Bankruptcy

[thecasino5]

So you're looking to lease a single IBA(that's been non-working for 2 years) that is attached to a gas station that is failing due to better competition (and expected to close soon), invest at least $150K in a new machine, and then at least another couple hundred grand into converting said failed gas station into a laundry mat, all on property you don't own? If I'm missing something here let me know but I can't see how this is even remotely a good idea unless you have a LOT of cash burning a hole in your pocket and you need need a lot of loss write offs on your taxes.

So not necessarily. So the company who owns the gas station currently opened a new spot right above on the same street (literally 30second walk) so I am guessing reason for closing is they finally bought their own piece of land and have a brand new spot right above and it would be a waste to keep the old run down one if the new one is open and is getting more of the business (plus they do not need to pay a lease anymore). In regards to location it is prime with I would say everyone who lives on this side of the island will pass by there at least once and it is literally right in front of a 3 way traffic light intersection (also in the middle of like 5 different condo complexes. The only other competition in my area is a 75 foot tunnel. There are no SS bays here, no IBA machines, no touchless machines, there is only that 75 foot tunnel. I just thought it would be a good investment because of its location and the lack of competition. The reason for the car wash not operating for nearly two years is the store owners just lacked to do maintenance on it and did not want to invest more money into it as they are a large gasoline company here in Hawaii. And also the laundromat idea is just an idea and not something I am actively pursuing but just sort of a future plan if the car wash does well and is able to pay for the laundromats opening.

 

[thecasino5]

Don't do it regroup my freind it's that easy we all finally got the full details on this project. If you buy the entire property and lease the store out and keep the carwash for yourself is not too bad but still high risk. However I would not spend 250K renovating carwash and having a short term lease I couldn't fathom the idea. 10-15 year minimum lease. I would pass all together. Last Question who Owns the Gas Tanks in the ground store owner or Oil Company?

As how many gallons a month on a steady Automatic figure 100,000 gallons of water x whatever your sewer/water cost are plus power and are you gonna have to pay the property Taxes also.

Store owner owns the gas tanks or I guess I would say the corporation does as they are kinda like a shell or texaco here in Hawaii. And thank you yea I been debating about my lease terms and I guess I should be doing at least a 10 year term lease. From your experience what is the going rate for a lease in your area with my details of a single bay car wash which is roughly 544sq ft?

 

[traveler17]

Store owner owns the gas tanks or I guess I would say the corporation does as they are kinda like a shell or texaco here in Hawaii. And thank you yea I been debating about my lease terms and I guess I should be doing at least a 10 year term lease. From your experience what is the going rate for a lease in your area with my details of a single bay car wash which is roughly 544sq ft?

How close is the 75 ft tunnel. You will have a hard time dragging away business from them especially since it sounds like they are established. You’re looking at putting in a friction wash right so you won’t differentiate yourself in any way except giving less for more. There is a market for touchless but is it enough to cover? Personally I stay away from leases. I could’ve bought business / lease here that was doing great numbers but when that lease is up you have “zero” to show for it. Let’s say you build up an amazing money maker and have a 10 year lease. All the landlord has to do is look at your great numbers and not renew and decide to do it himself. Even when he tells you you’re not renewing what are you going to do, sell a used machine and you get zero reward for you hard work. Hard Pass

 

[thecasino5]

How close is the 75 ft tunnel. You will have a hard time dragging away business from them especially since it sounds like they are established. You’re looking at putting in a friction wash right so you won’t differentiate yourself in any way except giving less for more. There is a market for touchless but is it enough to cover? Personally I stay away from leases. I could’ve bought business / lease here that was doing great numbers but when that lease is up you have “zero” to show for it. Let’s say you build up an amazing money maker and have a 10 year lease. All the landlord has to do is look at your great numbers and not renew and decide to do it himself. Even when he tells you you’re not renewing what are you going to do, sell a used machine and you get zero reward for you hard work. Hard Pass

So I guess my question would be is why do other people open up more tunnels or more iba in close proximity to other tunnels and iba in a lot places? my train of thought is because they are literally the only other competition and our island is pretty big i thought i could at least take a fraction or less of their business... I would also be catering to the 24/7 people as their wash is from 7am-6pm.

 

[traveler17]

So I guess my question would be is why do other people open up more tunnels or more iba in close proximity to other tunnels and iba in a lot places? my train of thought is because they are literally the only other competition and our island is pretty big i thought i could at least take a fraction or less of their business... I would also be catering to the 24/7 people as their wash is from 7am-6pm.

