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Looking to purchase Self Service Car Wash

Scheslock

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Some quick background:
No experience in this specific industry but am a real estate investor. I'm also somewhat handy so the small daily maintenance doesn't scare me and willing to pay technicians for big ticket items.
Deal is for 1 acre of land (all equipment conveys), car wash is on .39 of it. Remaining .61 is vacant land which I already have a plan for. *The plan for the vacant .61 acre is the value play for this entire deal, so just not trying to get ripped off with the car wash.
Asking $200K total, Car wash is 4 bay, 2 Vacuum bays and the business has been closed for 8 years.
Property is 15 minutes from home and have the time to put in 2-3 hrs of daily maintenance.
Owner retired (70s) lives an hr away and agent said "was tired of driving an hour to pick up quarters every other day".
Equipment looks in good shape (pics below, owner still comes to cut the lawn himself and never turned off utilities) and owner has agreed to run the machines with machine technicians present to asses any necessary repairs, which will be reflected in my offer.
Smallish town (pop. 8,000) but only car wash of any kind in 3-5 mile radius, at the busiest intersection in town and a brand new 400 unit subdivision is going up right across the street next year.
Says this was build in 1991.

My question is how do you valuate this business. The seller is listing it for sale "At a 10 Cap", selling price is $200K. Total tax assessment is $120K (Land $54K, Improvements $66K). When I asked for the last financials he provided and excel spreadsheet which claimed to be making $4700/mo gross. To me something doesn't add up if he was making only $20K NOI (10 cap at $200K ask) wink wink nudge nudge. I'm definitely not paying $200K, but wondering what some people with experience running these businesses would consider offering. Right now in reality it's just a closed car wash business on an acre of land. I've seen 3X gross income as a rule of thumb for an operating business. Currently I'm ball parking $30-40K of rehab which includes installation of new Cryptopay card systems and $10K for new signage.



Thanks so much for any input, it's greatly appreciated and helpful. Let me know if you need any more info or pics. Everyone have a great and productive day.
 

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MEP001

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Losito

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Hey, i am a real estate investor too. I bought my 1st wash in 2018. Looking at the pics, I would buy that place with the intention of replace everything. Trying to salvage and repair old equipment is expensive and you will continue to experience problems as you go. What you are buying is a building zoned to have a car wash. You should only pay for the real estate. I believe you are under estimating your rehab cost. I believe your rehab cost is around 100-120k. You need to clean up that building and make it pop! You need more vacuums if you can fit them. Bill changer, signs, lights, wall paneling, ext. it adds up fast! I have two self serves and they avg about 1200-1500 a month. I bought the Mark 7 self serve system. I love it, and so far no issues. Good luck!
 

Losito

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Each bay does about 1200 -1500 each month. In this location I also have a touch free and an express tunnel. Vacuums are free, most of the income on this location is from the tunnel. The self serve are less than 5% of the income in this location. These are my only two self serve, so far it’s been ok. I do plan to buy a couple more sites. I attached a pic of the wash. I bought and rehab it this year. D5180AF0-97CF-48A3-A284-332D1F017DD2.jpeg 9CD98D29-2039-4C8F-A0B8-B7F7E31D54A9.jpeg
 

eckert16

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Great initiative...recommend you do a bit more basic research...US Census estimates that "town's" 2018 population at 5,180... the plus are the new civic buildings built on the Southern road and the housing development... you've got the gas station in front, and the exxon across the street, of those, beware that exxon could do an express wash.... negotiate listing price down based on non use.. ... recommend land value only as it's not producing at this point and you have other plans for the majority of the land anyway, use that negotiation strategy to your advantage... if/when you decide to get the carwash functioning, then that could be your icing, but it's not your main interest in the land .. It's not exactly on the west-east road so consider how you can get that traffic to find it...the existing sign is quite small off that north road...contact your state dept of transportation to find your traffic counts for the two roads .. (btw: washing oysters in the bays may mean your drainage system is shot)... also, if your state has an active car wash association, they may have the site analysis forms to help you make a decision.
 

mac

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Building and equipment look to be in good shape. Just being closed for that time will mean spending many hours getting things working right. If the vacant land has good value to you that helps a lot. It will take several hours a day to get things running smoothly. Suggest you get a good video system that you can view remotely. Good luck.
 
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