water and utility records for 3 years and was able to get an approximate number of washes he had done.

These guys looking to sell don't seem to grasp you need good information to get financing. Guy is doing a contract for deed with me after it sat on the market as no-one could get financing with his non-existent record keeping
Yeah, this guy seemed suprised I even asked for financials. I realize maybe he is'nt making much but at least I could get an idea about the potential if everything was in top condition. Were you able to estimate revenue pretty accurate before your purchase or did you just go for it and hope for the best?
 

mngoalie

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Yeah, this guy seemed suprised I even asked for financials. I realize maybe he is'nt making much but at least I could get an idea about the potential if everything was in top condition. Were you able to estimate revenue pretty accurate before your purchase or did you just go for it and hope for the best?
They provided me with a pro forma estimate of their revenue for 2020. I pulled water records, figure out how much water runs in a wash cycle, and reversed out the number of washes from that. So far, its been fairly accurate. I was able to get a ballpark number, then went for it.

So many run the washes as a personal piggy bank and keep no records. It always bites them when they go to sell.
 

Randy

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I have to agree that with no tax records or any income records the place is basically only worth land value and a lot of operators don’t understand this.

There are 3 car washes for sale in my area. All 3 of them are not in the best condition.

#1 is a 4 bay Self-Serve with a Wash World automatic, it’s listed for sale for $1.3 million

#2 is a 5 bay Self-Serve in a pretty rough shape, but it is very busy, it’s listed for sale for $1.1 million

#3 is a 6 bay Self-Serve it’s just so-so. It’s kind of a Homeless hangout. it’s listed for sale for $950.00

A dump 5 bay just sold here for $499,000. It’s currently got a fence around it with a banner that says “Remodeled car wash coming soon under new management” It was a homeless hangout at night, I wonder how that’s going to work out since the new owners are 75 miles away.
 

Rfreeman

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Thank you for the advice. All the equipment works now but the automatic doesn't perform well (Water Wizard) The SS is Jim Coleman doors with the 9 button keypad. Any estimates on what it may take to update a place like this? 150k+ ? and Where would I get estimated revenue for a wash in this location? 13,000 Daily Car Count, 35mph Street.

For $150K are you talking everything or just the self-serve side? If its Jim Coleman equipment you should be fine unless he beat it to hell I would rebuild it all and make sure its working properly, hell it would be a lot cheaper. It sounds like it is all Coleman equipment with the 9 button key pad in the bays. Personally, I hate those and find the customers get confused. I would switch to a rotary dial or Ginasan push button doors.

The auto would recommend you go with a new one if the current unit isn't worth fixing but good chemicals and chemistry goes a long way and again would be a lot cheaper.

Lastly, as far as revenue is this location what change machine does he have? Maybe it has a counter and you can get a picture of the counter and come back and take another one in a week to get an idea of revenue? Also how does traffic at the wash look? Is it busy when you randomly drop by or are all the bays dry all the time? Scope the place out and just watch it to get a feel for it.
 

Joswhaha

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For $150K are you talking everything or just the self-serve side? If its Jim Coleman equipment you should be fine unless he beat it to hell I would rebuild it all and make sure its working properly, hell it would be a lot cheaper. It sounds like it is all Coleman equipment with the 9 button key pad in the bays. Personally, I hate those and find the customers get confused. I would switch to a rotary dial or Ginasan push button doors.

The auto would recommend you go with a new one if the current unit isn't worth fixing but good chemicals and chemistry goes a long way and again would be a lot cheaper.

Lastly, as far as revenue is this location what change machine does he have? Maybe it has a counter and you can get a picture of the counter and come back and take another one in a week to get an idea of revenue? Also how does traffic at the wash look? Is it busy when you randomly drop by or are all the bays dry all the time? Scope the place out and just watch it to get a feel for it.
I was thinking I could get a New IBA and do some rebuilding on the other equipment but 150k is just a wild guess with limited experience. Also, I do mechanical work and think I could repair most issues that come up with the equipment.

This is great feedback and information. I have been randomly dropping by just to see how busy it is and I do a little test of the equipment each time. I’m going to check the change machine for a counter, great idea.
So far the SS bays seem busy but the automatic does not seem to have much traffic. Tomorrow is going to be a nice Saturday in Oklahoma and I am going to do some recon.

The next question is what is actually good for a nice Saturday?
 

washnshine

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I was thinking I could get a New IBA and do some rebuilding on the other equipment but 150k is just a wild guess with limited experience. Also, I do mechanical work and think I could repair most issues that come up with the equipment.

This is great feedback and information. I have been randomly dropping by just to see how busy it is and I do a little test of the equipment each time. I’m going to check the change machine for a counter, great idea.
So far the SS bays seem busy but the automatic does not seem to have much traffic. Tomorrow is going to be a nice Saturday in Oklahoma and I am going to do some recon.

The next question is what is actually good for a nice Saturday?
$150k should be ballpark for most new IBA’s - give or take.
 

Tom Thumb

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Thank you for the advice. All the equipment works now but the automatic doesn't perform well (Water Wizard) The SS is Jim Coleman doors with the 9 button keypad. Any estimates on what it may take to update a place like this? 150k+ ? and Where would I get estimated revenue for a wash in this location? 13,000 Daily Car Count, 35mph Street.
The Water Wizard are really good machine they do require maintenace but will last a long time and perform good with good chemicals.You might consider putting a little money in it and use the rest to get all systems going and make a dollar.
That will allow you the time to have a better understanding on the car washing business. Just an suggestion
 

Joswhaha

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The Water Wizard are really good machine they do require maintenace but will last a long time and perform good with good chemicals.You might consider putting a little money in it and use the rest to get all systems going and make a dollar.
That will allow you the time to have a better understanding on the car washing business. Just an suggestion
Thank you for the information. I am still figuring out what potential this wash has and if It can be profitable.
 

Joswhaha

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Recon Report!
I have been going by the wash frequently during the week and today I was able to go by about every hour from 9am-5pm. From what I could tell today about 60-70 cars use the SS bays and maybe 15-20 cars run through the Auto but it was hard to really tell on the auto.

Traffic at the site was probably 30% higher than during the week. I don’t know if that is normal or not but I thought it would be significantly more.
 

GoBuckeyes

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Thank you for the assistance. It sounded like he didnt show any income on his taxes from the property but I can ask. Hopefully, he can put together Income and Expense so I can have an idea if this is a deal I can make work.
I could make up some Income and expense reports for you. Do you want a busy wash or a slow wash? 😆


Go buy a Wzye outdoor camera or some other brand that can take time lapse video and record the automatic covertly.
 
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