You’re right about the express tunnels and I’m sure it’s been done but I personally haven’t seen an IBA open near a tunnel, only vice versa in my area. . Like I said there is definitely a market for a touchless and if I were to proceed I would seriously consider the touchless route. My main problem w all of it is a lease and to me 10 years is a short term The one I was offered was 20 years and it still irked me to think of borrowing 300 plus a high lease rate then when I’m ready to retire I have nothing to sell but a business w a lease option “ if I was lucky”. I’d be more on board if you were buying. Glad you’re not taking this personal but the guys on here are giving you some great advice. Good luck w whatever you decide. Keep us posted

 

[Dan kamsickas]

So not necessarily. So the company who owns the gas station currently opened a new spot right above on the same street (literally 30second walk) so I am guessing reason for closing is they finally bought their own piece of land and have a brand new spot right above and it would be a waste to keep the old run down one if the new one is open and is getting more of the business (plus they do not need to pay a lease anymore). In regards to location it is prime with I would say everyone who lives on this side of the island will pass by there at least once and it is literally right in front of a 3 way traffic light intersection (also in the middle of like 5 different condo complexes. The only other competition in my area is a 75 foot tunnel. There are no SS bays here, no IBA machines, no touchless machines, there is only that 75 foot tunnel. I just thought it would be a good investment because of its location and the lack of competition. The reason for the car wash not operating for nearly two years is the store owners just lacked to do maintenance on it and did not want to invest more money into it as they are a large gasoline company here in Hawaii. And also the laundromat idea is just an idea and not something I am actively pursuing but just sort of a future plan if the car wash does well and is able to pay for the laundromats opening.

So to add to my previous concerns you are guessing at the reason for the existing gas station closing. The previous owner neglected the machine before shutting it down for two years. That is a TON of bad reputation to overcome with a new machine in an empty gas station. It may be a great location for a dedicated wash (tunnel or SS/Auto combo) but a single auto attached to an empty building is a non-starter. Washes at gas stations have a horrible reputation at fully functional gas stations. Heck, when I bought my house 25 years ago there were no less than 15 gas stations with washes within 3 miles of my house. Now there is 2 and those suck. It's is, for the most part, a failed business model if the intent is to turn a profit of any sort from the wash and that's at a functioning, busy gas station. All of us long timers on this forum and in the industry have seen you many times before. You're trying to find every positive you can and convince yourself this is a great opportunity but, realistically, I'd say you have a less than a 2% chance of turning any sort of profit on this deal.

 

[thecasino5]

So to add to my previous concerns you are guessing at the reason for the existing gas station closing. The previous owner neglected the machine before shutting it down for two years. That is a TON of bad reputation to overcome with a new machine in an empty gas station. It may be a great location for a dedicated wash (tunnel or SS/Auto combo) but a single auto attached to an empty building is a non-starter. Washes at gas stations have a horrible reputation at fully functional gas stations. Heck, when I bought my house 25 years ago there were no less than 15 gas stations with washes within 3 miles of my house. Now there is 2 and those suck. It's is, for the most part, a failed business model if the intent is to turn a profit of any sort from the wash and that's at a functioning, busy gas station. All of us long timers on this forum and in the industry have seen you many times before. You're trying to find every positive you can and convince yourself this is a great opportunity but, realistically, I'd say you have a less than a 2% chance of turning any sort of profit on this deal.

Hi Dan! Thank you for the advice. Could you please further explain what you mean by every gas station car wash sucks? Are you talking about the equipment itself or I am just a little confused. And I guess I may be trying to find every positive but at the same time do you not think that if there was only one tunnel in my area and no other car washes such as there is no SS, no touchless, and no ibas do you not think there should at least be another car wash to open up to not exactly compete for full market share but instead just add a slight competition and give the community another option especially with the location being quite killer? I guess I just don't understand why opening an IBA would be such a bad idea if the only competition is a tunnel that is not ran 24/7 and so there are no other options for folks to wash their car super early in the morning and a little later at night. Maybe I am still looking to much at the positives but think it is a valid point I bring up. Please share your opinion as I do value everyone's opinion and am very grateful to be talking with you. (side note I have been talking with the store clerks who worked there over 25 years and say they still have customers to this day asking if the car wash is open because they want to use it)

 

[Dan kamsickas]

