Looking to Move/Invest in a Business

[sjay]

Hi Everyone,

I am glad that I came across this forum! I have been browsing the various threads on the forums the last few days and appreciate what I've picked up on so far. I live in Canada and am looking to relocate to down south US (Florida) with the family. Car washes up here are expensive (mostly due to real estate prices skyrocketing) and profitable (due to the fact that we have snow/salt in the winters).

I have been researching businesses that are semi-absentee with decent profit that I could purchase/invest. I have considered purchasing a multi-family building with a decent return on investment but have also noted car washes having a similar return. I find myself more attracted to a car wash business given that I am a car enthusiast myself and I appreciate the need the keep your vehicle clean and looking great.

I am hoping that some veterans can shed some light on what to look for in a business as far as a positive versus some things that are red flags. I understand that in most of the car washes, there is substantial cash that isn't reported, daily traffic count matters, and that the condition/age of the equipment is important (to name a few things). However, Im looking to gain more knowledge on what else would be important.

I appreciate any and all feedback.

Cheers

 

[I.B. Washincars]

I understand that in most of the car washes, there is substantial cash that isn't reported

I'm sure it happens, just like in any business, but I would say you are pretty far off base to think that most do.

 

[Eric H]

I have been researching businesses that are semi-absentee... I find myself more attracted to a car wash business given that I am a car enthusiast myself and I appreciate the need the keep your vehicle clean and looking great.

I understand that in most of the car washes, there is substantial cash that isn't reported

If you want to run it absentee or semi-absentee you probably aren't going to be successful and will very likely find that you have an unknown silent partner that is skimming $$ from you every day.

Carwashing have VERY little to do with the actual washing of cars. This is a property management or facilities management business.

If someone is trying to sell you their carwash and they say "It makes A LOT more money than I report to the government.." and then gives you a big wink, you should definitely buy the business and then immediately consult your accountant about the bankruptcy that you'll be filing in the next 6-8 months.

Owning/managing a wash is a difficult business, just like any business, with many moving parts. My friends that own landscaping businesses and plumbing and electrical companies are always shocked by the complex equipment in my back room. if I was paying someone else to fix that stuff I would lose a significant amount of profit.

Having said that, this is a great community and people here will bend over backwards to help one another. It seems like you are beginning your research. Looking from the outside this business seems simple and easy. It's not. Good luck in your search

 

[JAGraff]

Hi Everyone,

I am glad that I came across this forum! I have been browsing the various threads on the forums the last few days and appreciate what I've picked up on so far. I live in Canada and am looking to relocate to down south US (Florida) with the family. Car washes up here are expensive (mostly due to real estate prices skyrocketing) and profitable (due to the fact that we have snow/salt in the winters).

I have been researching businesses that are semi-absentee with decent profit that I could purchase/invest. I have considered purchasing a multi-family building with a decent return on investment but have also noted car washes having a similar return. I find myself more attracted to a car wash business given that I am a car enthusiast myself and I appreciate the need the keep your vehicle clean and looking great.

I am hoping that some veterans can shed some light on what to look for in a business as far as a positive versus some things that are red flags. I understand that in most of the car washes, there is substantial cash that isn't reported, daily traffic count matters, and that the condition/age of the equipment is important (to name a few things). However, Im looking to gain more knowledge on what else would be important.

I appreciate any and all feedback.

Cheers

You may find this blog post and the ebook download on the right of the post helpful: https://www.drbsystems.com/blog/new-investor-investing-in-car-wash/

 

[Waxman]

it's not uncommon for the owner of a car wash to work six or seven days a week. I worked seven days a week for the first 10 or 12 years and then cut back to six Days per week.

I enjoy working for myself and the challenge of finding new ways to improve the business. I enjoy working outdoors and being active. There's nothing like rinsing bays and emptying garbage barrels to keep you fit. At least a lot more fit than sitting behind a desk would get you. It's nice to be able to make your own schedule, But don't mistake this idea for not having to work hard, because you will with a car wash.

Most of your extra profits are best spent reinvesting into the business. The idea of unreported income is Talked about amongst potential investors and outsiders, but experienced car wash operators know that the best use of extra money is to improve the business, not to bury in coffee cans somewhere. that just happens in the movies.

The business of a car wash is an income producing asset. Professional owners operate with the highest standards.

 

[jfmoran]

Hi Everyone,

I am glad that I came across this forum! I have been browsing the various threads on the forums the last few days and appreciate what I've picked up on so far. I live in Canada and am looking to relocate to down south US (Florida) with the family. Car washes up here are expensive (mostly due to real estate prices skyrocketing) and profitable (due to the fact that we have snow/salt in the winters).

I have been researching businesses that are semi-absentee with decent profit that I could purchase/invest. I have considered purchasing a multi-family building with a decent return on investment but have also noted car washes having a similar return. I find myself more attracted to a car wash business given that I am a car enthusiast myself and I appreciate the need the keep your vehicle clean and looking great.

I am hoping that some veterans can shed some light on what to look for in a business as far as a positive versus some things that are red flags. I understand that in most of the car washes, there is substantial cash that isn't reported, daily traffic count matters, and that the condition/age of the equipment is important (to name a few things). However, Im looking to gain more knowledge on what else would be important.

I appreciate any and all feedback.

Cheers

Hi Sjay- let's start with, what model of car wash are you looking to buy?

Self-Serve, IN-Bay Automatic, a Self-Serve In-Bay combo site, Express Exterior, Flex-Serve, Full Service?

