21 Y/O, Potential First Car Wash, No RE Experience

[Anthonyk7261]

Hello everyone,

Grateful to have found this forum. Today I was at a car wash that I have known about for years and always dreamt of owning. I asked an attendant if she knew the owner and they gave me his number and said he is interested in selling because they have so many businesses and not enough time. It would be a package deal with the retail building 30 feet directly in front of the wash, that building is 5 years into a 10-year lease. Last sold the package for $437.5k in 2016.

The car wash is well kept and running well. It has 3 self-service bays and one automatic touchless bay(seems to be a little old). The self-service only accepts quarters, the automated bay has an old swipe credit card reader. The building is in very good condition. There are also paid vacuums, I believe 4-6 of them? It is pretty poorly marketed, and not the most visible from the street. The retail building kind of blocks the wash from the street. It's not even registered on google maps. I have an amazing idea that will solve this(doesn't matter right now).

Here is a little about me:
I am 21 years old, no real estate experience other than helping my dad manage his only rental duplex, which he just sold a few months ago.
I am an operations manager at a retail warehouse that is growing very rapidly. (Graduated last summer with a Bachelors in Business Admin/ Finance)
I installed some vending machines with card readers at those warehouses for a side hustle, average about $250-300 net per location a month in the winter.
I flipped cars to pay for college and graduate debt-free.

I really want to look into this, but I have no idea on where to start as far as financing goes. I would like to use as little cash as possible because obviously, I don't have a ton. I don't even know what the owner is going to ask for it. I know a bit about owner financing and would love to do it that way, but I am guessing it's not paid off since it was purchased so recently. I am also intimidated by how large a deal this is. My income is around $70k a year and increasing, and I have about $30k in liquid assets/cash. Is this something that I would be able to make happen financially?

When I call the owner, what are the main questions I need to ask him about the car wash and property in general? Any input is very much appreciated. Pic of the wash included.

 

[MEP001]

I would like to use as little cash as possible

This will probably end up being your biggest hurdle. Banks don't like to loan money for car washes and tend to want at least 30% up front.

You will want to get a P&L from the owner, but these are so easily fudged they're usually meaningless. Water bills will give you a more accurate look at true income, unless he's been leaving a garden hose to run down the drain to inflate that. Spending a few hours over several weekends watching and counting cars is pretty accurate.

 

[MC3033]

I don’t think your going to get a bank loan on this based on what you described unless you have a partner who will sign the debt. If you obtain a loan or owner financing you will still need some start up cash for expenses that could occur before cash flow. If you want to improve the business you will need to have cash for that or bake it into the loan

Are you also ready for the time investment in this? You will basically be writing off vacations and fun if your early twenties here.

Other then basic numbers I’d inquire about the attendant situation and age/types of equipment.

You definitely seem like a hustler and this could be a very solid investment for you. Best of luck

 

[Eric H]

Will the owner do owner financing? Without having a downpayment this may be your only option.
It would be smart of you to develop a relationship with another carwash owner that is outside of your market area but not too far away. I've found that carwash owners are very willing to help each other even when there is no direct benefit to themselves. This forum has certainly helped many along the way including advising interested owners to RUN from the wash they want to purchase.

 

[Zgoods]

Yo, you can definitely do this! You have a degree and it seems like the know-how on running a business. Think about all the businesses out there that people make a living on, you really think they are all smarter than you? heck no! Don't worry about the lack of direct experience,

Owner financing is a really good thing to ask about, if you don't want to do a down payment because you need the cash for upgrades offer a share of the profits until your would be down payment is paid. Build out your own financial model and then get the financials from the owner and compare the two. This way you can see how realistic his numbers are.

I am trying to purchase my first wash, its just a shell of a building so I am trying to go deep. This guy gave me the confidence to at least try, I am still working out my pro forma but I think it's gonna be doable!

edit: Ask for p&l, equipment records/maintenance history, any theft at the building and ask him directly why selling.

https://www.youtube.com/c/CarWashChronicles

 

[Randy]

I’d be a little apprehensive believing much of anything that I read or see on the internet. The car wash business isn’t as cracked up to what everyone thinks it is. It frigg’n hard work and it costs a lot more than what everyone thinks it does. A car wash here just sold for land value, $1.4 million. It’ll be gone in 90 days.

