n00b looking to buy - point him in the right direction?

[YouWash]

New to the site, first-time poster - be gentle.

I'm an experienced investor, residential real estate generally, but have been eyeing other income-producing properties the last year or so. Typically we've been looking in the storage (isn't everyone?), laundromat, commercial cleaning, etc. We haven't pulled the trigger on anything yet, but a seven bay (2-automatic, 5 self-serve) just came across my desk, and it's intriguing. I know this has been covered here countless times, and I'll start sifting through all of these posts, but some questions for those of you who've been at this a while:

- any particular posts you think a newbie should pay attention to?
- general formulas to quickly establish value.profitability? I saw one post that suggested 3-4x of gross
- I don't even know where to begin to better understand operating expenses - overhead, etc.
- what do you wish you'd known when you first started?

 

[CarWashBoy]

Be Ready to be there and Spend Money.. Any Car Wash without someone there at least 8 hours a day, is a Flop.. Many will disagree.. but compare your numbers vs. the ones that have that attendant or owner on site 8 hours a day Minimum.. Rain, Snow or Sunshine.. I bet, 90 % or more of Self Serve Owners on this Forum will Disagree and have lots of excuses.. WOW! Also, Use HOT WATER on Every Function.. Do you take a shower or wash your hands in COLD WATER? LOL.. If you want to Kick Ass and be Successful, make it Better than the Competition, be the Competition, and let them compete with you.. Price is not a FACTOR, if you got what the customer wants.. I travel around the county a lot, and 9 of 10 SS Car Washes are a EMBARASMENT to our Industry.. The customer sees, worn out brushes, faded signs, poor lighting, still taking coins, no Tap to Pay, or Credit Cards, on and on.. WOW! Just my 2 cents, the SS CAR WASH has a BAD Reputation, and I Certainly know WHY.. Step it UP, and you will have more MONEY to take to the BANK.. Also, it will Enhance our Reputation! When I give someone a Free Wash to our SS that hasn't been there before, they look at Me Like, Does it work? LOL!! Sorry for the Rant, but I hope we can fix it down the road.. I'm ready to get the Replies of "IT won't work for ME" .. LOL..
Doug

 

[G WASH]

CarWash Boyee has it 90% right. You have to be there when the wash is busy to make the big bucks. You have to use hot water and premium liquids, soaps etc. and price should be higher than the other washes that barely try. You need to be like the soup Nazi in New York. You know your product is heads and tails better than the other washes so you act like you are doing them a favor, not the other way around. It drives sales. When i started 34 years ago i would do cart wheels to be nice and helpful and it was sickening the hoops i jumped thru and the crap i allowed. You know how they say when you go to prison pick out the toughest guy and go up and kick him straight in the balls and get ready to have your ass kick later but show them your just crazy enough to go postal...same thing goes with the big guy that shows up to spend 5 $ and then stay in your wash bay detailing his tacky ride while others are waiting in line. you have to go straight up and loudly tell him to pack it up and to never set foot on your property again and that he refuses to leave that you will arrange him an escort from the cities finest. And follow thru. It's not fun but it lets everyone else know that you ARE NOT PLAYING, YOUR SERIOUS...you won't have to be there 8 hours a day if you rule the place. Instead of the other customers being shocked by your behavior they are in fact comforted in the knowledge that rules are in effect and no one is excluded. TOSS 1 OR 2 A WEEK. My bays make twice the national average so maybe i am on to something....but i do use cold water rinse, It gets the soap off the car in half the time as hot water and isn't that the purpose of rinsing?

