Leasing a 6 Bay Self Serve

[water guy]

Thinking about leasing a Self Serve anyone had any experience in leasing one.

 

[Earl Weiss]

I currently lease the property where my 8 bay and Tunnel are located.

 

[mac]

If you are going to lease a 6 bay you are just buying a job. Unless the place is grossing over 200K I don't see the point. If you do go ahead with this make sure in the lease that you have the right of first refusal in case the owner sells.

 

[pgrzes]

Been in my one location a 7 & 1 touchless for almost 15 years. The location is celebrating 50 years at this location this year. Same landlord since beginning. Overhead is key in my opinion.

 

[tdlconceptsllc]

I lease my current site with a option to purchase and first right of refusal from my family. Been at the same site for 12 years, been leasing for 6 years now. However I don't suggest it unless you are very familiar with it and the numbers because i am sure it needs renovating and I plan on purchasing the site i lease now. I just don't like the idea of fixing up a site spending 100k plus on equipment and you never own the real estate. We had a Lawyer draw up a very detailed contract to cover the landlord and tenant. Like leasee is responsible for grounds on day to day basis,he or she can remove installed equipment at end of the lease, landlord must be paid XX amount by the 10th of each month or subject to a fee,leasee is responsible for all mechanic repairs, leasee has option to purchase after 4 years or in the event of death of landlord ect ect. Sometimes leasing can be a descent option but it has to be a rock solid location as it sits in my humble opinion to justify going through the expense. Good luck. (Give us some more detail about the place not enough info to get a lot of response)

 

[Greg Pack]

I Kind of agree with Mac in that you're buying a job of sorts. I don't really have a problem leasing as long as its' lucrative enough along the way and you have right of first refusal. However, many car washes are sitting on dirt that has a higher value as something other than a car wash. You might bust your butt for five years to get revenue up and a developer buy the property out from under you to raze the building.

 

[robert roman]

Thinking about leasing a Self Serve anyone had any experience in leasing one.

Leasing means buying business-only and agreeing to a triple net lease (rent, insurance, and property taxes) for a specific period(s) and conditions (i.e. rent escalator, opt out, buy option).

If the lease is not being used as a vehicle to eventually buy the real estate, the purpose of buying business-only would be to obtain the cash flows (ROI).

You didn’t ask a question, so I’ll offer up an opinion.

My experience mirrors some of the comments that caution. I haven’t seen many self-serve with sufficient cash flow for 20-year triple net, sale-leaseback.

 

[water guy]

Thanks for all of the replies. I have taken care of this carwash for 5yrs and the gentleman sold it to another person and after 3yrs this gentleman wants to sell it because of his health.its in a good location and I know the wash very well .the only problem I seem is that Im 35 min from it .but I have very dependable person cleaning and taking care of it. Forgot to mention I have owned a 4 bay and automatic for 14 yrs in another town.

 

[water guy]

If anyone wants to call me about this feel free to pm me for my number. Thanks Again for all of your help and comments this is an awesome site for carwash owners .

 

[Earl Weiss]

Successful businesses lease all the time. Walgreens comes to mind. At the end of the day it's about making money. If you lease you have other concerns as noted.
1. Option to buy at an ascertainable price
2. Right of first refusal
3. Extension options

 

[Roz]

Issues are short term vs long term plus depends on how much investment you expect to make in the place to repair or replace equipment or any structure. Frankly in a lease you are working for the landlord when it comes to a car wash since you need to make a significant investment (at times) to keep equipment upgraded or working. Hard to take it with you. More importantly if you look at car wash transactions available online the washes that own the land get a much better price than a car wash business paying a landlord. A sale of a car wash lease is just a simple 1-4 times NOI depending on the details of the place, length of lease in place, and state of equipment. Not building equity but you will have a job. Perhaps you want to approach the land owner to see if they want to sell? I am guessing that you are getting a very good deal because seller is over a barrel (which you will over in the future).

 

[robert roman]

If anyone wants to call me about this feel free to pm me for my number. Thanks Again for all of your help and comments this is an awesome site for carwash owners .

Maybe next time you can tell us up front you have 14 years of ownership experience so some of us don't waste our time.

 

[water guy]

No one wasted there time except you making that silly comment. I have never had an opportunity like this proposed to me and the situation is a little different so any comments would be appreciated. You can never know enough in the Carwash business and I learn something new all the time.

 

[soonermajic]

Water Guy. If owner wants to sell & you are already somewhat running the place, why do n't you just buy it?