Hi Dan! Thank you for the advice. Could you please further explain what you mean by every gas station car wash sucks? Are you talking about the equipment itself or I am just a little confused. And I guess I may be trying to find every positive but at the same time do you not think that if there was only one tunnel in my area and no other car washes such as there is no SS, no touchless, and no ibas do you not think there should at least be another car wash to open up to not exactly compete for full market share but instead just add a slight competition and give the community another option especially with the location being quite killer? I guess I just don't understand why opening an IBA would be such a bad idea if the only competition is a tunnel that is not ran 24/7 and so there are no other options for folks to wash their car super early in the morning and a little later at night. Maybe I am still looking to much at the positives but think it is a valid point I bring up. Please share your opinion as I do value everyone's opinion and am very grateful to be talking with you. (side note I have been talking with the store clerks who worked there over 25 years and say they still have customers to this day asking if the car wash is open because they want to use it)

Washes at gas stations, historically, have been a loss leader. Think "Free wash with fill-up". The minimum wage clerk at the counter was not capable, or willing, to fix them if the unit went down. The owners typically did the bare minimum or less to keep the wash quality up. Personally, I would never take my truck through one whether it be touch or touchless. Just because those clerks are claiming customers are saying they want the wash open is meaningless. When the gas station closes those customers will not be there to use the wash. I would bet that there are far, far more who used the wash in it's poorly maintained state that will never use it no matter what you do.

I said it may be a great site for a wash of some sort...but....a single auto attached to a closed down gas station in a building you do not own on land you do not own is a recipe for disaster. You are never going to wash enough cars to make it pencil out to make money. It's really a bad idea.

 

[thecasino5]

Washes at gas stations, historically, have been a loss leader. Think "Free wash with fill-up". The minimum wage clerk at the counter was not capable, or willing, to fix them if the unit went down. The owners typically did the bare minimum or less to keep the wash quality up. Personally, I would never take my truck through one whether it be touch or touchless. Just because those clerks are claiming customers are saying they want the wash open is meaningless. When the gas station closes those customers will not be there to use the wash. I would bet that there are far, far more who used the wash in it's poorly maintained state that will never use it no matter what you do.

I said it may be a great site for a wash of some sort...but....a single auto attached to a closed down gas station in a building you do not own on land you do not own is a recipe for disaster. You are never going to wash enough cars to make it pencil out to make money. It's really a bad idea.

Thank you for the explanation! But I just struggle with the assumptions you make that it will guarantee fail because you do not know the daily car count, the community, the location, and whatnot so I struggle to see your point in it being a very very bad idea. I do however understand most of your points but would respectfully disagree with some of them. I do thank you so much for your advice and will further do more research. I should have my 5 year pro forma finished soon and I will try to send it in this forum to update you guys on my thoughts of the car wash.

 

[Dan kamsickas]

Thank you for the explanation! But I just struggle with the assumptions you make that it will guarantee fail because you do not know the daily car count, the community, the location, and whatnot so I struggle to see your point in it being a very very bad idea. I do however understand most of your points but would respectfully disagree with some of them. I do thank you so much for your advice and will further do more research. I should have my 5 year pro forma finished soon and I will try to send it in this forum to update you guys on my thoughts of the car wash.

I haven't provided you assumptions. I've pointed out what has happened in the industry over the 23 years I've been in it. You can disagree if you want, but that doesn't make it less real. If you're going to ignore myself and others with decades of experience, then I tend to believe you're not doing research but looking for confirmation bias. Again, you're looking to lease a wash bay that has been shut down for two years, attached to a gas station set to shut down, put in at least $150k(and more likely over $200k) of equipment, possibly putting more capital into making the station a laundry mat and you don't own the land. You are not going to wash enough cars and underwear to make this work. You're just not and at the end of it all you won't have the land to try to sell to get out of it with as little damage as possible. I truly hope you realize us cynical industry vets are just trying to save you from making a huge financial mistake. Joe Biden has a bigger chance of forming a coherent sentence than your plan has of working. A very likely scenario, if the site is such a slam dunk, is the oil company sells the location to a developer with far deeper pockets than you and the place gets bulldozed for new use. When that takes place your lease probably will be nothing more than a speed bump for the developer.

 

[traveler17]

Hence what I said previously about a lease. You are here looking for a “go get’em” and the reality is what you’re hearing. Like Dan said , even if you find a Gem and build it up, if the property owner decides to sell his amazing unbelievable location your gonna be standing there left holding your “huevos”. I’ve seen this happen. Don’t let your “want it so bad” cloud your judgment.

