Anyone Bought a Car Wash from Auction Site?

[floppgean]

Hey everyone, has anyone here bought a car wash through an auction site? I’m just curious and would love to hear your experiences—whether it was a good deal or any tips on what to watch out for. Thanks in advance!

 

[Rfreeman]

Typically have an inspection day or days before the actual auction, go to it and be prepared or have someone that knows what they are looking at.

Watch the buyer premium fees typically a percentage of total sales price. Know what type of title you will get and that it will not be incumbered. Auction company should already have title opened with a title company or ask them.

Have your top number you are willing to pay for said site and stick to it. Don't go over just because of the excitement of the auction countdown and bids going up. Auctions are crap shoots especially if there are several people interested in the property but sometimes you can do well to.

In my other business, I brought the bank that foreclosed on the plant an offer of USD $1,950,000 (cash no finance contingency) from a client of mine. Written offer with proof of funds ready to negotiation or do a deal. The bank's auction company had done an appraisal on this plant and equipment and said it was worth $3.2 million. It ended up at auction, my client purchased the entire facility for USD $1,100,000 at auction

Good luck and stick to your number that you are comfortable with

 

[floppgean]

Typically have an inspection day or days before the actual auction, go to it and be prepared or have someone that knows what they are looking at.

Watch the buyer premium fees typically a percentage of total sales price. Know what type of title you will get and that it will not be incumbered. Auction company should already have title opened with a title company or ask them.

Have your top number you are willing to pay for said site and stick to it. Don't go over just because of the excitement of the auction countdown and bids going up. Auctions are crap shoots especially if there are several people interested in the property but sometimes you can do well to.

In my other business, I brought the bank that foreclosed on the plant an offer of USD $1,950,000 (cash no finance contingency) from a client of mine. Written offer with proof of funds ready to negotiation or do a deal. The bank's auction company had done an appraisal on this plant and equipment and said it was worth $3.2 million. It ended up at auction, my client purchased the entire facility for USD $1,100,000 at auction

Good luck and stick to your number that you are comfortable with

Thank you so much for sharing your insights and experience with auctions. It’s really helpful to hear from someone who has gone through the process and knows the ins and outs, especially regarding the inspection days, buyer premiums, and title details. I had no clue. I can definitely see how sticking to a top number is key -auctions can get pretty intense!

I’m not quite sure if I’m ready to jump into an auction just yet, but your advice is invaluable as I learn more about the process. I really appreciate you taking the time to share your story, especially the example of your client’s success. It’s good to see how well things can go if you approach it right!

Thanks again for the advice, and I’ll definitely keep all of this in mind as I continue on my car wash journey....Beep Beep!

 

[Roz]

I got into the carwash industry by accident via an auction. Purchased a rundown wash (5/1) in a good location. Had to close in 15 days of the auction. I had my financing already in place prior to the auction. I visited the site, I knew the assessed value from state records, but knew nothing about the industry. Owner gave little info but it was clear that the owner used a lot of duct tape to fix things so I knew the place needed a lot of work. Eight years later the only original parts at the wash are the walls. I have renovated everything else including the heated floors. Two WW Razors later I have never looked back.

I was the high bidder on another wash but the broker could not get the seller to close the deal as they had very different ideas on the value. Place needed significant work too but the bank gave the owner more time to try to sell the place. It eventually sold for more than the hammer price and a lot less than the listing price. I heard the owner was pissed (at broker and probably at me) as the auction did not generate a price close to their ask so they did not come pack to me when they came to their senses.

I considered another auction of four locations earlier this year. Places sold for less than accessed value. I liked the places but travel distance was longer than what I really want at this stage of my life. The seller in this auction was very transparent with the info which helped to generate more interest than most auctions.

Bottom line is that you can get a good deal via an auction but need to visit the site, do your home, and then have a plan prior to the auction. Also do not get caught up in the "I have to win" or you may overpay. There are a lot of washes for sale so you can find a good place via traditional listings too - just be patience and thorough in your analysis. Good luck.