I'm very close to locking down a property in a nice area in Chicago on a main street that see's 20-30k cars per day. The lot is only $399k (been on the market for a while can probably get it cheaper maybe 370k) I was going to go with a 2 Bay Touchless system. The lot is only big enough for 2 Touchless bays and nothing more. My estimated amount ALL IN is $1 million (sound right?) I already talked to WashWorld and the distributor and I think its pretty accurate . At a 15 year 6% Loan I would need to see 38 cars per day to break even. We have carwashes within a few miles of there but nothing within 1 mile. With the amount of traffic that would pass by my place daily I figure 38 cars would be easy! Agree? I will also be going with a firehouse theme car wash because I'm also a Chicago Fire Fighter and live in a very heavily Fire Fighter/Police area. I figure it will give me street credit right away. Any other thoughts? I was going to do a $10 dollar wash looking at a net profit of $7.00. Includes (Gas, Electric, Water, Soap, Repair, Claims) Any help is greatly appreciated! Thanks so much!
First Purchase - Are My Numbers Correct?
- Thread starter Tjmcnich
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tdlconceptsllc
Well-known member
I like the theme and the homework on land and washworld would be a very wise choice so you can't blame the equipment for failure your on a right step. The only thing is for 38 car per day is super low for a double site. 38 cars a day per bay would be what you need maybe more. Payment on a 1mil loan would be what 13K a month after all expensises are paid to pay the bank. Your car count is awsome. Make sure you can easily get in & out of the site is a major key. Have you approached any SS sites locally about buying a current site before building new and just put a washworld in it. Good Luck. Theres a lot of variables to consider. Will the town allow a new wash to be built & meet setbacks and all. Reclaim system installed also might be a requirement. 1 mill starts to seem real cheap. Concrete is expensive also then you have to get power and water too
tdlconceptsllc
Well-known member
1 million
Land 350,000
2 washworlds 150,000 each = 300,000
Signage ?
Paystations ?
Concrete?
Permits?
Brickwork for building?
Power, water ?
I think 1Million sounds to cheap even down in the south I know up north is way more expensive
Land 350,000
2 washworlds 150,000 each = 300,000
Signage ?
Paystations ?
Concrete?
Permits?
Brickwork for building?
Power, water ?
I think 1Million sounds to cheap even down in the south I know up north is way more expensive
I don’t think you can build it for a Million in Chicagoland. By the time you pay all your fee’s, permits, equipment, ground work, concrete etc. you’re going to be well over a Million. The last project we bid on came in at a little over 1.5 Million and they owned the land free and clear. Contact the city to see what it’ll cost you for the necessary permits, water and sewer tap fee’s etc.
Thank you guys very much for the information.
Darn! Maybe that is low huh. Washworld distributor quoted me 200k per bay. The construction of the car wash would be done by "New Horizons Car Wash" at a cost of 125k - 150k. I have no idea about the cost of permits and sewer though.
Land: 370k
Car Wash Housing: 140k (includes delivery, install & engineering) per New Horizons quote (They make Glass Car Washes)
Guts of the Car Wash: 200k each (400k total) per Washworld Distributor
Asphalt: 50k (total guess)
Lights/Signs: 50k (total guess)
Permits: 5k (total guess) a house permit in Chicago cost 2k so I just did 2.5x
These ball park numbers about right? $1,150,000
at a 15y 1M Loan @ 6% interest - MONTHLY PAYMENTS ARE $8,500
The monthly break even on $10 wash with $7 profit I would need to wash 1202 cars per month or (39 cars per day)
is $3.00 going to (Electric, Gas, Water, Soap, Claims, Credit Card Fee's, Prevent Maintenance) sound right?
Am I missing other factors?
Thanks
Darn! Maybe that is low huh. Washworld distributor quoted me 200k per bay. The construction of the car wash would be done by "New Horizons Car Wash" at a cost of 125k - 150k. I have no idea about the cost of permits and sewer though.
Land: 370k
Car Wash Housing: 140k (includes delivery, install & engineering) per New Horizons quote (They make Glass Car Washes)
Guts of the Car Wash: 200k each (400k total) per Washworld Distributor
Asphalt: 50k (total guess)
Lights/Signs: 50k (total guess)
Permits: 5k (total guess) a house permit in Chicago cost 2k so I just did 2.5x
These ball park numbers about right? $1,150,000
at a 15y 1M Loan @ 6% interest - MONTHLY PAYMENTS ARE $8,500
The monthly break even on $10 wash with $7 profit I would need to wash 1202 cars per month or (39 cars per day)
is $3.00 going to (Electric, Gas, Water, Soap, Claims, Credit Card Fee's, Prevent Maintenance) sound right?
Am I missing other factors?
