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Looking to buy my first wash

Etowah

Should I buy?


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TheMageLives

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When they bought the place in 2006 it had to have been making money because the original loan was almost 400,000 and no bank is just going to give you money without showing an roi. I don't know if it's their mismanagement, their prices, or they're lack of wanting to reinvest money into the business and get the automatic fixed that's been broken for five years that they are only breaking even every month. But yes that place is going to take a lot of work just to make it look nice on the outside that's not counting the pump room or the automatic. On the dryer combo units in the back with the red dot matrix style screens on them you can't even read the ******** things. I'm going back out there on Saturday with my buddy who's a plumber but I'll say this I think I'm going to walk away from it between my day job and then picking that up I'd have no rest lol.
Mage
 
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Waxman

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I think you're ignoring some obvious problems that exist with this place. The first is why hasn't the current owner repaired the automatic or replaced it with a new machine?

The prices seem very low. In some markets self service charge a dollar per minute. Given the income potential of an automatic wash, It doesn't make any sense to leave a machine broken for 2+ years.

Not having financial statements as a reason to pass on a business deal. Businesses are all about the numbers and you have no idea what yours are so how could you make a proper offer on the business?
 

TheMageLives

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From everything I was told from the realtor is they just break even every month. I can't get a response out of them about why they didn't repair it or replace it. All I got was they were thinking about just removing it completely and turning it back into a self-serve Bay
 

PrecisionPyro

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I am all for a fixer upper, you make money when you buy and sweat equity is a beautiful thing! HOWEVER I would pass on this property. given their asking price, lack of books, and repairs needed. By the time you get the place back into "proper" condition, I'd believe you'd be back up into the 400K range. Offer them half the price of land, or wait for it to go up on the tax auction if you want it. ;-)
 

TheMageLives

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I am all for a fixer upper, you make money when you buy and sweat equity is a beautiful thing! HOWEVER I would pass on this property. given their asking price, lack of books, and repairs needed. By the time you get the place back into "proper" condition, I'd believe you'd be back up into the 400K range. Offer them half the price of land, or wait for it to go up on the tax auction if you want it. ;-)
Yeah I've already decided to pass on it I just hadn't made the post yet. But yeah I completely agree with you except for one part the bank would get it before the county does because there's a mortgage on it that has $210,000 left on it and 17 years. and when I talk to the realtor yesterday he said the owners will not do any kind of purchase money mortgage or owner financing because there's too much risk in it
 

eckert16

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Thoughts: $400,000 loan back in 2006, still owe about $210,000 with 17 years left, so it was a 30 year loan at about, what, say 3.5%, so monthly payments for that note is about, what $1,800 a month (just guestimating).
Current owner is 'only breaking even every month'.

IBA been down for over 5 years (zero income); that leaves income from 5 self serve bays to cover the current loan payment of $1,800...plus chemicals, plus utilities (gas, elec, water, sewage), plus insurance, plus snow plowing, plus trash removal? (obviously not assuming any equipment maintenance).

-if you were still interested in it, consider your drive time back and forth; time is money. Is there an affordable hardware store near the site, or is it an hour each way to get a part that you forgot for that day's fix. Near an IBA control box, the owner usually has a name and phone number written down for the 'distributor' that does the routine maintenance ...give em a call for a guestimate next time to get the IBA functioning normally.
 

TheMageLives

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Thoughts: $400,000 loan back in 2006, still owe about $210,000 with 17 years left, so it was a 30 year loan at about, what, say 3.5%, so monthly payments for that note is about, what $1,800 a month (just guestimating).
Current owner is 'only breaking even every month'.

IBA been down for over 5 years (zero income); that leaves income from 5 self serve bays to cover the current loan payment of $1,800...plus chemicals, plus utilities (gas, elec, water, sewage), plus insurance, plus snow plowing, plus trash removal? (obviously not assuming any equipment maintenance).

-if you were still interested in it, consider your drive time back and forth; time is money. Is there an affordable hardware store near the site, or is it an hour each way to get a part that you forgot for that day's fix. Near an IBA control box, the owner usually has a name and phone number written down for the 'distributor' that does the routine maintenance ...give em a call for a guestimate next time to get the IBA functioning normally.
I live an hour away (49m miles) part freeway part country roads to get there. The closest Granger industrial supply is in Columbus by me there is one hardware store in that town but it's a small rinky dink little thing. The closest home Depot or Lowe's is 22 minutes away in Mansfield Ohio. I didn't see a phone number any where near the IBA but I also wasn't looking for one, It could have been on the inside of the door with the green inspection stickers.

Also to throw it out there I'm 33 be a great opportunity but with my day job that pays my bills I work Monday through Saturday 5:00 a.m. to 1:00 p.m. making deliveries I just don't see when I'd be able to get up there and fix the thing other than getting there around 2:30 3:00 every day to do work which I wouldn't be complaining about because it'd give me something to do other than playing video games and listening to the girlfriend bitch all day LOL over stupid stuff you know how it goes.

