Car Wash Renovation

[David Moore]

A 6/1 self serve car wash in my area was recently foreclosed. Same story - built a $800,000 self serve car wash with little experience and couldn't make the note.

The location is very good, bordering on great. In fact, I'm not sure the highest and best use is a ss car wash, but that's the current use.

I have the opportunity to buy for $400k, but the current owner gutted the carwash before he left. There is nothing inside the equipment room so all pumps, etc. need to be replaced. In addition, there is 1 automatic that needs to be replaced.

Question:
1. What is the average cost for new equipment per self serve bay.
2. What is the average cost for a new IBA.

I realize these are broad questions, but I'm just looking for ballpark figures to see if I'm getting a half way decent deal.

In addition, the car wash has been down for about 4 months and I'm wondering what if anyone has experienced this type of deal before.

Thanks.

 

[pitzerwm]

Is the land worth $400K, that's all I would pay in light of the missing equip.

 

[Wash-A-Roo]

I'm with Bill, pay for the land only.

 

[Greg Pack]

Well, if it is a nice,new, 6/1 with big concrete lot and gabled roof it would cost 300K minimum to build, plus the value of the land. 400K would be fair.

Having said that if you buy nice,. new equipment will cost you close to 300K. If he couldn't make it with a project cost of 800K, why will you make it at 700K? If I were in your shoes and can't figure that out I would not pay 400K for it.

 

[soapy]

I have seen some touchless automatics advertised for 60K without dryers or ACWs you could add those and get an auto installed for about 80K. You could get the SS side going for under 100k with new equipment. I would probably lean towards having more than 1 auto if the location is as good as you think. If a SS bay could be converted that would be a positive.

 

[JMMUSTANG]

If the lot is big enough I would look at putting in a small express tunnel instead of the IBA.
Cost more but I think it would be more profitable.
I had a friend do this a few years ago.
On slow summer days he washes between 40-60 cars with 1 person. On busy days he'll wash 120-150.
He's been very happy.

 

[MEP001]

You should be able to get self-serve equipment for $15-25,000 per bay, varying more if you include things like credit card acceptance. Automatics vary a great deal, between $50,000 and $200,000. Seems like more people are looking at express tunnels lately - I know of three long-time self serve operators who are seriously considering it.

 

[Eric H]

"the current owner gutted the carwash before he left"
Does that mean that he also took the boilers?

Are you going to be able to reuse the meter box hulls? Installing new hulls is not a fun/easy job. It will add 3-4 days to an install.

I think that by the time you are done your still going to be in the $700,000 range.

 

[PaulLovesJamie]

I agree 100% with all replys.
Your comment about "best & highest use," combined with a cost of approx 700K to open up, tells me that Bill hit it right on the head: Find out what it would cost to buy just the land, I wouldnt pay much more than that.

I'll bet you a pizza on this though: someone will pay the 400, then go out of business within a year.

btw, "cost of the land" means without a building on it. Consider what it would cost you if you have to remove the building in order to use the land for something other than a CW.

 

[diycarwash]

If he couldn't make it work for 800k. I wouldn't try to make it work for more than 400k. The equipment being gone is a deal killer to me. Let someone else buy it and pick it up after they foreclose on it in a couple of years.

 

[Greg Pack]

If the location is truly "great" (avg. 150 cars plus/day)than the express tunnel is probably the way to go.

My concern is that there is something wrong with that location. With 800K project costs on his 6/1, He should have been able to cash flow with about a 150K yr gross. Those numbers are not indicative of a great location. Maybe this guy was a meth addict, I don't know.

Express tunnel is the new black in the carwash business, but it will not work everywhere. I see more and more operators trying to pound that square peg into the round hole. Who wants to hassle with a full time employee to wash 100 cars in a day? I'd rather just have a second automatic.

 

[rph9168]

I would pretty much agree with everything said though I am not sure about the express tunnel. Do you know anything about the history of the wash? Why did it fail? Was it poorly operated? Did the equipment not perform well? Was there other reasons than the wash itself? Divorce? Bankruptcy? Death in the family? Personal problems? These are all things that you must find out before considering purchasing it for any amount.

I worked for a company that at one time had 38 full service washes in six states. They never built a wash from scratch. All washes were purchased at pretty much deeply discounted prices from the owner or the bank. They were very careful and always knew the history of the wash and owner before purchasing it. Somethings you can fix like lousy wash performance or poor management. Somethings you can't like bad access or location.

One thing they always considered was, if this doesn't work out (and some didn't) could I sell the wash for what I paid for it plus improvements? If not they usually passed.

If you buy this and put money into it will it be worth what you paid or will you be in the same boat as the previous owner?