Purchase or not?

[Stu]

Good morning all! Looking for some feedback on a ss car wash that is for sale near me. Here's what I know about it.

It's has 3 ss bays and a 4th outside ss bay. It also has a touchless wash bay. It has 2 vacuums. It's located in a small rural town of 2000 residents and sits on a major 2 lane highway. No other washes in this town. There is a convenience store next to it and a dollar store a block away. The town is located apprx. 15 miles from a large lake. The most recent traffic count I could find was in 2015 and it showed 3300 a day. What I know about the seller is he bought the wash about 3 years ago for his nephew to run. The owner had no intention of taking part in any of the business. The nephew let him down so to speak. It's been on the market for over 600 days and the asking price is now $80,000 down from $140,00. I walked the property with a realtor two days ago. Only 1 ss bay was "open" but was missing the wand. The other two bays had orange cones blocking entry into the remaining two ss bays. Only the outside bay appeared to be operable. The touchless wash bay had the doors closed. The 2 vacuums, a fresh water dispenser and the change machine were all "out of order. The realtor didn't have a lot of information regarding the equipment and said the owner has replaced some of the equipment (very vague). The realtor is in the process of contacting the owner to set up a day for he and I to meet at the business, and also contacting the distributor that services the wash to find out what's been upgraded and fixed. The financials I have show sales from as low as $2400 a month to $6300 a month. Yearly property taxes for 2016 were $2400. I asked the realtor how motivated the sell was and she said "very". The property needs some TLC and who knows what equipment replaced/repaired. Thoughts appreciated!!

 

[robert roman]

Unless you are looking for a hobby business and live close by, I would avoid this property.

Principal reasons are risk factors that adversely affect market value. For example, facility requires moderate capital improvement. Revenue is highly dependent on relatively few numbers of consumers (small market). Continuation of earnings is at risk for new owner. Owner is unlikely to stay and transition company. And so forth.

Even on the surface, the pros seem outweighed by downside.

 

[tdlconceptsllc]

So pretty much you could buy a 4/1 for 50-60K sounds cheap. You need to be looking at the last 3 Year’s of P&Ls and hope there correct. Sounds like it could be a hidden country Carwash that would might do good with the correct operator and equipment or either fall flat on its face and that’s why it’s for sale now. What kind of automatic is in there manufacture does it work. What kind of SS equipment is in there. Take a picture of entire overview of site & equipment room. Are you currently in SS business are you willing to work hard & long hours. This is a very expensive hobby as mentioned and some people make money in this and a lot of people loose money. I don’t know your area and what the site looks like so we are aiming in the dark for advice.

 

[I.B. Washincars]

You don't state the region, but since the auto is not working, take into consideration that it may have frozen.

 

[Stu]

Thanks for all the replies! I really appreciate it. No, I'm not in the SS business. Getting ready to semi-retire in the next couple of years. As far as the equipment, I don't know the manufacture of the automatic or what kind of equipment is in the SS. I met the realtor there a couple days ago. The building itself is in great shape, just needs some cleaning up. The equipment, I have no idea what I'm looking at! The realtor is getting a hold of the seller to arrange a day to meet him there to, hopefully, explain things to me. Also, the distributor that serviced the equipment is going to get the service records for the business. I think the company name is "Superwash", but not for sure. I do know that the current owner never had any intentions of operating the business and he lives several miles away. By looking at the property the other day, I can't imagine him being at the business but only a couple times a month. When I meet the owner, I'll take some pictures and get all the equipment info.

 

[MEP001]

By looking at the property the other day, I can't imagine him being at the business but only a couple times a month.

I hope you aren't counting on doing that. Running a wash like that successfully requires it to at least be checked every day. Forget extended vacations unless you have someone you can count on and trust to handle the money.

I have run very successful car washes and had the upkeep down to about 30 minutes a day for the most part, but it's still a daily check unless it rains.

 

[Stu]

Oh no...I would definitely be there regularly. The wash is fairly close to my residence.

 

[getnbusy]

The price is attractive but be careful. A carwash is a lot of work. The brand of equipment is important. The size of the bays is important. You also need to be mechanically inclined and not be afraid of installing a used machine(s). Since close to retirement, you might consider buying with the intention of leasing to someone else.

 

[Stu]

Thanks "getnbusy". I hadn't thought of the buying/leasing option. Still waiting on the realtor to get me more info and to meet with the seller at the property and the maintenance info from the company that serviced the wash. Trying to be patient!

 

[2Biz]

This wash sounds similar to the one I have except I don't have a touchless bay. I have 3 bays inside and 1 bay outside that a semi can pull through. It was built back in the 60's so its quite old...I purchased it in 2011 for more than the $80K you are looking at. Mine was in bad shape and neglected too....I live in a town with population 4400. There are two other washes in the same town. A Super Wash and another privately owned 4 and 1. There hasn't been a single month since I purchased it that it hasn't made a positive cash flow. With traffic counts and price, I don't see how you can go wrong. Pics of the wash and equipment would help...

