Car Wash numero 2

[Joswhaha]

Howdy y’all
I purchased my first car wash in December and I have been working tirelessly rehabbing and getting it back to top notch condition. The majority of the work is done and the results have been outstanding in my opinion.

Now there is a second wash available, a bank repossession, 5/2. Magic wand self service, nexus automatics. I got some estimates of $380-400k for new and overhauled equipment. Everything needs overhauled. Busy street and this was previously a very busy car Wash.

The bank has financials that will show 1-2 years income. I am supposed to get this information tomorrow and make them an offer.


Do you guys have any special considerations I should make before making a solid offer on this property? Anything I should look for since I am still new to the business?

 

[MC3033]

You may already know the answer but I would inquire into why it was repossessed and from the sound of it, ran into the ground, if it was a busy wash.

 

[Joswhaha]

Thank you for insight.

From the information I got from the equipment supplier, the owners got divorced and the wife took the car wash but could not or would not do the work to keep it up. Over time, the equipment failed and she was not able to invest back into the property.

 

[Rfreeman]

If you can get it for the right price sounds like a good opportunity. Estates divorces partnerships breaking up all can lead to motivated sellers. Any idea what the banks previous note on the property was? That would give you a good indication of what they would want at a minimum but it's not in the same condition as before so let them know that and good luck.

 

[Joswhaha]

The bank was still owed about $860,000. My banker(a different bank)said they had a previous appraisal on the property for 1.3 million. The current appraisal is $865k.

They did have some loose financials with credit sales only. Gross 120kish last year, 160k in 2018, 180k in 2019.

 

[soonermajic]

Appraised value of $865k & the best yr is $180,000
$180x4 is $720. But you gotta put $$400k more into it?!! No way Id do this!

Also, id think you could pull the equipment from a 5 SS & 1 iBA & install new for under $300k...

 

[Joswhaha]

Agreed, I could not offer them 865k plus put 400k into the property and expect everything to work out. I’m hoping to make a deal that would put me around 800k all in. Otherwise, I will save my money for the stock market crash