Is a 4 bay SS new build still viable?

[Rapidoil]

I've been doing a lot of research and it seems like I keep seeing the same statement. Namely that a Self Serve new construction build isn't viable. Can someone layout the reasons why ? I appreciate any knowledge the group has. I'm interested in building a 4 bay on ground I own outright with decent traffic counts 13/15000 and a great location. It is in a rural town of 5000, with county population of 50000. It looks like the debt service on 300000 loan would be 1800 a month.

 

[MEP001]

Is it viable? Short answer is, it depends. If you're going to pay to have everything done, probably not. Rural town, probably not. 4 bay self serve with no automatic, probably not. Complete build for $300,000? Probably not.

You aren't going to get a $300,000 loan for a car wash. You're going to need about a third of that up front.

What are the property taxes on the land? Don't forget to add that to the $1,800 a month debt service.

30 year note on a car wash? You're crazy.

 

[Rapidoil]

Is it viable? Short answer is, it depends. If you're going to pay to have everything done, probably not. Rural town, probably not. 4 bay self serve with no automatic, probably not. Complete build for $300,000? Probably not.

You aren't going to get a $300,000 loan for a car wash. You're going to need about a third of that up front.

What are the property taxes on the land? Don't forget to add that to the $1,800 a month debt service.

30 year note on a car wash? You're crazy.

Thanks for reply. It's a 20 year note and it would be a business expansion loan through local economic development and local lender. I already have an oil change business. property taxes as of now are 1800/year on bare ground. As far as I understand it my down payment wouldn't be 30% more like 10 I could be wrong though. Also I'll probably play a role in construction and save some costs here and there this the 300000 number but I could be wrong.

 

[eckert16]

Vacant land taxes on 1/2 acre at $1800... check with your property appraiser/taxing authority, get an estimate on what tax assessment of the land will be once developed.

Rapidoil that route 93 traffic count reference, may not really apply to your land; consider the current traffic count on the dead end road itself where the lot is located... your looking to capture traffic driving by you wash. The lot seems a bit away from 93 IF it is the rectangular lot to the South of the dead end road; better capture rates would be direct accesss to rte 93 for max 'drive-by' visibility. To increase spur-of-the-moment customers, take into construction considerations items like parking lot connectors/ thru-ways to connect the West end of your lot to the North/West end of the Super1Foods lot and the Sherwinn Williams parking lot (if permitted in the area).

Consider how to increase visibility:the land may be hard to see from the East behind the paint store; next door (and closer to 93) the Super 1 Foods traffic likely to see it as they walk to the front of the grocery store, but leaving the store...unlikely to see it.

Competition: The other washes in town look to have descent daily usage. In addition to the the spray wash to the South which looks like it has two IBAs bays (1 not being used), an RV spray bay, and 3 spray bays; and the tunnel to the North is as you head out of town; the gas stations equipment looks newer: The Conoco just to the North has a touch free carwash, and the Exxon to the South next door to Super1Foods has a touch free carwash attached.

 

[Rapidoil]

@eckert16 thanks for the reply. I agree my taxes seemed high this year. I just got the bill. Good point on the traffic count and visibility. The property I own is the one immediately to the west of sherwin willams, thus it's closer to the 93 highway. But it's really only visible to folks as they are traveling south on 93. The more I look at this idea the more it seems not plausible. The spray wash down the road seems to be undergoing renovation as it's currently closed. So right now there isn't a functioning spray wash in town. The two in bay washes at the gas stations both seem new. You seem to have a real handle on my area are you local? If so or either way I appreciate your feedback it's very concise and appreciated.

Vacant land taxes on 1/2 acre at $1800... check with your property appraiser/taxing authority, get an estimate on what tax assessment of the land will be once developed.

Rapidoil that route 93 traffic count reference, may not really apply to your land; consider the current traffic count on the dead end road itself where the lot is located... your looking to capture traffic driving by you wash. The lot seems a bit away from 93 IF it is the rectangular lot to the South of the dead end road; better capture rates would be direct accesss to rte 93 for max 'drive-by' visibility. To increase spur-of-the-moment customers, take into construction considerations items like parking lot connectors/ thru-ways to connect the West end of your lot to the North/West end of the Super1Foods lot and the Sherwinn Williams parking lot (if permitted in the area).

Consider how to increase visibility:the land may be hard to see from the East behind the paint store; next door (and closer to 93) the Super 1 Foods traffic likely to see it as they walk to the front of the grocery store, but leaving the store...unlikely to see it.

Competition: The other washes in town look to have descent daily usage. In addition to the the spray wash to the South which looks like it has two IBAs bays (1 not being used), an RV spray bay, and 3 spray bays; and the tunnel to the North is as you head out of town; the gas stations equipment looks newer: The Conoco just to the North has a touch free carwash, and the Exxon to the South next door to Super1Foods has a touch free carwash attached.

