Hi everybody. I saved up 20K to get into the car wash business. What is my next step? Do I need to go to a bank and get a loan now? Im not sure what my next steps should be. Do I need to save more money or will 20K be enough? I am looking into buying a car wash that would cost between 300K and 2 million. How much money will a bank loan me? My credit score is 701
Is 20K enough to get started in the car wash business?
- Thread starter MachoMan
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Waxman
Super Moderator
Most commercial loans require a 25% down payment. Your 'budget' has a pretty wide swing; $300k-2 MM.
25% of 300=$75,000. 25% of $2MM=$500,000.
So, the short answer is no; $20k is not enough.
Maybe owner-financing is the way to go.
25% of 300=$75,000. 25% of $2MM=$500,000.
So, the short answer is no; $20k is not enough.
Maybe owner-financing is the way to go.
You Will be facing other issues also. Most banks will not lend for a wash unless the owner has 3 years running one. Being new you will at first have to hire most all service work. This can get costly quick. That could suck any profit away. It will be easy to run it for 2 to 3 years and have no money left. mama will not be happy with that. Not trying to be negative, just telling you what to expect.
Waxman
Super Moderator
I was able to secure my loan 16 years ago by owning the land and using that as collateral ( down-payment ). I also worked part time for a car wash chain ( shout out to Golden Nozzle/F.L. Roberts!!!). I did this while I was operating my detail shop full-time, but I was eager to gain experience. The bank liked that. I also was able to get an SBA 504 loan, which provides the bank with less risk/exposure.
Rfreeman
Well-known member
First, go work at a wash with the business model that you think you want to own i.e. ss, flex, express etc. If you can't get a job say at a ss site then ask the owner if you could help for free because your aspiring to get into the business eventually. Work at said wash for a couple of weeks and come back to us to see if you really want to get into this game. This isn't a easy business like the youtubers and tiktokers are making out to look like. It takes time and yes money or at least damn good luck to fall into a deal that you can get into with little to no money down.
Unless you have a lot of assets and can gain experience I wouldn’t expect a bank to even consider giving you a term sheet. Car washes are very hard to finance and even experienced operators struggle with loans (even SBA).
I would highly suggest working at a car wash. If you really want your own business you can look at mobile detailing (but will still need training)
I would highly suggest working at a car wash. If you really want your own business you can look at mobile detailing (but will still need training)
JMMUSTANG
car wash owner
You can barely buy a used car for 20 grand.
Greg Pack
Wash Weenie
Owner financing is a possibility. I got into my first wash with 7k in the early 90s. Owner did a lease purchase. It got me experience in the business.
tdlconceptsllc
Well-known member
Owner financing is the best way for you too go maybe lease a wash for 5-10 years with a option to purchase/ first right of refusal that's what I have done pretty much on my wash. You need a good lawyer to draw it up. But be prepared mentally to make no money the first several years.
Dan-Ark
Active member
Maybe a hand car washing service? Maybe even find a closed to lease to put it in. Wouldnt cost much to set up for hand washing. Or you might even be able to buy it and eventually get it going again. We got started about 3 years ago when I found a bank foreclosed 4 bay plus IBA. Paid 35,000 to the bank (who had foreclosed on a loan of more than 200,000 4 years previous). We spent another 20,000 or so and hundreds of after hours labor fixing mostly freeze damage, as it did not get properly winterized, painting, all new coin acceptors, timers, added cryptopay etc. If we had financed the purchase and renovation, 20 % would have only been around 13K or so...So anything is possible...albeit unlikely. The wash has paid us back a couple times over so far. Liked it so much did another one about year and half ago when spotted a for sale sign on a little 3 bay in a very small town. Similar selling price. We assumed the existing loan from the family that was tired of the whole thing... making about 1000 a month gross sales at the time... we are doing a little better, lots of new equipment added tri foam, spot free, and got all 3 bays running (new pumps and motors) even added cryptopay and revenue is up well over 50% and seems to still be growing. By the way, have not been able to find any more $35,000 washes in my area....Yet... LOL.
soonermajic
Well-known member
Rfreeman
Well-known member
HAHAHA the big upstairs is looking out for me for sure! Although I will say wash #3 in Forest Hill is looking like a steal so that might be 3!Most folks are lucky to find 1 steal, let alone 2! Except rFreeman@
Martins
Active member
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Just to put in my $0.02 and I'm sure most will be surprised but i got into my wash for only $15k down. Through my bank, and using a sba loan to buy the property etc. (all while it showd a 14-25k loss per year for the last 3 years.) so yes you absolutely can! You just have to find a run down wash that the owner is sick of and just wants it gone. And when you buy it be ready to get to work. For the first year i dumped every quarter it made back into it.
I would be interesting in learning more about how your process worked!
water guy
Well-known member
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Rfreeman
Well-known member
Getting started is always the hardest. In this case finding the 1st wash. My first wash i paid $175K for it and did just what Martin said put every qtr back into. 3 years later it appraised based off cash flow for $850K. I used it as collateral and put no money down on my second wash. Even rolled closing cost into the loan so I just signed docs and 2nd wash was mine so yeah anything is possible....
MEP001
Well-known member
Did you ever find your VFD?
