New Build - is it really worth it?

[Swamp Donkey]

I'm looking at a new build with 3 SS and 1 IBA (Typhoon likely) and I'm trying to figure out is it really worth it and where to get the true ROI. I have already talked with Oasis and got their feedback, but I wanted to see what others have experienced and how to truly calculate the ROI and income potential on a new build. I'm always hesitant to go all in on a salesman quote so wanted to get more opinions.

What I am seeing is around $3M all in cost for the land, building, equipment, etc.

Average CPD is 17,000
2 lane highway on the edge of town next to a high end residential area with around 1000 houses.
Easy access on an access road that would be shared with a remodeled Sonic and a coffee shop that is about to be built.
4 miles to the nearest car wash
water and sewer are good. water doesn't need treated much and is very neutral on pH
large new apartment townhouses with around 200 units just built 1/4 mile away.

Anyone have some time to discuss or potentially share a ROI analysis tool that is commonly accurate?

Any opinions are welcomed!

Thanks!

 

[traveler17]

That’s A TON of money for a self serve. There is a reason you’re not seeing them built anymore. Some of the new tunnel washes being built are 3 to 5 million and they have to wash “ from what I understand because I’m not a tunnel guy” 4 to 500 a day. You’re not going to wash that unless you r the only wash in the city and then you can’t get that kind of volume out of a single IBA. Out of curiosity what did your sales guy tell you what you would generate out of a 3/1 site??

 

[liftheavy]

3 million to build a ss/iba? that's actually insane.

 

[soonermajic]

.mortgage gonna be $20,000/mo!

You better wash a $hit ton of cars, charge about $18--$20 for top pkg, & have a lot of SS biz. SS better be $!/minute & Vacs close to that.
Hel, I'd buy nice used equipment & shave off a quick mil. Then it's doable. With all brand new equipment, no way Id do this.

 

[traveler17]

.mortgage gonna be $20,000/mo!

You better wash a $hit ton of cars, charge about $18--$20 for top pkg, & have a lot of SS biz. SS better be $!/minute & Vacs close to that.
Hel, I'd buy nice used equipment & shave off a quick mil. Then it's doable. With all brand new equipment, no way Id do this.

At least 20k a month. I wouldn’t even gamble that w used equipment

 

[Swamp Donkey]

That’s A TON of money for a self serve. There is a reason you’re not seeing them built anymore. Some of the new tunnel washes being built are 3 to 5 million and they have to wash “ from what I understand because I’m not a tunnel guy” 4 to 500 a day. You’re not going to wash that unless you r the only wash in the city and then you can’t get that kind of volume out of a single IBA. Out of curiosity what did your sales guy tell you what you would generate out of a 3/1 site??

Estimating around $750k gross a year.

 

[Swamp Donkey]

.mortgage gonna be $20,000/mo!

You better wash a $hit ton of cars, charge about $18--$20 for top pkg, & have a lot of SS biz. SS better be $!/minute & Vacs close to that.
Hel, I'd buy nice used equipment & shave off a quick mil. Then it's doable. With all brand new equipment, no way Id do this.

equipment is estimated around $650k. Building (concrete, water sewer, etc) from ground up is looking around $1.3M. Dirt lot to completion.

 

[liftheavy]

Estimating around $750k gross a year.

no way bro, even an express car wash washing 150-200 cars a day is barely grossing $750k in revenue.

 

[traveler17]

Estimating around $750k gross a year.

Yeah I’d tell that guy to get off the meds. No way

 

[Earl Weiss]

Estimating around $750k gross a year.

Last industry article I saw was average $2K / Mo / SS Bat x 3 = $6k, and $6 / Mo/ IBA = $6K or $12/K / Mo or $144K / year. So someone is estimating 5X average?????

 

[Swamp Donkey]

Last industry article I saw was average $2K / Mo / SS Bat x 3 = $6k, and $6 / Mo/ IBA = $6K or $12/K / Mo or $144K / year. So someone is estimating 5X average?????

Don't happen to remember where you read that do you?
Thanks!

 

[Dan kamsickas]

equipment is estimated around $650k.

If the Auto is in the $250K range what are they talking about for the additional $400K?

 

[Greg Pack]

My vote is no.

I’ve got one wash that is a 4/2 with better traffic and density and I did 530k last year. It’s in the south so no snow/ice. That place is pretty busy. A 3/1 doing those numbers would be slammed all day long seven days a week

how much is the land, and how big is the parcel?

 

[soapy]

I would not build if it was over 1.5 million and would try to have at least 2 IBAs and 4 ss bays at that. Auto Laundry News does a yearly survey on SS washes. I would start there to build a pro forma off of their numbers.

 

[Waxman]

let's go back to the numbers for a minute. 17,000 cars per day. I used 3/10 of a percent for my capture rate in my business plan. That put you at 51 cars per day average. By the way it took me almost 20 years to reach my capture rate at my site and that is with a brand new razor that I installed about 15 years after I opened.

The other problem is that you have a divided highway out front which is going to make egress difficult despite what you might think about an access road and siphoning off traffic from the existing businesses. That is some extreme wishful thinking on your part.

The build cost is too high and this business model will not pay the note. Sorry but this is a nonstarter.

 

[AnalyticWash]

Estimating around $750k gross a year.

This is a stretch.

I'd say less than 5-10% of 4/2 sites gross over 750k.

It might take you 3 to 5 years to get to those numbers if you do reach them. Single auto bay will not help.

Highest 4/1 numbers I have ever heard of was 650k and he had ridiculous traffic with no competition in the touch-free space.

 

[soapy]

Auto Laundry News 2023 SS survey, here are some quick numbers for averages.
SS bay each average gross $1810 per bay Past experience from surveys are a 30 to 40 % expenses on SS bays
Vacuum $331 per vAC
Vending $352
Auto bay $14,000 gross , $4800 net profit. If you had 2 IBAs the gross per each would be lower.

These surveys tend to be responded to by washes doing above average in my experience and proud owners are more likely to reply to them
If you use these numbers your gross is well below coming close to cracking the nut as they say.

 

[liftheavy]

equipment is estimated around $650k. Building (concrete, water sewer, etc) from ground up is looking around $1.3M. Dirt lot to completion.

would you share which manufacturer you're going with?

i'm not a iba/ss guy, but i did just refit a 100ft tunnel with pretty much brand new tunnel equipment minus tunnel controller, power pack, air compressor, mcc, vacs for pretty much under 600k. i thought even petit which is one of the most expensive iba goes for about $250k a pop last time i asked.

 

[soonermajic]

This is a stretch.

I'd say less than 5-10% of 4/2 sites gross over 750k.

It might take you 3 to 5 years to get to those numbers if you do reach them. Single auto bay will not help.

Highest 4/1 numbers I have ever heard of was 650k and he had ridiculous traffic with no competition in the touch-free space.

Amen. But dang, I bet it is far less than 5% of 4/2 gross $750k. Id bet it is closer to 2%. IN fact. I have never known a 4/2 that does those #'s. I have heard of a couple that do about $500k.

ALso, NO WAY you're gonna do entire project under $1.3

 

[Axxlrod]

Estimating around $750k gross a year.

That would be the busiest and highest grossing 4/2 in the world.

The equip distributor estimated the $750K number? That should tell you something...