ToastedNotBurnt
New member
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- May 18, 2022
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Hi,
New member here, I've been reading as much as I can in research for a new business opportunity. I have an opportunity to acquire a corner plot on a traffic light w/ 25-30 MPH traffic. AADT is ~15,000 and the area is a college town so business is dead in the summer. Ingress/Egress is great. Nearest competition is ~2.5mi away.
We're in the Northeast/NE area. Plot size is half an acre (small), so I'm unsure what type of car wash should be built. A compact tunnel? IBA (Need multiple?). MEP001 has mentioned building 1-2x IBAs from the ground up is a recipe for failure. Is there an alternative w/ this plot size? Self-Serve seem to produce too little gross income to be worth it w/ a build but that may be ignorance talking.
Costs boils down to 150k land, 200k for Razor Edge IBA, 300k for construction and some other stuff getting us to ~$850k. Could easily be more and I have no idea how much a tunnel or anything besides an IBA would cost. We have a strong connection w/ local authorities due to pre-existing business/connections so those aren't as big concerns (zoning laws etc.).
My main concern is about expected revenue. W/ an AADT of 15,000, 0.3% Capture rate, 305 Days open, 50% Profit Margin and $7 avg ticket, we're looking at about $46k net/yr. $850k cost puts this investment at a Cap Rate of 5.4% which is terrible for something that is not passive (Not a delusional new comer, I understand how hands on this business is, especially when first starting). Are my variables off?
Capital isn't really an issue, we can do $2m+ even w/ banks requiring high down payment, the issue is really the plot size. We know the standard recommendation is to retro-fit an old car wash for +EV, which is very reasonable. However, current goal is not to shoehorn ourselves into buying a car wash but rather determining optimal usage of this location.
So, main questions:
1. W/ such a small plot, is IBA the way?
2. Are revenue projections about accurate? I see higher capture rate quoted quite often but Waxman quotes 0.3% as what he used but the data I looked at did suggest it heavily varies and the plot is good and our online advertising/curb appeal etc. will be good as well.
New member here, I've been reading as much as I can in research for a new business opportunity. I have an opportunity to acquire a corner plot on a traffic light w/ 25-30 MPH traffic. AADT is ~15,000 and the area is a college town so business is dead in the summer. Ingress/Egress is great. Nearest competition is ~2.5mi away.
We're in the Northeast/NE area. Plot size is half an acre (small), so I'm unsure what type of car wash should be built. A compact tunnel? IBA (Need multiple?). MEP001 has mentioned building 1-2x IBAs from the ground up is a recipe for failure. Is there an alternative w/ this plot size? Self-Serve seem to produce too little gross income to be worth it w/ a build but that may be ignorance talking.
Costs boils down to 150k land, 200k for Razor Edge IBA, 300k for construction and some other stuff getting us to ~$850k. Could easily be more and I have no idea how much a tunnel or anything besides an IBA would cost. We have a strong connection w/ local authorities due to pre-existing business/connections so those aren't as big concerns (zoning laws etc.).
My main concern is about expected revenue. W/ an AADT of 15,000, 0.3% Capture rate, 305 Days open, 50% Profit Margin and $7 avg ticket, we're looking at about $46k net/yr. $850k cost puts this investment at a Cap Rate of 5.4% which is terrible for something that is not passive (Not a delusional new comer, I understand how hands on this business is, especially when first starting). Are my variables off?
Capital isn't really an issue, we can do $2m+ even w/ banks requiring high down payment, the issue is really the plot size. We know the standard recommendation is to retro-fit an old car wash for +EV, which is very reasonable. However, current goal is not to shoehorn ourselves into buying a car wash but rather determining optimal usage of this location.
So, main questions:
1. W/ such a small plot, is IBA the way?
2. Are revenue projections about accurate? I see higher capture rate quoted quite often but Waxman quotes 0.3% as what he used but the data I looked at did suggest it heavily varies and the plot is good and our online advertising/curb appeal etc. will be good as well.