 

[Dixievixen89]

I've been doing a lot of research and it seems like I keep seeing the same statement. Namely that a Self Serve new construction build isn't viable. Can someone layout the reasons why ? I appreciate any knowledge the group has. I'm interested in building a 4 bay on ground I own outright with decent traffic counts 13/15000 and a great location. It is in a rural town of 5000, with county population of 50000. It looks like the debt service on 300000 loan would be 1800 a month.

Don't do it. You will live to regret it if you do

 

[Mr. Clean]

Thanks for reply. It's a 20 year note and it would be a business expansion loan through local economic development and local lender. I already have an oil change business. property taxes as of now are 1800/year on bare ground. As far as I understand it my down payment wouldn't be 30% more like 10 I could be wrong though. Also I'll probably play a role in construction and save some costs here and there this the 300000 number but I could be wrong.

How has the oil change business been doing? What is your interest inn car washing now? If you're looking to reverse shrinking numbers with an adjunct business, it likely won't be worth it. With the demographics you described, there has to be another wash in town already?

 

[Rapidoil]

How has the oil change business been doing? What is your interest inn car washing now? If you're looking to reverse shrinking numbers with an adjunct business, it likely won't be worth it. With the demographics you described, there has to be another wash in town already?

Hello, oil change business is good. I have grown my business 10% per year on average. COGs are up but so is pricing. My main reason this pencils out at all is I'm already land owner of 1/2 acre of commercial ground. New high density residential is going to be built on the property to my west. Also a defunct Kmart building neighbor to north, is about to reopen as a large ranch hardware store. Car counts I just found most current at 19000 per day. Lastly it's a rural community and people want to wash large pickups and equipment. We have a tunnel wash. Two gas stations with IBA. Also a spray wash but it's broken down right now. I am 51 and looking for a more relaxing job than my current mobile oil change business. I service 70% large fleets and 30% cars. I don't want to be changing oil when I'm 60. I'm an owner operator.
Thanks
Sean

 

[MEP001]

I am 51 and looking for a more relaxing job than my current mobile oil change business.

That would be another tick in the "against" column.

 

[traveler17]

That would be another tick in the "against" column.

Isn’t that the truth. Or you better have a handy more than dependable employee

 

[Rapidoil]

I appreciate your guys looking out for me but if you've never changed oil for a living I'm working pretty hard wrenching every day. The opportunity to physically hurt yourself is very common. Think diesel mechanic. Eye protection, ear protection etc. Is this, car wash owner, a physically demanding job? Oil changing is physically demanding and very unhealthy exposure to oil, fuel etc. I feel that my mechanical experience and the fact that I'd be 1 mile from my sight would be a benefit. I am glad that you all are looking out for me though and appreciate the feedback. I seriously doubt it's gonna happen at this point. There appears to be two types of feedback as I research this business. People that are telling me run away all the way to you will be skipping around emptying quarters and only working an hour or so a day. I'm sure the reality is somewhere in between. Here's a few pics of a day in the life of mobile oil change. Thanks again for the feedback I do appreciate your time.

 

[Rapidoil]

That would be another tick in the "against" column.

Because of age ? Please elaborate, I appreciate your feedback. It appears you've been doing this a while and it's not your first rodeo. Thanks

 

[eckert16]

‘High density residential’ i would interpret as rental properties where the renters likely ‘don’t care’ about the property they live in and the looks of their cars ... versus high income single family homes where residents value their private property and the looks of their cars.

 

[MEP001]

Because of age ? Please elaborate, I appreciate your feedback. It appears you've been doing this a while and it's not your first rodeo. Thanks

Because you said " I am 51 and looking for a more relaxing job than my current mobile oil change business." Operating a car wash is not relaxing. It's not particularly hard work, unless you dig your pits by hand, and if you have a rural car wash they will be filling up fast. Customers can be assholes, they wash paint out of their beds, they dump concrete or mortar on the floor, they spray grease off equipment, they will do oil changes in your bays, they will tie up a bay for hours detailing and then give you attitude when you ask them to move, many, many other things. You will almost certainly get broken into at some point, then you'll be in a constant state of worry that it will happen again. I hang out at my wash as much as I can, I talk to people and get to know them, and they look out for me and often give positive reviews on Google. That helps keep me on the positive side. If you won't have time to do that, if you think you'll just "drop by once a week to collect quarters," you will be very disappointed.

 

[Dan kamsickas]

I appreciate your guys looking out for me but if you've never changed oil for a living I'm working pretty hard wrenching every day. The opportunity to physically hurt yourself is very common. Think diesel mechanic. Eye protection, ear protection etc. Is this, car wash owner, a physically demanding job? Oil changing is physically demanding and very unhealthy exposure to oil, fuel etc. I feel that my mechanical experience and the fact that I'd be 1 mile from my sight would be a benefit. I am glad that you all are looking out for me though and appreciate the feedback. I seriously doubt it's gonna happen at this point. There appears to be two types of feedback as I research this business. People that are telling me run away all the way to you will be skipping around emptying quarters and only working an hour or so a day. I'm sure the reality is somewhere in between. Here's a few pics of a day in the life of mobile oil change. Thanks again for the feedback I do appreciate your time.

