To DO/NOT DO list on self service/auto bay purchase?

[Yeaux]

We are currently looking and will probably purchase two self serve car washes with an IBA at each location. One location is a 4 bay self/1 IBA and the other is a 3 bay self/1 IBA.

With your experience in purchasing used location what are some of the do’s and don’ts. I don’t want to overlook questions to ask and things to consider during the negotiation stage of the process.

 

[Dan kamsickas]

1)Verified income only. Tax returns for 3 years. P&Ls can be cooked pretty easily
2)Get manufacturer, model, and serial number(if possible) of all equipment. Pictures are great also. Contact the manufacturer(if they still exist) and find out if the equipment is still supported and if so, for how much longer. It doesn't matter how handy you are if you can't get the parts. Rebuilding/Reengineering an obsolete piece of equipment just delays the when not if it needs to be replaced and when is never cheaper
3)Find a good tech or two to go through the stuff with you. If you wouldn't buy a house without an inspection, don't do it with a wash

 

[Zal]

Post IBA info with pics on this forum and you will get feedback on serviceability, reliability etc.

 

[OurTown]

Just to be sure, you are buying the land with them right? Is the income year over year trending up or down? Are there any new express exterior washes nearby, being built, or in planning? You can contact the city to see if any have been approved recently. They are sprouting like weeds around here.

 

[Yeaux]

Just to be sure, you are buying the land with them right? Is the income year over year trending up or down? Are there any new express exterior washes nearby, being built, or in planning? You can contact the city to see if any have been approved recently. They are sprouting like weeds around here.

I know for a fact there would be no express washes being built in those areas. The towns are big enough to support the current location(s) in each town but in no way would anyone invest in an express wash in these areas. It’s a no brainer that anyone investing in an express, the return on investment just isn’t there.

The land is included in the purchase. One location sits on .7 of an acre. The second sits on 1.75 acres.

Thanks for your response.

 

[Yeaux]

Post IBA info with pics on this forum and you will get feedback on serviceability, reliability etc.

Zal, I will get picture in the next few days and post up. Thanks for your response.

 

[Yeaux]

1)Verified income only. Tax returns for 3 years. P&Ls can be cooked pretty easily
2)Get manufacturer, model, and serial number(if possible) of all equipment. Pictures are great also. Contact the manufacturer(if they still exist) and find out if the equipment is still supported and if so, for how much longer. It doesn't matter how handy you are if you can't get the parts. Rebuilding/Reengineering an obsolete piece of equipment just delays the when not if it needs to be replaced and when is never cheaper
3)Find a good tech or two to go through the stuff with you. If you wouldn't buy a house without an inspection, don't do it with a wash

Dan, appreciate the response. Definitely looking into all of these mentioned.

 

[Dan kamsickas]

The towns are big enough to support the current location(s) in each town but in no way would anyone invest in an express wash in these areas. It’s a no brainer that anyone investing in an express, the return on investment just isn’t there.

Have you been paying attention to the tunnel segment? They're building them within blocks of each other. You're making an assumption I wouldn't be comfortable making.

 

[Greg Pack]

I know for a fact there would be no express washes being built in those areas. The towns are big enough to support the current location(s) in each town but in no way would anyone invest in an express wash in these areas. It’s a no brainer that anyone investing in an express, the return on investment just isn’t there.

I would say that if the market is big enough to support a chik fil a, starbucks, or regional grocery chain you are in a zone of concern. They are chasing smaller and smaller markets to figure out what is too small. Locally there is a community that has two built in the past few years and the biggest retail there is a walmart neighborhood market.

Income needs to be verified through tax returns. The GIM multiplier of 3x-5x works for carwashes as a sanity check. The higher the gross, the higher the multiplier you can use and it still make financial sense. Old equipment might still be fine if it's well cared for.

Once you get it under contract and during due diligence post some pictures and we will be glad to give our opinion FWIW.