2 property foreclosure deal

[cbruton21]

Working to try to purchase 2 foreclosed properties. Would love some input.

Property 1
4 self serve with 1 empty bay ready for auto.
20 year old Autec auto.
6 vacuums
Traffic count is 14k per day
Property 2
3 self serve with potential 4th oversized Bay ready for auto but self serve now.
8-10 year old Autec auto.
6 vacuums
Traffic count is 8k per day

Currently utilities off. I am wondering what these properties should be bringing now and potential future with new auto purchased.

What % of traffic count can I rely on?

 

[OurTown]

Half of a percent more or less depending on how they are run. You might consider scrapping the 20 YO Autec but the 8 YO one might be savable. They are a lot of maintenance but are made of stainless. Hopefully you can get these for stupid cheap as resurrecting a closed down wash can be more expensive than most think. Do you have any car wash operating experience?

 

[cbruton21]

Doing lots of research. My plan would be to scrap and replace all equipment. $200k or more. Start fresh. I don't want to overpay for the current site but I am looking at the real estate and buildings less the equipment at $400k a piece. Not sure that the traffic count will suffice alone.

 

[OurTown]

Every area is different so I can't comment on the $400K for each location but $200K will barely buy one auto these days let alone SS equipment and vacs.

 

[cbruton21]

I'm really not wanting to lose my butt. I feel if I purchase at 400k each location and put 300k into new IBA and other equipment that I should be able to turn a profit.
I've been using a 0.0025% per traffic count. My thinking was that was for self serve alone. Will having a new IBA help increase that %?

 

[OurTown]

How long have these places been shut down? Also you should have some thinking time on why they shut down in the first place.

 

[cbruton21]

How long have these places been shut down? Also you should have some thinking time on why they shut down in the first place.

Only been shut down since June 1. From what I can tell the owner over leveredged for his other washes. No maintenance for 20 years for the IBA. I live down the street from one and it has a lot of people still trying to use it after shutting down. The properties are in great locations and structurally sound. To me the IBA is the worst. I could probably get utilities turned on and self serve would be fine. My only competition would be tunnel washes around but not other self service options.

 

[Rfreeman]

Over leveraged sounds like the previous owner over paid which means the bank is going to want to try to recoup as much of that over paid price. I've seen this a few times where bankers think bc they lend on a property that's what it's worth.

Do you know what the bank is asking for the washes or each one? If you don't, then this is all hypothetical and pointless really. Until you know an asking price you need to see if you can reach the prior owner and see if he would at least give you an idea of revenue. What did he pay for them?