The reality is somewhere in between. If it's a new build, theoretically, you will have less mechanical work on a day to day basis for the first year or so. There is a lot of moving parts even on a 4 bay self serve. I usually tell people that it will be the easiest 80 hour a week job you'll ever have. You may string together a couple of weeks where everything runs smooth as silk, customers don't trash anything, nothing leaks or breaks, you're only there a hour or two at most everyday.................and then you can string together a couple weeks where it seems you're never not there. Regardless, you or someone has to be there every single day.

As for physical labor, it can range from rinsing down bays to hauling trash barrels to multiple 50lb bags of softener salt to crawling on a roof or ceiling looking for a leaking line or wrestling with a 5hp motor that weighs 90ish pounds.

I'm not precisely sure where you're at but from your pictures it's obviously a cold weather climate. Cold weather is a mixed blessing. A little sunshine after a little snow and salt and you'll be crazy busy.....but it's also extremely hard on all the equipment.

Depending on how much you spend upfront a 4 bay can make money but probably not enough to live off of by itself. You could use tokens or some kind of gift card handed out to your oil change customers to help promote it.

 

[Waxman]

lots of great advice given so far!

 

[KYwashywash]

Hello, oil change business is good. I have grown my business 10% per year on average. COGs are up but so is pricing. My main reason this pencils out at all is I'm already land owner of 1/2 acre of commercial ground. New high density residential is going to be built on the property to my west. Also a defunct Kmart building neighbor to north, is about to reopen as a large ranch hardware store. Car counts I just found most current at 19000 per day. Lastly it's a rural community and people want to wash large pickups and equipment. We have a tunnel wash. Two gas stations with IBA. Also a spray wash but it's broken down right now. I am 51 and looking for a more relaxing job than my current mobile oil change business. I service 70% large fleets and 30% cars. I don't want to be changing oil when I'm 60. I'm an owner operator.
Thanks
Sean

I’m in Kentucky and I have similar situation. Outside of Lousiville more rural trucks etc. I have two auto two self serve. Self bring in approx $500-$1000 a week. So probably could be done but with some economic downturn and no autos it could be hard some months. Good luck!

 

[soonermajic]

If the Self Serve wash is NOT going to open up, I say do it! If there is even a slight chance, I say do NOT do it.

 

[Dayspring]

Is it viable? Short answer is, it depends. If you're going to pay to have everything done, probably not. Rural town, probably not. 4 bay self serve with no automatic, probably not. Complete build for $300,000? Probably not.

You aren't going to get a $300,000 loan for a car wash. You're going to need about a third of that up front.

What are the property taxes on the land? Don't forget to add that to the $1,800 a month debt service.

30 year note on a car wash? You're crazy.

You can easily get a loan for this, even with zero out of pocket... but not from a bank.
Contact your local title companies and ask them to recomend any "private lenders".
I'm only licensed in WA State, but we do about 40 loans like this every year using private lender funds to close loans that conventional lending rejects.
It would be set up with the funds you need for construction kept in an escrow account and paid out in draws as work proceeds, like a construction loan.
Your owned property would be collateral for the loan. As work progresses and property value goes up, the lenders "Loan to Value" would be protected because the only lender funds at risk are those that are going into the improvements of the property.
Private lenders love long amortizations because they get less of thier own money back each month, meaning more of thier money earns interest longer instead of getting paid back to them.
If your property is worth enough, you could even get this done with zero out of pocket for closing costs.
No private lender would want to carry the loan for 30 years so expect there to be a balloon payment.
When contacting a potential private lender, you could provide 3 different lending scenarios that your comfortable with and let them choose.
One example would be:
300k at 9% interest, amortized over 30 years with balloon at # years. (keep the balloon at 7 years or less)
For this example your principal and interest payment would be $2,413.87
This should be considered a temporary loan untill you get it built and refinanced.
This type of loan is a "tool" to get the job done, consider the higher interest rate the "cost" of that tool that you couldn't get the job done without.
You could also offer one year garaunteed minimum interest in exchange for a lower interest rate. (keep that in your pocket for negotiating)
Run your numbers and make sure everything pencils out.
Also, talk to your accountant about what you are planning so they can help guide you into the best tax strategy. Accountants hate it when you come to them with "look what I did... now what?"

 

[TMJ]

My situation is pretty similar. 3 bay SS with old DS touchless, town of around 2k with traffic count of little less than 9k. But You’d have to drive 20-25 mins to get to any other wash. I do get some tourist traffic for the lake.
Even with my traffic count on the worst month the bays will do 1250 each and another 1500 for the auto. My prices are also still probably too low $1.50/3.5 mins, and I’m slowly renovating as it still has more potential. In my opinion in rural settings a lot of people still like self serve option. Thoroughly vet water and sewer, my water is quite a bit higher than National avg, and I just pay it twice for sewer also.
All that being said my go, no-go is if the business can cover expenses and a 15 year note payment, and make $1k a month with the most conservative estimates and lots of upside, then I’m in.