 

[Zgoods]

I’d be a little apprehensive believing much of anything that I read or see on the internet. The car wash business isn’t as cracked up to what everyone thinks it is. It frigg’n hard work and it costs a lot more than what everyone thinks it does. A car wash here just sold for land value, $1.4 million. It’ll be gone in 90 days.

A car wash located on land valued at $1.4MM can't be a common occurrence and makes total sense that it would be redeveloped for something more profitable.

 

[MEP001]

A car wash located on land valued at $1.4MM can't be a common occurrence and makes total sense that it would be redeveloped for something more profitable.

Not in Detroit. A wash near mine was sold for $3 million and bulldozed for a 7/11.

 

[Randy]

I get letters in the mail every so often from people who think they want to get into the car wash business, I toss them in the garbage. It takes a special breed to be in the car wash business and most people I've run into don't have what it takes. 24/7 on call, no weekends off, every time the phone rings you wonder if somethings wrong at the car wash. It's a great life.

 

[Greg_T]

I reckon that I have a pretty good work ethic, but I certainly wouldn't have wanted a car wash at 21. As Randy mentioned, 24/7 committment and often pretty ugly work - shovelling mud, cleaning various unknown filth from bays, blowing dust out of vac filters etc. At nearly 50, kids older, no need for many social activities on weekends, a car wash works well with my current lifestyle. But at 21, no way.

 

[Joswhaha]

Small business in general is pretty rigorous if you want to be successful you must put in the work. I’m new to the car wash industry but I know there are constantly small problems that could stop you from being successful or eventually wear you down to the point you don’t even care.

When I was first getting into business I had an old guy tell me just how great business ownership was. I remember him telling me “owning a small business is great, you only work half the day and even better than that you get to pick what 12 hours you work”.

 

[Bricks]

Small business in general is pretty rigorous if you want to be successful you must put in the work. I’m new to the car wash industry but I know there are constantly small problems that could stop you from being successful or eventually wear you down to the point you don’t even care.

When I was first getting into business I had an old guy tell me just how great business ownership was. I remember him telling me “owning a small business is great, you only work half the day and even better than that you get to pick what 12 hours you work”.

I thought about keeping my job when I bought mine last year. I would check the cameras at the wash from work quite often. Three hours into a 10 hour shift, you check the cameras and see a muddy mess and trash all over the place. Well, in about eight ours I’ll have that cleaned up! No worries! Not losing business because of that!
Last night I had a nightmare about someone shoveling out a foot of sand into the wash bay. This business has a price.

 

[Zgoods]

Trash, mud, vacuum cleaning. All seems like low level maintenance that can be hired out. Buying all new equipment for a self serve can you not expect a reasonable useful life so you aren't there every weekend? Make relationships with trade workers to service equipment and offer free washes as an added incentive to prioritize your work when stuff does break down. What am I missing here?

The wears of a small business don't sound that much different from wears of working for other people, pick your poison.

 

[Rfreeman]

Trash, mud, vacuum cleaning. All seems like low level maintenance that can be hired out.

Buying all new equipment for a self serve can you not expect a reasonable useful life so you aren't there every weekend?

Make relationships with trade workers to service equipment and offer free washes as an added incentive to prioritize your work when stuff does break down. What am I missing here?


The wears of a small business don't sound that much different from wears of working for other people, pick your poison.

Hmmmm hiring it out, yes it can but one important factor especially in today's economy finding those people that are reliable.....let me know how that goes for you.....


Get inside an equipment room and check out all the moving parts and let me know what you think. New or used your going to have break downs. Hell I have recieved brand new parts that have failed within 24 hrs. For example a simple foot valve in a soap bucket now in 24hrs your tank over flowed your soap bucket dumping it on the floor all the while pissing off your customers bc no soap is coming out.

Find you a wash near you and spend a month there and get into the grind of it and then report back on what your missing????

This is true but it's always better to work for your self than others

On a side note, don't put so much weight on your YouTube mentor.....yes he runs washes (on a lease) but everything he is putting out on that channel is to get views and clicks basically BS.[/QUOTE]

 

[Greg_T]

Trash, mud, vacuum cleaning. All seems like low level maintenance that can be hired out. Buying all new equipment for a self serve can you not expect a reasonable useful life so you aren't there every weekend? Make relationships with trade workers to service equipment and offer free washes as an added incentive to prioritize your work when stuff does break down. What am I missing here?