Thanks
Last edited:
robert roman
Bob Roman
There is lot of information missing to make a sanity test starting with equipment and property requirements.
You said property will only fit a dual in-bay. This implies property would have to be at least 15,000 SF and 1,600 SF building.
All-in for suitable building in Chicago (union labor) is about $300 per SF or $480,000.
Pre-engineered, custom modular building is about $150/SF (delivered and installed).
However, this doesn’t include site work, permits, outfitting (electrical, mechanical or plumbing work), architectural/civil or general contractor and overhead.
Without more pencil, $1.5 million sounds more like it. So, assume amortization is $10,000 per month.
$10,000 X 1.5 debt service ratio = $15,000 / $10 average revenue = 1,500 cars per month or 18,000 a year or about 58 cars a day to make this worthwhile in terms of risk.
So, I would say the principal question is how confident are you that this site location would produce 36,000 cars or more per year.
You said property will only fit a dual in-bay. This implies property would have to be at least 15,000 SF and 1,600 SF building.
All-in for suitable building in Chicago (union labor) is about $300 per SF or $480,000.
Pre-engineered, custom modular building is about $150/SF (delivered and installed).
However, this doesn’t include site work, permits, outfitting (electrical, mechanical or plumbing work), architectural/civil or general contractor and overhead.
Without more pencil, $1.5 million sounds more like it. So, assume amortization is $10,000 per month.
$10,000 X 1.5 debt service ratio = $15,000 / $10 average revenue = 1,500 cars per month or 18,000 a year or about 58 cars a day to make this worthwhile in terms of risk.
So, I would say the principal question is how confident are you that this site location would produce 36,000 cars or more per year.
Roz
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Love a good business problem and your methodical approach however I wonder how you came up with the $3/cost/wash? At 39 cars per day and $3 cost you are saying that total variable costs per year will be $42K or $3.5K per month which seems a bit low for a big city location. A plumber can cost $500/visit without much being done.
You probably will want someone (even part-time) to help to keep the place clean and running smoothly unless you plan to be there 100% of the time. When I did my analysis for a recent purchase I broke out my fixed and variable costs so I know the nut I need to cover each month (loan cost, property taxes, basic electricity and water with little use, insurance, security cameras & monitoring, promotion, misc) in the event that I get zero business (due to weather, equipment failure, snow, or some other unforeseen issue), then you understand the true risk and know if it is acceptable. Plan for a 10% variance in building costs for unforeseen expenses and have enough funds to cover you for 3 months of fixed costs if the project timeline slips or it takes time for customers to notice you.
Add some money for promotion and advertising as you are a new location and want to get your name out there.
You probably want to double check the water, electric, and sewer rates to make certain you are on solid ground as they often can vary significantly by county in some states as those costs explain the difference in profitability and survival. Huge difference between counties in Maryland.
Your construction numbers above are consistent with the ones I received when I spoke with WW, New Horizons, a sign company for a LED sign, and other similar contractors. An ICS Paystation that will allow you to market and upsell your 3-4 wash packages not to mention have a monthly (RFID) subscription plan will cost you $50K (for each bay). Monthly plans seem to be the way to go to lock in some consistent revenue flow. What about floor and bay heating? Are those costs in your numbers as I know radiant heating in cement can be pricey. If you live in Chicago I have to think that it is a must have item given the weather otherwise you are fighting the freezing water on the ground all the time for several months.
I purchased a 30 year old 6 bay car wash that was in need of an overhaul and in the process of adding a WW Touch-free machine and probably updating the other equipment in the SS bays - it's a project.
Lastly, nice to be your own boss so go for it as it sounds like you are taking the right approach to the business challenge.
You probably will want someone (even part-time) to help to keep the place clean and running smoothly unless you plan to be there 100% of the time. When I did my analysis for a recent purchase I broke out my fixed and variable costs so I know the nut I need to cover each month (loan cost, property taxes, basic electricity and water with little use, insurance, security cameras & monitoring, promotion, misc) in the event that I get zero business (due to weather, equipment failure, snow, or some other unforeseen issue), then you understand the true risk and know if it is acceptable. Plan for a 10% variance in building costs for unforeseen expenses and have enough funds to cover you for 3 months of fixed costs if the project timeline slips or it takes time for customers to notice you.
Add some money for promotion and advertising as you are a new location and want to get your name out there.
You probably want to double check the water, electric, and sewer rates to make certain you are on solid ground as they often can vary significantly by county in some states as those costs explain the difference in profitability and survival. Huge difference between counties in Maryland.
