Looking at buying an existing wash

[mngoalie]

Hello. I'm currently looking at buying an existing wash in MN. Unfortunately the owner died and the son has been running it, and the records aren't that great. I'm trying to see if there are any PCA permits or if there's a way to check and see if they have any permits filed.

Its about 35 years old and has no water reclamation. That's throwing red flags for me, but I also know it was probably grandfathered in. I just want to make sure that grandfathering would follow with a new owner.

Its a 10 bay (8 car 2 truck) location. It had an automatic, but the guy took it out afew years ago. I'm hoping to put one back into its place. 4 vacuums. High traffic area and seems to be doing really well cash wise.

Thanks

 

[Eric H]

I'm trying to see if there are any PCA permits or if there's a way to check and see if they have any permits filed.

Its about 35 years old and has no water reclamation. That's throwing red flags for me, but I also know it was probably grandfathered in. I just want to make sure that grandfathering would follow with a new owner.

I had to look up "PCA", MN's Pollution Control Agency. I'm guessing that only someone responding from MN would be able to address that concern. Here in MA we don't have an agency that would issue a permit for a carwash other than the Special Permit required by local zoning board to build and whatever code book the plumbing inspector uses.

Regarding reclaim at a SS only location, not only is it not required it would likely be VERY dangerous to do so. The risk of Legionella or Legionnaires Disease becomes a significant concern with the use of reclaimed water. A google search brings up plenty of information for you to check out: https://www.google.com/search?q=car...0l2j0i22i30.8194j0j9&sourceid=chrome&ie=UTF-8

For now I'd concentrate on the financial portion. I was recently investigating purchasing another business with a friend. There was significant deferred maintenance but the lack of a real P&L statement and a fair amount of "It makes more $$ than shown on the books" concerned me. Then the owner hit my potential partner and I with an asking price that was over double what we thought the high end price would be even with our most generous Guesstimate.

 

[mngoalie]

For now I'd concentrate on the financial portion. I was recently investigating purchasing another business with a friend. There was significant deferred maintenance but the lack of a real P&L statement and a fair amount of "It makes more $$ than shown on the books" concerned me. Then the owner hit my potential partner and I with an asking price that was over double what we thought the high end price would be even with our most generous Guesstimate.

Thanks for the info on Ss reclamation.

Yes. Financials are odd. They have crap books because it was a cash business and they skimmed off the top. Not to mention the original owner didn't keep great records. They already dropped the price $90k because their asking price was in the upper atmosphere.

It's right by a major state highway so there is extra value for the land, but their original value was crazy.

 

[Eric H]

Don't be afraid to make a reasonable offer and keep in touch with the owner. After a few other potential buyers laugh in their face they may come to realize that you have made an good faith offer. Whatever price you agree on you'll have to justify to the lending bank. No banker wants to discuss your loan application for a million dollars on a business that shows gross income of $3,000/month.

There is probably a lot of potential in the property, 10 SS bays take up a lot of real estate. Depending on traffic count, adding a IBA or 2 can significantly add to income. Converting 2 SS bays probably won't affect the SS income unless the SS is incredibly busy.

Tell us some more about the site...traffic count, condition of equipment and building, are there bill acceptors and Credit cards in the bays? what wash options are there? why only 4 vacuums? As a general rule, i was always told 2 vacuums per bay but 12 vacs would be the minimum I'd expect for a 10 bay SS.

 

[mngoalie]

Building is 30 years old at the oldest point. It started as a 2 bay setup then they added more as demand went up. They have 8 car and 2 truck bays. One automatic, but the original owner took it out acouple of years ago and converted it to storage. There were acouple of car washes at gas stations nearby but they have closed /been redeveloped into something else. The Ss equipment was upgraded recently. I'll attach pictures

No cc acceptance or bill collectors in bays. I want to add cc asap