The wears of a small business don't sound that much different from wears of working for other people, pick your poison.

If you believe that in small business you can just hire people to do all the hard work, you're sorely mistaken. Especially in early years when money is tight you will need to do as much as possible yourself to keep costs down. There is no way around it - small business can bring great rewards but only with LOTS of hard work and determination.

Also, who do you believe ....
a YouTube guy chasing likes, or the hundreds of years of experience on this forum. I know where I would place my trust.

 

[Waxman]

if hiring out all the work that needs to be done at a car wash was a feasible option, don't you think that all the members of this forum would be doing that? They are not. They are managing the car wash themselves.

It might be appealing for you to think that there are shortcuts that you can take to success in anything in life. There aren't. Successful operators got that way through hard work and determination.

hiring trades people to repair car wash equipment? That's laughable. Any plumber or electrician I've ever shown into my equipment room is completely overwhelmed by what's inside. The electrician I just hired recently to install my automatic wash wanted to quit As soon as he realized the scope of the project. He should've read the blueprints but he didn't.

Go work for a car wash for a while and see how it is then make your decision.

 

[traveler17]

Trash, mud, vacuum cleaning. All seems like low level maintenance that can be hired out. Buying all new equipment for a self serve can you not expect a reasonable useful life so you aren't there every weekend? Make relationships with trade workers to service equipment and offer free washes as an added incentive to prioritize your work when stuff does break down. What am I missing here?

The wears of a small business don't sound that much different from wears of working for other people, pick your poison.

Please stop telling everyone here exactly what you would do and how you’d do it. If you think it we have all tried it. Boy what a stellar idea!! Let’s find an employee who will pick up and keep your lot respectable , be dependable and take pride in his work. It’s more than what your YouTube mentor says it is. No one here has ever said “don’t do it” we are giving realities of this business and it’s time consuming

 

[Dan kamsickas]

Trash, mud, vacuum cleaning. All seems like low level maintenance that can be hired out. Buying all new equipment for a self serve can you not expect a reasonable useful life so you aren't there every weekend? Make relationships with trade workers to service equipment and offer free washes as an added incentive to prioritize your work when stuff does break down. What am I missing here?

The wears of a small business don't sound that much different from wears of working for other people, pick your poison.

You, and your youtube mentor, really don't know what you don't know. I've watched his videos and am patiently waiting for the final one where the bank shows up with new locks.

Here's a real world scenario: The weather has sucked all week. Non stop rain and cold. If it's a northern climate, change that to snow. Your lease and/or loan payment is still there, electric bill, taxes, (in cold your heaters are running also) and you not having done a cent in business for 4 or 5 days. Good News! It's going to be sunny and warm on Saturday and Sunday. You're going to kill it this weekend. Your crack attendant shows up to check the wash early Saturday and there is water coming out from under the equipment room door and none of the equipment is powered up. What are you going to do? Who are you going to call? What are you going to do when all those customers you were banking on this weekend leave and go to a competitor and some NEVER come back. It's really hard to develop a steady customer base, harder to keep them, and damn near impossible to get them back.

I and many others on this forum who individually have decades of experience are trying to tell you to temper your expectations. We've all seen countless individuals(and some corporate entities) who've attempted to enter this industry with a "it's really not that hard" attitude and with nearly zero exceptions they all have failed.

 

[I.B. Washincars]

The retail building kind of blocks the wash from the street. I have an amazing idea that will solve this(doesn't matter right now).

No, you don't (short of tearing it down). How many washes do you see behind other businesses? This was done in the early days of SS washes. They were stuck behind gas stations, lubes, convenience stores, and whatnot. They virtually all ended up being red-headed stepchildren and went away. One thing you can't fix is a bad location, and this is one of them.

 

[Dan kamsickas]

No, you don't (short of tearing it down). How many washes do you see behind other businesses? This was done in the early days of SS washes. They were stuck behind gas stations, lubes, convenience stores, and whatnot. They virtually all ended up being red-headed stepchildren and went away. One thing you can't fix is a bad location, and this is one of them.

They, as a rule, were built by people who thought they knew better than anyone else. I've know several. I wonder what business they're "conquering" now.