I see potential in the place but it's going to take a lot of money to get to where it needs to be. Because the building next to me is a tanning salon which is owned by the realtor and his wife and on the other side of that is 13 acres of open land which the realtor said that the rumor is a Kroger is being built there that town doesn't even have a grocery store other than a save a lot. Which would bring more traffic by than what's already there if a Kroger does go in. and that's another thought well if a Kroger goes in there goes your land values they could go up and it would be prime real estate so I don't know I'm I know I said in an earlier post I decided on passing but I honestly I am up in the air about it I'm leaning more towards the forget it and run as far as I can as fast as I can, but the potential is what's keeping me pulled in and thinking about it.
 

Car_Wash_Guy

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Offer land value - demo costs of the building and you'll have a safe offer. They won't like it but they need to get their head into the place that their wash isn't worth what they paid for it nor what they're asking.

I'd also budget installing an IBA in your business plan.
 

I.B. Washincars

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I can see why you are struggling with this. There is a Burger King directly across the street, and a Pizza Hut and Tim Horton's within sight. I don't think they built those places on a whim. One thing I would definitely change if I bought the place, would be to make the auto entry on the street side. I see no reason that this place should have been rear entry. I know some people make it work, but it's not ideal. I'm surprised this town just has the one wash. I came from a similar size town. We had 3 SS washes, 6 IBAs, and an express. We also had another IBA at one c-store and 4 SS bays at another, but they were torn down within the last couple of years...couldn't figure out why they couldn't make money.
 
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TheMageLives

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I can see why you are struggling with this. There is a Burger King directly across the street, and a Pizza Hut and Tim Horton's within sight. I don't think they built those places on a whim. One thing I would definitely change if I bought the place, would be to make the auto entry on the street side. I see no reason that this place should have been rear entry. I know some people make it work, but it's not ideal. I'm surprised this town just has the one wash. I came from a similar size town. We had 3 SS washes, 6 IBAs, and an express. We also had another IBA at one c-store and 4 SS bays at another, but they were torn down within the last couple of years...couldn't figure out why they couldn't make money.
There are 2 washes in the town. The one I'm looking at buying 5 SS bays with a 6th IBA. And a new wash built 8 years ago with 4 bay aes and 2 iba. I reached out to Mark VII to see when the last time they serviced the unit. I completely agree the entrances should be street side. Less change for the unit to be broken into. The pay unit that's in the back was replaced 5 years ago with insurance money when it was broken into then the iba broke down a week or 2 afterwards and they just never fixed it. I meet with the realtor and one of the owners Saturday and I need to come up with a list of questions to ask for example why didn't you fix the IBA? What was the quoted price to fix etc. But with the IBA just sitting there for 5 years doing nothing I know and you know it's going to need alot of work to get it running. I'm new to the industry so idk if an old mark Vii aquajet installed in 1999 is even worth fixing, from the sounds of recent posts I'd say no scrap and replace.
 

I.B. Washincars

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an old mark Vii aquajet installed in 1999 is even worth fixing, from the sounds of recent posts I'd say no scrap and replace.
I agree. That series of Mark VII ended in 2002, so some parts are hard to come by. I actually replaced three of them back in 2016. They were good in their day, but their day has past. I misread an earlier post and thought it was built in 2006. Myself, I wouldn't be afraid to install a used machine, which can usually be bought for pennies on the dollar. I don't know if I would advise a greenhorn to do that though. How far is the closest support, and what brand do they sell?
 

eckert16

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Email or call Eric at the city to confirm any grocery store permits info online at ci.galion.oh.us/216/Building-Permit ... of course, don't tip yourself into a permit rabbit hole with a carwash rehab question... keep it simple, ...I heard a rumor, is there anything to it, any preliminary filings, where, thanks?
 

TheMageLives

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I agree. That series of Mark VII ended in 2002, so some parts are hard to come by. I actually replaced three of them back in 2016. They were good in their day, but their day has past. I misread an earlier post and thought it was built in 2006. Myself, I wouldn't be afraid to install a used machine, which can usually be bought for pennies on the dollar. I don't know if I would advise a greenhorn to do that though. How far is the closest support, and what brand do they sell?
I'm not sure who has the closest support, but I will look into it when I get home. I don't know if I said it in an earlier post but that car wash was actually built in the 60s
 

TheMageLives

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I'm not sure who has the closest support, but I will look into it when I get home. I don't know if I said it in an earlier post but that car wash was actually built in the 60s
Looks like hydrospray is based out of Columbus Ohio
 

TheMageLives

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Email or call Eric at the city to confirm any grocery store permits info online at ci.galion.oh.us/216/Building-Permit ... of course, don't tip yourself into a permit rabbit hole with a carwash rehab question... keep it simple, ...I heard a rumor, is there anything to it, any preliminary filings, where, thanks?
He said not that he's aware of LOL.
 

I.B. Washincars

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Petit is based out of Norton, about the same distance away as Hydrospray. Both are mfrs. which may or may not mean hands on service and support. I'm just spitballing here, but if I bought a used machine, I would want a distributor for that brand available. HydroSpray is a pretty small player, and Petit seems to be an up and coming force, but neither are very big right now, so used machines may not be plentiful.
 
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