Business owner question?

[rightaway]

Is it possible to buy a self service car wash with little to no money down? I have always wanted to own my own car wash. I want to start small with a self service and work my way up. My problem is that I don’t have much money. I lost all my money, 401k, saving and sold all my toys for my last business that failed. A car wash is a dream that I always had. When I travel to new area, I check out what kind of car washes are out there. I get monthly magazines and new letters about car washes but I never see anything with advice about buying a used car wash or how to find a used one in the area. I have been trying to do research by reading this website and other websites this subject but I never get an answer. If there is another web site that would have more info please let me know about it. Thanks for you time. I’m looking forward to see what you guys have to say.

 

[1carwash1]

I'll throw my hat in this ring and give my 2 cents worth. The self serv business has been impacted by the economy and express exterior and to a certain extent peoples lack of desire to "do it them-self" . In many areas around the country where the express exterior has taken hold, it seems like self servs are closing up shop or going back to the bank. What might appear to be a tremendous buying opportunity may, in actuality, turn out to be a poor business decision. In some ways this business is like musical chairs or to put it another way "don't be the last man holding a mortgage". There's no doubt about it, there are some screaming deals to be had on self servs, but, will they be able to attract enough business to survive is anyone's guess. If I was convinced that the self serv business could bounce back to earlier numbers, I would be picking up as many deals as I could. It's been my perception that a number of bank owned SS car washes appear to have been purchased by newbies, not car wash veterans. I think some of them are in for a rude awakening. Don't let the lure of easy money or perception that this business requires very little time or devotion to succeed dissuade you from making an intelligent business decision. For the most part, car washing is a one dimensional business; and if the concern fails there is very little alternate use for the building. If you are serious about car washing, I suggest hiring an experienced car wash consultant.

 

[Waxman]

What was your other business that failed? Why did it fail?

How will you run a carwash that you know very little about? It's a tough business but can be fun, too. The learning curve is steep; I started out thinking I was educated and ready ( I worked at a carwash first) and I am still surprised at and consistently reminded of all I DO NOT know about the carwash business.

How can you buy any business with no money down? Doesn't seem very likely and banks have tightened up on lending.

Any business with that low a barrier to entry (zero down) cannot be expected to be very profitable, if at all.

 

[rightaway]

my first business was a tire business. it did good for a few years but i couldnt get anybody through the door. my rent got raised, tire prices went up. wholesalers went out of business.

I have some money down and I was thinking of I could get a small business loan. I have great credit.

is there a website that has listing for bank owned or private owned car car washes?

 

[rph9168]

I would have to respectfully disagree with your assessment of the self service market. No segment is thriving that well and I think the economy has been pretty brutal for all of car washing. One of the main problems with some self service units have been lack of proper maintenance and neglect. The problem with some of them is much like other formats - bad location and/or poor management. I think if one can find one at the right price in decent shape or capable of being renovated reasonably in a good location it would be worth a shot. I would recommend that someone with knowledge of the industry would be essential in making an intelligent choice.

Now for the bad news. With little money to invest even with outstanding credit I doubt you could get financing. In addition you would need money to get the wash back in shape. Many banks are stuck with them but they are not giving them away. If they do they sell them at a loss they sell them as is and you still would need some money down for them to consider financing them. I hate to rain on your parade but with the past business failure and no money down I highly doubt you could acquire any wash without a substantial down payment.

 

[MEP001]

I don't know if it's a general rule or just local, but here you can't get a car wash loan of any type without at least 30% down. Some banks want 40%. Your best bet might be to find an individual willing to lease/finance a wash to you.

rph, we're in an excellent location and I certainkly know how to manage/maintain a SS wash, and we're not doing well at all right now. I'm sure the economy has played some role in that, but I'm certain that the $3.4 million tunnel with free vacs less than two miles away had a lot to do with it. So that's another problem to consider; even if you're lucky enough to buy a wash that needs little to no work and is making a little money, someone can build down the street and take half your business.

 

[robert roman]

“Is it possible to buy a self service car wash with little to no money down?”

Just change the question – is it possible to buy “any” small business with little to no money down?

To open any retail store or service center, you need to have at least operating capital to cover expenses until cash flow positive.

So, it is not possible to open a wash with little to no money down.

Even if the bank is willing to risk lease to purchase or to have you open and operate it or keep one operating until sold, there are expenses as well as operating capital that will need to come out of your/friends/relatives pockets, not the banks.

Angel investors want to own virtually all of a business and you do all the work for a little piece of the action, so little hope with this approach.

Unfortunately, in today’s environment, recent failure and no carwash ownership experience will hammer capitalization, high risk. This means expensive debt service; high credit rating, low loan-to-value, big fees, high interest and most likely a balloon payment.

Sounds like a good idea for MLM scheme.


But wait, there’s more!

 

[mac]

What the others have said is pretty much spot on. If you dig around enough I'm sure you can find a closed or about to close wash and lease it, or a bank owned one that you can operate till it sells. The big issue will be the repairs that you'll need to do. Remember that if it failed as a business, the previous owner most likely put off a LOT of repairs. And being new you'll have to have someone else do them for you. I don't want to crush anyone's dream, but I also don't want to see an innocent buyer lose money either. How about this, use the advice here and look to see what's avail;able in your area. Stop at every repest, every wash within 20 miles and leave a note under the door or get a number to call. I got into a wash a number of years ago with 5K down. I borrowed money from everyone that I knew, and some that I didn't, and bought out a partner in a failing wash. Six years later we sold and I put 190K in my account. It can be done, just won't be easy.

 

[pgrzes]

DONT DO IT!!! You will most definitely be able to find a great deal right now. But if you finance everything you will be fighting maintenence expenses, debt service, and lack of business right now. You wont get a deal on a thriving carwash right now. So to build business is going to cost you $$$$ Lots of it. I did exactly what you want to do 8 years ago. It has been a disaster since the downturn in the economy. If you cant buy it dont do it!! I was fortunate enough to leverage a buyout from my bank, and now can start a turnaround, but with the debt service I had I couldnt breathe!!! I am sure its not what you want to hear, but you are looking to hear facts from experience. You can surely message me and I would be happy to discuss further my experience.