 

[Dan kamsickas]

1) Any form of carwashing business IS NOT a passive income stream. Some weeks you may be there a few hours a day, others will seem like you've never been home. You need to put a human face on that building. Something as simple as dropping a few coins in the meterbox when a customer is using a bay can go a long way.
2) If you are not mechanically inclined, or planning to become soon, don't even think it. Most laypeople have no clue how many parts and pieces it takes to "just put soap on a car". Far fewer know how to those parts actually work together. Paying a service company is a reality for some things but paying one for everything is a sure fire way to not make money.
3) Make sure you get at least 3 years of financial records or at the minimum tax returns. There are still far too many shoe box accountants in this business.
4) Everything must work all the time. That may sound unrealistic but it needs to be the goal. Closed bays and out of order signs are horrible messaging to customers.
5) Pay for a good tech, or two, to do a complete evaluation of all the equipment prior to even considering making an offer. Some sellers I know have split the cost because they know it's well maintained. Others have strongly resisted because they know the truth. I've had far too many calls from new owners who tell me "the previous owner swore the equipment was great" when it is actually a cobbled mess. There have also been several manufacturers who have closed their doors in the past decade or so and some of the parts are impossible to get. Nearly daily, I received calls from owners who have "X" brand equipment and are looking for a work around on it. Some times I can come up with a fix, but most times there isn't one.
6) As CarWashBoy said: Appearance matters. Perfect example: There is a 3 & 1 a couple miles from my house. The long term owner kept everything functional, but that was it. Ugly parking lot, dim lighting, grubby walls, faded signage, plain building, etc. My wife absolutely refused to use it even thought I told her the wash worked fine and was never really that busy so no lines. Two years ago a new person bought the wash. Did not change a bit of equipment except adding credit card acceptance in the bay. He did have the parking lot sealed, painted the building, new signage, lighting, etc. Now she uses the thing all the time because "That's really become a nice wash!". Next to nothing is functionally different. He just put some lipstick on the pig.

 

[Rfreeman]

New to the site, first-time poster - be gentle.

I'm an experienced investor, residential real estate generally, but have been eyeing other income-producing properties the last year or so. Typically we've been looking in the storage (isn't everyone?), laundromat, commercial cleaning, etc. We haven't pulled the trigger on anything yet, but a seven bay (2-automatic, 5 self-serve) just came across my desk, and it's intriguing. I know this has been covered here countless times, and I'll start sifting through all of these posts, but some questions for those of you who've been at this a while:

- any particular posts you think a newbie should pay attention to?

Not the answer you want but basically this entire forum is great for any newbie. A lot of wealth of information but more importantly a lot of good people on here willing to help so long as you post as much information as possible. If there is ONE thing a newbie needs to know, NOT A PASSIVE BUISNESS. You won't be "just showing up picking up cash and going to the bank"

- general formulas to quickly establish value.profitability? I saw one post that suggested 3-4x of gross

3-5x gross seems to be how these things are bought and sold or at least in my area. Of course you have few exceptions for highest and best use cases if you know the land is of higher value maybe your willing to pay more for that eventual buy out (used this strategy on my second wash and just sold it to the state). Typically, your expenses can run in the range of 35-45% of gross revenue depending on part of country your in. This wouldn't include debt service or labor so you need to factor that in or at least factor in your time and what its worth vs. your return.

- I don't even know where to begin to better understand operating expenses - overhead, etc.

there vary by location. Guys in the north from what I know have higher utility rates and higher heating cost then someone like me down here in Texas but they also have higher prices to offset these cost. As mentioned above 35-45% of gross revenue.

- what do you wish you'd known when you first started?

For me personally, I am not a full time car wash guy. I have full time job, family business, that affords me the opportunity to invest in real estate as my hobby and grow wealth. I can't say there is something that I had known before taking the jump but glad I did because I enjoy it and it provides more than acceptable returns for me and my goals.

This isn't a hard business but IT TAKES TIME ON THE PROPERTY. 3 simple rules to be successful:

1.) Keep it clean, working, and bright at night.
2.) Be generous on your chemicals
3.) Have a presence

In my opinion you do this and people will use your wash, tell other people, and come back. Oh before I forget, this businesses isn't for the faint of heart, by that I mean, some people will treat your property like a dump and just unload and I do mean unload their crap in your trash or dumpsters. If scenarios like this make your BP boil over to the point of a heart attack, walk away.......