Potential first investment

[scausm]

Hello everyone. I appreciate your expert advice on this potential opportunity that I'm looking at--it will be my very first car wash. Seller has agreed on a $93,000 purchase price--land is included with the sale. The wash is a 3 SS / 1 IBA (Mark VII). The seller says the IBA is a 2006 model and has about 40,000 washes. He bought this business + land in 2006 for maybe $250,000. Everything seems to be in fair condition, with some signs of neglect, though everything seems to work as it should. It appears the lot will need to be sealed or repaved soon. What are your initial thoughts on this, given the information provided above and the photos attached? Many thanks!

 

[MEP001]

Why is it performing so poorly? What do you have planned to bring the income up?

Assuming those financials are accurate, it's not even netting $1000/month. The automatic's income is dismal. How long can you afford to operate at a loss once you're paying a note?

 

[Rfreeman]

Why or how did the seller manage to pay $250,000 for this wash? Assuming it was doing better than the numbers your showing or at least I hope so, but then sell it for $93,000??? Like Mep already said what's the plan to increase revenue? What competition is in the area? Don't get me wrong I'm not against buying a low producing wash with the idea of bringing up revenue because I have done it on both of my washes with good results. So whats your plan???

 

[Randy]

I found this car wash on street view and it’s not bad looking facility. I drove around the area and I can understand why it’s doing so poorly and that is because of the location. I also looked at some of the comments about the car wash online and none of them were favorable. I doubt if there is really anything you could do bring up the revenue. You’re paying about what the land is worth. If you’re looking for something to do to a hobby buy it, but you’re not going to make any money at it. But the price is right if you need a hobby

 

[Greg Pack]

You've heard the bad. Without knowing traffic counts and competition I can not say whether this site has future potential. I will say the price is reasonable based on a gross income multiplier and way lower than what it would cost to build.

Where is cleanup labor?

I also see repairs are quite high.

Will this be a turnaround and become a cash cow? I doubt it. But you might net a couple K per month with very little work and get you some experience in the business.

You also need a DIY mindset to own this business. If you pay people to fix everything you'll lose your butt on a low grossing wash.

It would be more interesting if owner wash was willing to do a lease purchase.