Hello folks!
Two years ago, my financial partner and myself put a bid in to buy a 2 IBA/4 SS Bay site built in 2004 on 0.75 acres. The Owner at the time rejected the offer because it was too low (he was expecting almost 2x what we offered). There were also minimal to zero financial records available to go off of. We had done quite a bit of research and had all of the quotes in hand to fix/repair the site and bring it back to the revenue monster it used to be. Unfortunately, the current owner has let it become essentially non functional and has been limping the original IBAs (Nu Star Comets) since he took over in 2012 and bought out the old partner.
Fast forward to now!
The adjacent property is a 20 lane bowling alley with sand volley ball courts and a restaurant. This Owner has 3-4 other successful restaurants in the area and has strong name/brand recognition. He is personal friends with the current owner and is in the process of buying the site. As a entertainment type business owner, he is not particularly interested in running a car wash but wants to expand his assets and complete his lot as this property its immediately in front of his. He is also interested in future zoning changes he can accomplish for his property by owning the car wash site.
With this, we have begun discussions on structuring how to operate the car wash under his property ownership. It seems a lease approach may be the best option to allow him to maintain ownership of the property and building but allow the car wash to be operated out of it. Obviously this brings some issues with assets/future wealth with not owning the property or associated real estate.
I am struggling on where to draw the line with building/site items vs. wash specific items that become apart of the building. These would be negotiated into the lease to determine ownership/maintenance responsibilities. Things like floor heat, boilers, hot water heaters, water softeners, reverse osmosis, and roll up doors all could be argued either way (some stronger than others). Other items such as roofs, parking lots, lighting, landscaping, etc. are more property driven and easier to negotiate. The bowling alley owner has offered his full time mechanic for day to day maintenance which leads me to believe he may be open to taking on more of the building items to bring this site back to life and bring in revenue. I do not know if he is expecting or wanting revenue sharing or putting money into the car wash business himself and running it as a partner with me or letting me run it solo. He has mentioned continuing his name/branding to this site and wanting it to be successful.
Does anyone have any lease agreements they would be willing to share or input on this approach? One item mentioned to me was discussion of revenue sharing based on what portion of the responsibilities he takes on owning the property/building. Another item mentioned was negotiating year one of the lease and re-evaluating after. There are other issues with as property taxes to negotiate as well.
Two years ago, my financial partner and myself put a bid in to buy a 2 IBA/4 SS Bay site built in 2004 on 0.75 acres. The Owner at the time rejected the offer because it was too low (he was expecting almost 2x what we offered). There were also minimal to zero financial records available to go off of. We had done quite a bit of research and had all of the quotes in hand to fix/repair the site and bring it back to the revenue monster it used to be. Unfortunately, the current owner has let it become essentially non functional and has been limping the original IBAs (Nu Star Comets) since he took over in 2012 and bought out the old partner.
Fast forward to now!
The adjacent property is a 20 lane bowling alley with sand volley ball courts and a restaurant. This Owner has 3-4 other successful restaurants in the area and has strong name/brand recognition. He is personal friends with the current owner and is in the process of buying the site. As a entertainment type business owner, he is not particularly interested in running a car wash but wants to expand his assets and complete his lot as this property its immediately in front of his. He is also interested in future zoning changes he can accomplish for his property by owning the car wash site.
With this, we have begun discussions on structuring how to operate the car wash under his property ownership. It seems a lease approach may be the best option to allow him to maintain ownership of the property and building but allow the car wash to be operated out of it. Obviously this brings some issues with assets/future wealth with not owning the property or associated real estate.
I am struggling on where to draw the line with building/site items vs. wash specific items that become apart of the building. These would be negotiated into the lease to determine ownership/maintenance responsibilities. Things like floor heat, boilers, hot water heaters, water softeners, reverse osmosis, and roll up doors all could be argued either way (some stronger than others). Other items such as roofs, parking lots, lighting, landscaping, etc. are more property driven and easier to negotiate. The bowling alley owner has offered his full time mechanic for day to day maintenance which leads me to believe he may be open to taking on more of the building items to bring this site back to life and bring in revenue. I do not know if he is expecting or wanting revenue sharing or putting money into the car wash business himself and running it as a partner with me or letting me run it solo. He has mentioned continuing his name/branding to this site and wanting it to be successful.
Does anyone have any lease agreements they would be willing to share or input on this approach? One item mentioned to me was discussion of revenue sharing based on what portion of the responsibilities he takes on owning the property/building. Another item mentioned was negotiating year one of the lease and re-evaluating after. There are other issues with as property taxes to negotiate as well.
