I feel like Im missing something

[scangi]

I had a thought and i feel like im missing something here, is it not possible to find car washes that sit on land they dont own, buy the land, wait for the lease to run up and not renew it.. and after they leave, operate the car wash yourself?

Im thinking this because car washes are impossible to move, no? If you were to buy the land under a carwash 1 year before the lease runs out, and decide not to renew the lease with them... do you keep the carwash after they leave?

Please inform me of what im missing here.

 

[Rfreeman]

Yeah it's possible but not very common. Typically land leases are part of a financing move to raise capital after the initial project is complete. When you refer to car washes do you mean ss or tunnels? Here in Fort Worth area there is only 1 car wash that operates on a lease all other are owned outright.

Typically a lease will have built in options by that I mean it's their right to turn it down or not. By options I mean 5 7 or 10 year periods to extend the lease agreement. Your thinking is a little over simplified.

 

[Randy]

A few years ago I had a friend who's car wash was on leased ground. The investment group that owned to dirt decided to not renew the lease. They figured that they could get a car wash for free by not renewing the lease. the owner of the car wash took every out of the car wash down to the wiring and plumbing. All the the investment group got was an empty shell of a building and that was all within there rights because the investment group didn't own anything but the building in the end.

 

[traveler17]

Exactly what Randy stated. Whoever is leasing the property can take everything attached to the building

 

[jfmoran]

I had a thought and i feel like im missing something here, is it not possible to find car washes that sit on land they dont own, buy the land, wait for the lease to run up and not renew it.. and after they leave, operate the car wash yourself?

Im thinking this because car washes are impossible to move, no? If you were to buy the land under a carwash 1 year before the lease runs out, and decide not to renew the lease with them... do you keep the carwash after they leave?

Please inform me of what im missing here.

What you're missing is thinking you're going to find a well run, well maintained car wash in this scenario and you can just step in and take over a successful business. Instead, assuming you find this scenario, what you will find is a dump of a car wash, that most likely needs to be gutted and re-equipped. Successful car washes are not going to be in a position where they ony have one year left on their lease, and most will have a first right of refusal to buy the land.

 

[scangi]

Thanks for the insight, I knew there was something I was missing.