Looking to lease car wash

[gnat91]

As the title says I am looking at leasing a carwash the has been closed for at least two years. It is located at an intersection that has roughly 7500 cars a day on both roads. There are 5 SS bays and 1 bay that I believe had an IBA with two services bays for a former quick lube place. I am hoping to use the two bays for detailing with a small retail store in the waiting area. With a touch less IBA big enough to do dually trucks and outfitting the 5 SS bay I was thinking it would be around $100k is this number reasonably close? I would be more worried about getting the IBA up and running initially as that seems to be the money maker.

I don't have a huge amount of money for this so I would need to look into financing, with a solid business plan how hard would that be? Speaking of business plans how could I estimate the amount of revenue and profit this would/should/could produce?

Does this even sound feasible? I've been doing a lot of research into the car wash industry but still feel like there's no clear picture of everything in my head so any advice or places to get advice would be very appreciated.

Thank you.

 

[MEP001]

You're planning on spending $100k on a leased car wash? Is the place for sale or just for lease? How good is your credit? Banks don't like to loan money for car washes - they tend to want a high interest rate or expect 30% or more up front.

Can this place be re-opened? In some areas that can be a problem. Eminent domain can come into play, or if it's been closed too long it might need to be treated as new construction. You'd be looking at months of planning, permits, possibly rewiring and re-plumbing everything from scratch.

 

[gnat91]

$100k on equipment, the lease is $2600 a month. Not sure if they would be willing to sell it.

I believe that it could be re-opened, but, it certainly something to look into and confirm. They seem to be a little more lax around here with stuff like that then some places.

Thanks

 

[washnshine]

You are willing to spend $100,000 on equipment and that sounds like you think the IBA is the only thing that needs to be addressed. What is the condition of the 5 SS bays? If they are not updated, functioning with modern options, and able to give high quality results to your customers, they won’t be taking in much in terms of revenue.

If you have not had a good close look at both the bay and equipment room equipment, don’t assume those 5 bays are ready for business.

 

[gnat91]

There is no equipment, am i being naive in thinking that $100k would cover an IBA and the SS bays? My focus would be more on getting an IBA up and running as I feel like that would bring in more revenue than the SS bays. I am also probably at least 2 months away from going into this and dont believe the SS bays would get used much at all during the winter, but again I may not have any idea what talking about.

 

[Roz]

You are going to spend more than $100K depending on the paystation and the IBA, not to mention anything else that may need to be repaired. Spending money in an attempt to generate a paycheck does not make sense - used equipment loses original value quickly. If you cannot own the property and your improvements most people would not go into such a venture as you are not building any equity. Will be very hard to sell in the future too if you are a lease.

 

[I.B. Washincars]

There is no equipment, am i being naive in thinking that $100k would cover an IBA and the SS bays?

Absolutely!!! Just equipping an IBA would easily be 150K. The only way I think this might work is to get used equipment for pennies on the dollar. Express developers are in a race with Dollar General to see who can build the most locations. Many good SS/IBA washes are being torn down for these. They usually will take whatever they can get for it, just to get rid of it. A seasoned veteran could jump on it and be ok, a greenhorn...that scares me and I ain't scared of nothing.

 

[tdlconceptsllc]

First I admire your desire and drive to make money and thinking outside the box keep that up. But I beleive this is a terriable deal 2,600 a month for Rent on a Closed down wash. I wish I was the LandLord in this situation your better off buying this wash. This is blowing my mind!!. Not trying to be a downer my freind but I would run so hard away from this Deal its not even funny. I just want to know the landlords plan/tactics on how to convience people into signing a lease for this with not even one dollar to show for current income on a abanded wash. Run harder than Forest Gump and thank us Later seriously. (Find something with way more ROI than a Highly leased abanded carwash in the middle of a worldwide crisis)

I could see a ground lease for $2,600+ a month for Retail for X years or something in a high profile location but not this from the description.

 

[gnat91]

Many good SS/IBA washes are being torn down for these. They usually will take whatever they can get for it, just to get rid of it. A seasoned veteran could jump on it and be ok, a greenhorn...that scares me and I ain't scared of nothing.

Good to know, I'm fairly handy and was considering used equipment for the SS bays but yeah the IBA seem pretty intimidating for a newby.

First I admire your desire and drive to make money and thinking outside the box keep that up.

Thanks!

I feel like the lease price is a little high the only reason to consider it, ill admit, is because of the service bays. I would certainly be more interested in buying it but I'm nowhere near having the money to buy it and outfit the building also.

Thanks for the replies and advice guys its very appreciated.

 

[MEP001]

You could probably get it up and running for $50k, but you'll need a lot of help, a good bit of time, and a good deal on used equipment. I agree the car count is too low, but that might not be a problem if there's really good access. My wash is at a traffic light so getting in and out is safe and easy.

I wouldn't touch this wash for a few reasons. One, the lease is way too high for just the building. Someone near me is willing to lease a fully functional 6-bay SS for $3000/month, and that's too high given the numbers he showed me. Two, what happens if you lease it, install new equipment, and you can't make it work? Or he quits making his payments and he loses it to the bank with your equipment in it? The bank won't let you remove it. Another issue is that you've made improvements to his property. It's supposed to get reported ad an asset, so the property value and taxes will go up. He may ask you for more money or try to get out of the lease, or not pay taxes and lose it. Way too many risks IMO.

 

[Roz]

If set on getting into the industry look up the property value on the public database and make the owner an offer to purchase at assessed value (or lower). He can say no thanks or give it some consideration as I doubt he has many people seriously considering a lease arrangement. Loans are fairly inexpensive now so a good time to get a loan. You probably can find some good used equipment on car wash consignment website but create a realistic budget first to see if you can make this project fly.

 

[gnat91]

I agree the car count is too low, but that might not be a problem if there's really good access. My wash is at a traffic light so getting in and out is safe and easy.

What would you say would be a decent car count? It is at an intersection with a traffic light, which would help I would think.

Two, what happens if you lease it, install new equipment, and you can't make it work?

This is what i'm worried about and why I'm here for advice and not just singing a lease and jumping in.

Or he quits making his payments and he loses it to the bank with your equipment in it? The bank won't let you remove it. Another issue is that you've made improvements to his property. It's supposed to get reported ad an asset, so the property value and taxes will go up. He may ask you for more money or try to get out of the lease, or not pay taxes and lose it.

Its owned by a large company with property all over the town and country so not worried about it getting seized, which makes me think they don't care to much about leasing it and are fine using it as a tax right off. I'm trying to get a budget together and see if it makes sense, going to start looking into what I might be able to afford for buying the building. I got a lot more research to do before I commit to anything that's for sure.

Thanks for the continued advice guys.

 

[tdlconceptsllc]

Ok let say he does buy it for tax value. He still has to make bank payments, insurance, taxes, all expensises and pay for the used equipment and pay someone to instail it if it's done correctly not to mention repairs on the used equipment once it starts up. Then he has to hope & pray the business comes back and run a solid operation in between all this & it takes more than "real estate paint" as I call it to make all this work. His competition could be a express right down the road with free vacs then what does he suppose to do?. I say pass way too risky unless your gonna buy it for cheap cheap. He needs to tell us about the competition