purchasing advice

[marksman69]

i know this is rather vague but was wondering if anything here stands out. I am looking at purchasing a coin self serve car wash. it is 3 bays two low and one high bay. it is an older property probably built in the 80's. it is a bank repo and was shut down a winterized over a year ago. the location is a medium traffic area and competition in a few miles away. all equipment appears to be intact and vandalism free. cosmetically all it needs is a good cleaning and some weeding done. there is no water reclaimation system as far as i could see. there are two gas boilers one for water and one for slab heat. both are older. no financial statements are available and bank says it sells as is. a friend knows a previous owner and he told me it made $2000 per month on average. bank asking $150,000. anything stand out here as a red flag? what about no water reclaimation? is this a big concern? thanks to all who offer their advice.

 

[Red Baron]

Price is really high unless the land is valuable. A "decent" older car wash that is up and running should bring around 2.5-3 x gross, or $60,000 - $72,000. The fact that it's shut down, all things equal, I wouldn't look at it for more than around $45,000.

 

[marksman69]

Price is really high unless the land is valuable. A "decent" older car wash that is up and running should bring around 2.5-3 x gross, or $60,000 - $72,000. The fact that it's shut down, all things equal, I wouldn't look at it for more than around $45,000.

it does have a seperate building that has 3000 sq. ft. of space that was an auto excessory store and detail shop. i am sure that has income value but the location will limit who would rent it. and i dont plan on operating a detail shop myself. i could rent it out. space goes for around $5-6 sq. ft. around here. i wasnt banking on that aspect though.

 

[Waxman]

3000 square feet is a big detail shop.

If you don't plan to operate the detail shop and you are thinking you'll rent/lease it, I think you have some challenges ahead.

You need to perform due diligence here. Take your time and be thorough. A foreclosed and currently closed carwash is a project even many experienced operators might shy away from. Where you see potential, experienced operators may see all the reasons it failed as well as all the items that need refurbishing.

I doubt it's a matter of cleaning and weeding the property to begin making $ with this wash. Sorry to put water in your gas tank.

 

[marksman69]

well i wanted an objective view and good advice so thank you. the bank has had it up for sale for a year. it was closed and forclosed upon after a nasty divorce that the wife ended up with it. so i kinda know why it closed. getting the equipment up and running and the cost of that along with other unforseen things has me concerned. that an heating water and slabs in pennsylvania in the winter scares me.

 

[MEP001]

Not even looking at whether it's a good deal or not, or if all the equipment is in good working condition or not, the fact that it's been closed for a year will be a challenge. You won't be able to just open it again and expect people to start using it. You'll either have two to three years for it to build itself back to where it was (if that's even possible) or you'll have to spend a great deal of time and money getting people to know that it's open and working. If you're completely green to the car wash industry, you're looking at a long, expensive battle.

I also agree that $150,000 is probably too much. Price some bare land in the area and see what it's worth.

 

[Greg Pack]

Just get a girlfriend or two. It'll be a lot more fun, and probably cheaper in the end.

Seriously, I would pay no more than the value of raw land, or the value of the rental space. Then you can open the car wash. If it succeeds , consider the income icing on the cake. If it doesn't, you haven't lost out much. I like the idea of a sub 50K offer, too.

 

[PaulLovesJamie]

I think the bank is fishing for a sucker, but it might be worth a bit more than that. Without more info I'm of the same mind as the other guys - value of the land.

 

[Kevin James]

I don?t see how these naysayer?s can accurately say that it?s a good deal or not. Do they know the location of this car wash? Do they know the real estate market for that particular area that this car wash is located? I doubt if they do. If you were to supply a little more information, location of the car wash, city state, physical address, how much property is there, pictures are always nice to look at. What does the county say the property is worth? Then maybe someone could give you a little better answer. $150K wouldn?t buy you much in our area.

 

[mac]

Good points Kevin, it's hard to be an accurate fortune teller. A little more info would be good. I think though that a lot of the negative responses are from people who have opened a closed wash. I've done this a couple of times, and if I were mew to the business, it would have been a nightmare. Expect almost everything to need attention.

 

[Greg Pack]

Well Kevin &Mac, I agree that the OP has given very limited information. Pictures would be helpful. But a three bay that supposedly grossed 2K per month when times were good and now it's been shut down over a year? How do you even operate floor heat in the winter at those revenues?

If it were a steal it would have been sold by now.

I stand by my original assertion that two girlfriends are a better idea.

 

[Red Baron]

As much as anything else that drives my opinion that $150,000 is way too high, is the economy. It's a buyer's market and there are enough good deals out there to pass by the marginal ones. As for the value of the land, are you trying to invest in land, or are you trying to buy a car wash? I wouldn't buy a car wash just because I can get good money for the land later. If the numbers don't work for a car wash, I wouldn't buy it any where near $150k.

 

[marksman69]

thanks to everyone for their opinions. The land is worth probably $45,000. The building would be somewhat limited in who would rent it because it is not a real high traffic area. A mechanic or specialty shop would be the target. And to top it off it is in a flood area that sees water every 20-30 years or so. all the car wash equipment is up on a catwalk but the retial building is lower. you all have pretty much stuck the reality of the situation to me. I am still evaluating it but i think this is going to be a passer.

 

[bigleo48]

Geeze Marksman69...anything else your not telling us. 1st you don't mention a 3000sq/ft retail/garage building and then that it's on a flood plain. Those are very important issues that need to be divulge if you are expecting a good answer.

Big

 

[marksman69]

just found out about the flooding. Bank doesnt exactly have much information. Talked to people who live nearby to find that out. Remember I havent owned the property for years, i am researching it and the investment potential. and the car wash aspect is investment potential. My reason for posting was to determine how much potential was there and the risk involved.

 

[mac]

After rereading the original post, I have to agree with CFCW now. For a new investor this would eat up way more time than it's worth. Maybe propose leasing it from the bank, or operating it for a fee so the bank can get a decent price? Still mulling over the two girlfriend idea also. Reminds me of a song that Groucho sang: "I'de rather have two girls of 21 each, than one girl of 42..."