 

[MEP001]

You should probably ask a lawyer if it's even legal to "plan" for bankruptcy. A cursory Google search tells me it's not.

 

[Dan kamsickas]

You should probably ask a lawyer if it's even legal to "plan" for bankruptcy. A cursory Google search tells me it's not.

Doesn't matter. He's got a sure fire plan and a killer location. He's going to make a fortune. He'll be back to show us the piles of cash he sleeps on. You'll see. We'll all see.

 

[thecasino5]

Doesn't matter. He's got a sure fire plan and a killer location. He's going to make a fortune. He'll be back to show us the piles of cash he sleeps on. You'll see. We'll all see.

I love this community and think its an amazing platform but I just really do not understand what is up with all this sass. I have been nothing more than respectful to you and I have just been knocked down with sarcasm and been looked upon as a joke. I do not know if this is how you run your businesses and just crap on others but if you do that is a very sad way to do it and you will never make it in life doing so. I really do appreciate all the real advice I been given and appreciate those who deliver it in such a way that is not degrading. And sure yes I may be young and be new to this industry but that should not allow you "veteran" to just talk to new comers in that kind of manner. But hey why am I talking I am just a dumb young person talking out of my butt who has $0 in his bank account and well frick it is a free country so say what you want to anyone but just know that this kind of attitude is the downfall of many. I wish you the best and do appreciate your advice just next time try not be so sassy and degrading as come on this space is suppose to be inviting and educational not a call of duty server.

 

[thecasino5]

Hence what I said previously about a lease. You are here looking for a “go get’em” and the reality is what you’re hearing. Like Dan said , even if you find a Gem and build it up, if the property owner decides to sell his amazing unbelievable location your gonna be standing there left holding your “huevos”. I’ve seen this happen. Don’t let your “want it so bad” cloud your judgment.

Yeah, I definitely see your point. I guess what I was thinking is if the system does pay itself off within the next 4-6 years and then the next 4 years is pure cash flow then even if they do shut me down after my 10 year lease is that I have already made my money. Just as a side note this is not gonna be my main source of income so let's say they do not renew my lease after 10 years by that time I should already have other things going on income wise. And I do highly doubt the landlord would ever do that or sell his land to a developer as here in Hawaii land is a very big premium and people rarely sell this kind of real estate. The owners are also a small privately owned family company that owns chains of grocery stores here in which they do not own many of these commercial rental properties which would be kinda weird for them to sell off.

 

[thecasino5]

Doesn't matter. He's got a sure fire plan and a killer location. He's going to make a fortune. He'll be back to show us the piles of cash he sleeps on. You'll see. We'll all see.

hehe yeahhhh I should have probably not used the word bankruptcy and should have rephrased by just asking if anyone would buy a used in bay automatic system if stuff hit the wall

 

[Dan kamsickas]

I love this community and think its an amazing platform but I just really do not understand what is up with all this sass. I have been nothing more than respectful to you and I have just been knocked down with sarcasm and been looked upon as a joke. I do not know if this is how you run your businesses and just crap on others but if you do that is a very sad way to do it and you will never make it in life doing so. I really do appreciate all the real advice I been given and appreciate those who deliver it in such a way that is not degrading. And sure yes I may be young and be new to this industry but that should not allow you "veteran" to just talk to new comers in that kind of manner. But hey why am I talking I am just a dumb young person talking out of my butt who has $0 in his bank account and well frick it is a free country so say what you want to anyone but just know that this kind of attitude is the downfall of many. I wish you the best and do appreciate your advice just next time try not be so sassy and degrading as come on this space is suppose to be inviting and educational not a call of duty server.

Sorry if you're upset by the "sass" but we've all seen numerous versions of you crash and burn and end up ruined. Please believe me that no one on this forum wants that to happen to you. No one is crapping on you. You came to this forum asking advice for a potential deal. We've given you multiple, legitimate reasons why your idea is a bad one yet you want to poo-poo them. You don't think it's degrading and insulting to do that? You would not be the first to come on this forum with dreams of a deal and either ignore the solid advice given and go belly up ...or....leave mad because we just couldn't realize the awesomeness of the deal. Thing is neither rarely seem to come back to tell us how wrong or right we were. Sorry if after all these years I get a little exasperate but this whole thread is no different than someone who calls me with an issue, I tell them to do A, they do B, and then call me back when the problem is still there, I tell them again to do A, they do C and call back again, etc, etc, etc. We all get a little frustrated when someone with zero industry experience asks us for expert advice and then essentially tells us we're wrong.