Check my FB page for comparison...BTW, there are plenty of pics showing some of the upgrades I've done. Anything is possible if you are willing to put the time and effort into it.

 

[Stu]

This wash was built in 1998. The building is in good shape. The equipment ....that’s still to be determined . I’ll post some pics as soon as I can. Still trying to gather more info. The original owner ran the wash for 13 years. I’d like to get ahold of the financials from him. Any ideas how I could do it. Very greatful for all the replies!!

 

[robert roman]

Purchase or not was the question. Here is some more “or not” for you to consider.

“It's been on the market for over 600 days and the asking price is now $80,000 down from $140,000.”

“…..bays had orange cones blocking entry….outside bay….operable...(in-bay)….had the doors closed.”

“….how motivated….she said "very"….property needs some TLC and who knows what equipment replaced/repaired.”

“No, I'm not in the SS business.”

“This wash was built in 1998.”

“The original owner ran the wash for 13 years.”

In other words, the original owner operated during the good years and then sold the wash to someone who let it wear down to the point that nothing works.

You don’t need financials here because this wash isn’t generating any cash flow.

My suggestion is to get a real estate professional to help you so you don’t waste $80,000.

 

[2Biz]

I think you'll find most real estate professionals don't know squat about the mechanics of a car wash. Be careful if you go that route. ...Do you know anyone in the area that owns a wash and would be willing to give you an evaluation? Might be a better alternative. If you do buy it and need help, there is nothing about a CW that the good people here on the forum can't help you with.

 

[Stu]

Hey Robert! How about some up sides in favor of purchasing?

 

[sparkey]

If the wash is an old superwash the franchise is still in business and you can get parts for their stuff. Superwash used to be very popular in their day. Most of them no longer go by the superwash name. I purchased an old superwash as a second wash. I can tell you that if the automatic bay is like mine, and it probably is, you are very limited as to what you can do with it. The bay is to short, ceiling to low, and to narrow to put any modern machine in. My superwash automatic is an inverted L machine that runs on a fixed track. It doesn't clean near as good as my razor at my other wash. The superwash machine is an outdated machine. The selfserve bays are also small. I suppose if you are cheap enough people will still use it.

 

[robert roman]

“Unless you are looking for a hobby business and live close by, I would avoid this property.”

This was my first comment. I don’t see an upside other than an expensive job.

On the other hand, this person doesn’t know one end of a carwash from the other and there are people here that advised him to throw the professional real estate industry under the bus.

Good luck.

 

[Stu]

Using your preferred response format Robert.


"In other words, the original owner operated during the good years and then sold the wash to someone who let it wear down to the point that nothing works."

"You don’t need financials here because this wash isn’t generating any cash flow."

"My suggestion is to get a real estate professional to help you so you don’t waste $80,000."

In other words...

The owner passed away and the business was sold in an estate auction...

The current owner bought the property for the wrong reasons and is now wanting to sell it, and possibly some of the equipment has been replaced/upgraded??

Getting the previous owners financials because....just maybe....it was a successful business, and still could be?

real estate agent is already involved.......and....I didn't say I would pay $80,000

I've been helped a lot on this site already with all the responses. Even some PM's from a couple people and I appreciate that very much. All those that have posted have found something positive to say about the possibilities, along with some negatives. I like that a lot and appreciate the perspective. All except Robert. My guess is the only way this CW would work and be successful is if Robert was the owner or......If I hired you as a consultant. Your pretty transparent.

 

[robert roman]

You are the one that came here asking with "vague" expecting people to give you the answers you wanted to hear.

Some folks here are pretty adept at feeding into to this. Sometimes just to spit in someone else's eye.

I gave you some sound advice based on vague picture you painted. Take or it leave.

 

[tdlconceptsllc]

Hey I have been following this post and responded myself with a great response/questions as well as others on (equipment matters). Stu straight up in all honestly Robert is correct on the Vauge response myself and others have asked you what kind of equipment is at the site. Does all of it work? Pictures are worth 1,000 words and could help other people on here that would bend over backwards trying to help you free solid advise, but little detail equals little response. You can buy the place for 20,000 but if you got to spend 250,000 on new equipment for a country Carwash that’s going to be a small return. Good Luck and I welcome people to the form. You can have the best location at a Carwash with the worst equipment and chemicals and you can be out of business shortly i have seen It many times.

 

[MEP001]

Stu, you might want to read through this thread:

http://www.autocareforum.com/showthread.php?15341-Forum-Ignore-List

Given your lack of experience, I understand the vague questions. FWIW I have 35 years of extensive hands-on experience in the self-serve field. I have people calling me almost every day who I have to ask questions about their questions to help them effectively. I hope you'll just ignore the ones trying to call you out over nothing.