 

[sjay]

Hi Sjay- let's start with, what model of car wash are you looking to buy?

Self-Serve, IN-Bay Automatic, a Self-Serve In-Bay combo site, Express Exterior, Flex-Serve, Full Service?

I am looking at a multiple self-serve with 1-2 In bay automatic. Combo.

 

[jfmoran]

I am looking at a multiple self-serve with 1-2 In bay automatic. Combo.

You may need to define what you mean by semi-absentee. Most on here will tell you that self-serves and In-Bays, while you won't need to spend 8-10 hours a day every day at your site. you will be there every day. If you aren't, then you will need to pay someone to be there 4-5 hours/day.

That being said, an In-Bay with self-serves can be a decent business, in the right market. However, if you are in a market where there are competing tunnels, particularly express exterior tunnels, with the prospect of more tunnels being built, I would think long and hard before I pulled the trigger on that business. Florida is a market that s seeing a lot of car wash growth, but that growth is coming from tunnel business. If a car wash is for sale and it seems like a bargain, there's a reason why.

 

[sjay]

You may need to define what you mean by semi-absentee. Most on here will tell you that self-serves and In-Bays, while you won't need to spend 8-10 hours a day every day at your site. you will be there every day. If you aren't, then you will need to pay someone to be there 4-5 hours/day.

That being said, an In-Bay with self-serves can be a decent business, in the right market. However, if you are in a market where there are competing tunnels, particularly express exterior tunnels, with the prospect of more tunnels being built, I would think long and hard before I pulled the trigger on that business. Florida is a market that s seeing a lot of car wash growth, but that growth is coming from tunnel business. If a car wash is for sale and it seems like a bargain, there's a reason why.

Thanks for the reply. I am open to spending a few hours a day at the business. The one's I am currently looking at are not by any means cheap in price ($600-800k) they net about a 10% return on the asking price. With that sort of return its what I would probably expect to make working full time so spending a few hours a day would not be a problem. I have come across some where a part-time employee manages it, which ofcourse affects the profit the business is earning.

Unlike a gas station business, I see a future for car washes especially down the road re-investing into adding more automatic (maybe touchless which is popular here in Canada?) to expand the business.

 

[Starrwash]

I personally take offense to your suggestion that cash goes unreported. If that’s your plan rentals may be a better option, most operators are reputable and honest. Your suggestion makes me cringe.

 

[sjay]

I did not mean to offend anyone, I am simply stating what I've been told by folks. The purpose of me joining this forum and posting was to gain a better understanding and possibly some guidance from actual owners.

 

[Starrwash]

I understand and support your research. But under reporting income would be illegal here in the US. And the reference in my opinion makes the industry look bad. I suggest looking at figures on the books to ensure you will succeed. Most income these days is by credit card and leaves little to the imagination.

 

[MEP001]

FWIW I know a guy with 14 SS washes, and he is convinced that everyone who owns a car wash is laundering money. I never asked him if he does, but he's part of "everyone." I'm certain that he runs them as a tax write-off - the way he operates, he can't possibly be making any real money.

 

[sjay]

Would anybody be so kind to briefly explain their day to day routine with the operation/owing of a wash. Cleaning bays, refills, maintenance, etc?

 

[MEP001]

There's one basic, which is checking everything regularly, as often as daily. You don't want customers losing money or not getting product.

Cleaning bays varies immensely, it can be anywhere from once a week to four times a day. I go through and start each bay with coins often, at least a couple times a week.

I spend a good two hours a day just cleaning, but my wash is really busy and my customers are slobs. I used to run another wash where the customers were amazing. I'd spend barely 20 minutes a day there.

FWIW, I used to run a crummy old wash that was making about $1200 a month, and over a couple years I brought it up to about $14,000 a month. I spent 3-4 hours a day every day getting it there, other than a lot of tinkering it was all keeping it clean and making sure everything always worked. I'm also very generous with the chemicals.

 

[Greg_T]

We have a small wash in a country town, population about 1500. Average about $1500 (Australian dollars) takings per week, equates to about 20 - 30 washes per day. 3 self serve bays and 1 dog wash. We also seem to have pretty "clean" customers in general and good equipment that is pretty reliable.

We would average 1.5 hours per day, made up of 2 x 3/4 hour visits. Plus I need to spend extra time for repairs, upgrades etc. We also run another business that I spend about 55-60 hours a week in. If I was able to spend less time in that business, then I would love to spend more time at the wash and boost it along. But for now, that 1.5 hours per day + repairs + upgrades works well for us.

I'm sure bigger and busier washes take lots more time and effort.

 

[sjay]

I am currently looking at a wash for sale with 2005 Ginsan equipment for the Self wash and a Mark VII automatic machine. Does anyone have any specific information relating to this equipment? I did not want to start a new thread just to ask this question. Due to the lockdown, I am not able to travel to see the wash, but I am attempting to do as much research as I can before making a purchase.

I appreciate all the replies thus far!

 

[Randy]

Ginsan and Mark VII car wash equipment are top of the line. I wouldn’t be afraid of buying a car wash with that equipment installed.

 

[sjay]

Sorry to revive an old thread, I am actually flying out to Florida to go visit a few properties for sale. Any tips for what to look out for in person visits? I plan to see the machines/equipment/coin collection, the bays themselves, general property condition, roof etc.

 

[MEP001]

Since you started this thread, it's definitely best that you posted an update in it.