Your construction numbers above are consistent with the ones I received when I spoke with WW, New Horizons, a sign company for a LED sign, and other similar contractors. An ICS Paystation that will allow you to market and upsell your 3-4 wash packages not to mention have a monthly (RFID) subscription plan will cost you $50K (for each bay). Monthly plans seem to be the way to go to lock in some consistent revenue flow. What about floor and bay heating? Are those costs in your numbers as I know radiant heating in cement can be pricey. If you live in Chicago I have to think that it is a must have item given the weather otherwise you are fighting the freezing water on the ground all the time for several months.
I purchased a 30 year old 6 bay car wash that was in need of an overhaul and in the process of adding a WW Touch-free machine and probably updating the other equipment in the SS bays - it's a project.
Lastly, nice to be your own boss so go for it as it sounds like you are taking the right approach to the business challenge.
Thank you guys again for the feedback.
There is a lot of good stuff there! I have my distributor taking a ride over by the property this week to crunch some numbers and do some analysis. Would you guys suggest heated driveway so I won't need a snow removal service then?
There is a lot of good stuff there! I have my distributor taking a ride over by the property this week to crunch some numbers and do some analysis. Would you guys suggest heated driveway so I won't need a snow removal service then?
Roz
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Heat the bays as you can justify that expense however costs are very expensive to install and run floor heating. Would not heat more than the bays, get a snow plow service or purchase a used truck with a plow if you are a DIY type of person.
robert roman
Bob Roman
That's great.
Let us know.
A lot of folks come here with similar narratives. Many times, we never hear from them again.
Be great if you could return the favor.
That's how it is here.
Let us know.
A lot of folks come here with similar narratives. Many times, we never hear from them again.
Be great if you could return the favor.
That's how it is here.
O Yes I will no doubt!! I'm going to go to some banks today and see what rates I can get for a 1.5 million loan. You guys have been great helps thus far and I really appreciate it.
I would be a little hesitant to do this, but for another reason. Why are you putting in two touchless machines? Why not a friction and touchless? Touchless just does not clean as well, and its operating costs are 3 to 4 times what a friction is.
Waxman
Super Moderator
$1.5MM loan sounds awfully big to me. I'd be scared of this type of investment because the money coming in is not as dependable as other types of businesses you could invest in. Car washing is dependent upon the weather and the machinery functioning at peak levels. In 10 years the machinery wears out and needs updating. By then you'll be looking at another $500,000 for your re-load of in-bay equipment. And where will your loan be at in ten years?
GoBuckeyes
Self-Serve and Automatics
I would love to hear about your bank seeking experience. It’s been my experience that even with stellar credit, cash in hand and 20+ years of experience operating multiple sites that banks aren’t real excited to loan money for a car wash purchase. Of the ones that will, half of them either want too much money down or the term is too short....or both. Also, don’t make the mistake of thinking the whole loan will be amortized over 15-20 years. Most likely the equipment will only be spread over 7-8 yrs which changes your payments drastically.
pgrzes
Active member
I see nothing in any of this information about costs for edu's, or road egress?? In our area you could be looking in the 100's of thousands for this. I am doubting that this lot has the edu's for a carwash. Just remember that a distributor cares about moving equipment, not how much $$$ you make or lose, so long as hes paid. Also, not sure how much cash in hand you have, but I am thinking you would need 50% to get a bank loan. With no experience in the business as noted here allready banks are not fond of them. I just finished a rehab of a closed wash where I searched out good used equipment 1 Washworld HV and I was just under 1mil. Dont see how you could do ground up all new for close to that. Good luck, be sure to do your homework multiple times. Try to find someone outside your prospective service area to talk to for assistance. Some guys will be helpful, more wont!
Update::: The lot I was looking to buy isn't zoned for a car wash.
I'm looking for new land.
I've found a couple of prime stops that aren't very expensive but I could only do a 1 bay automatic. I'm nervous about a 1 bay if it goes down the cash flow stops completely.
Any advice on a 1 bay?
I'm looking for new land.
I've found a couple of prime stops that aren't very expensive but I could only do a 1 bay automatic. I'm nervous about a 1 bay if it goes down the cash flow stops completely.
Any advice on a 1 bay?
robert roman
Bob Roman
Yeah, same advice as before except reduce scale and scope.
http://www.autocareforum.com/showthread.php?15193-First-Purchase-Are-My-Numbers-Correct
I think you need to be careful. I would take a step back and re evaluate if I were you. It sounds like you may be at the point now where you are starting to take and make concessions on what you thought was a good idea at first just because you have it in your head that you really want to build/own a carwash.
Roz
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Be realistic and conservative with your numbers. See how many cars travel past locations. If price is very reasonable there may be a reason for the low price. Only new washes I see built are express tunnels with free vacs. I suspect the numbers are hard to justify for a 1 Bay IBA as you will probably spend $750k or more to get to opening day.