Your enthusiasm is admirable but if you go forward with this deal the overwhelming odds are that the outcome is going to be bad for you. I would much rather you have your feelings a be chaffed by what you have said to you in this thread than for you to make a serious financial mistake that could quite literally ruin you for decades.

 

[thecasino5]

Sorry if you're upset by the "sass" but we've all seen numerous versions of you crash and burn and end up ruined. Please believe me that no one on this forum wants that to happen to you. No one is crapping on you. You came to this forum asking advice for a potential deal. We've given you multiple, legitimate reasons why your idea is a bad one yet you want to poo-poo them. You don't think it's degrading and insulting to do that? You would not be the first to come on this forum with dreams of a deal and either ignore the solid advice given and go belly up ...or....leave mad because we just couldn't realize the awesomeness of the deal. Thing is neither rarely seem to come back to tell us how wrong or right we were. Sorry if after all these years I get a little exasperate but this whole thread is no different than someone who calls me with an issue, I tell them to do A, they do B, and then call me back when the problem is still there, I tell them again to do A, they do C and call back again, etc, etc, etc. We all get a little frustrated when someone with zero industry experience asks us for expert advice and then essentially tells us we're wrong.

Your enthusiasm is admirable but if you go forward with this deal the overwhelming odds are that the outcome is going to be bad for you. I would much rather you have your feelings a be chaffed by what you have said to you in this thread than for you to make a serious financial mistake that could quite literally ruin you for decades.

I totally understand and I really do respect you for all the advice and information you have given. No matter the outcome of this whole situation I will surely update the forum if I did end up getting the lease and will update the forum of the journey and or update the forum if I do decide to not get into this project and look else where for other opportunities. Again I am really grateful for everyone's advice and am happy you are looking out for us newcomers; I truly do appreciate it.

 

[Just Call Ben]

I'm new to the forum but not new to the business. I've operated a full serve wash and now own my own business doing remodel, repair and installation of car wash equipment for over 8 years.

I want to let you know that I'm somewhat familiar with Hawaii and have looked up your proposed site. Here's my digest:

A) The site is very depressed. The building is in disrepair with weeds growing out of the eaves and gutters of the roof. The paint color is 20 years old and not attractive.

B) There is limited traffic access as there is no left turn to the site from NB Kuakini Hwy unless the customer knows to turn left on Hanama and come all the way around to your site.

C) The vacant land next to the property may get developed and be toxic to whatever plans you make on the site. The reason that it hasn't yet is that the entire intersection coming from Henry St. would have to be realigned to provide access to the new development. That's about $1.5MM today alone before you even begin building.

If I, and I'm not that brave, were going to do something at that site, I would need to petition and get the city to allow at least a U-turn from NB Kuakini to SB Kuakini Hwy to get my customers onto the property.

I say keep looking and maybe you were more onto something with the laundromat than a car wash.

 

[thecasino5]

I'm new to the forum but not new to the business. I've operated a full serve wash and now own my own business doing remodel, repair and installation of car wash equipment for over 8 years.

I want to let you know that I'm somewhat familiar with Hawaii and have looked up your proposed site. Here's my digest:

A) The site is very depressed. The building is in disrepair with weeds growing out of the eaves and gutters of the roof. The paint color is 20 years old and not attractive.

B) There is limited traffic access as there is no left turn to the site from NB Kuakini Hwy unless the customer knows to turn left on Hanama and come all the way around to your site.

C) The vacant land next to the property may get developed and be toxic to whatever plans you make on the site. The reason that it hasn't yet is that the entire intersection coming from Henry St. would have to be realigned to provide access to the new development. That's about $1.5MM today alone before you even begin building.

If I, and I'm not that brave, were going to do something at that site, I would need to petition and get the city to allow at least a U-turn from NB Kuakini to SB Kuakini Hwy to get my customers onto the property.

I say keep looking and maybe you were more onto something with the laundromat than a car wash.

Thank you so much for your input! If you are here on the Big Island I would love to have coffee with you one morning to maybe use your services and discuss my plans. I sent you a PM if you are interested in maybe being the distributor/installer for the car wash.