To self serve or not

[PEI]

So I'm looking at a site that originally had 3 lw4000's and 4 vac islands. All the equipment has been removed. The projected daily car count is 48 cars per day. I was planning on putting in a used lw4000 that I already have and JE Adams vacs that I already have. The question is what to do about the other two bays. I could wait and see if the numbers work for a second iba, or I could turn them into self serve bays with equipment I already have. There is a 8 bay self serve about a block away. Suggestions? Thanks in advance.

 

[mac]

Good question. My first reaction is, wow, did that PDQ salesman ever do a job on the previous owner. Three automatics and a projected car count of 48 per day? Somebody got hosed. A lot depends on the market. If the 8 bay is a well ran place, and you are in a relatively small market, I wouldn't do the self serve. If it's a large market, and the 8 bay is shoddy, and you already have the equipment, go for it. You might consider finding a detailer who would rent a bay or two, and act as an attendant. Good luck.

 

[PEI]

Thanks Mac, I hadn't thought of renting the other bays out for detailing. That's a good idea.

Oh, the 8 bay is well run and maintained.

 

[robert roman]

“Suggestions?”

Yes, normally this situation would call for highest and best use analysis. In this case, the first two elements, legally permissible and physically possible, can be skipped, leaving financially feasible and maximally productive.

Feasible means the use must generate adequate revenue to justify costs (i.e. acquisition, construction, retrofit) plus a profit for the developer. This isn’t irrelevant because the subject can no longer be considered improved since all the equipment has been removed.

Financial feasibility depends on market size, sustainability, and potential value of area or location whereas maximally productive means the use must generate the highest net return to the developer.

48 CPD X 26 days X $8.50 X 0.6 / 1.5 = $4,243 maximum allowable monthly payment

In other words, if the total debt service for acquisition and improvement is equal to or less than $4,243, the investment would make financial sense.

Of course, this brings up the issue of business operating risk; will the site generate sufficient gross sales. Obviously, it did not or the property would not be vacant.

So, the question becomes will this site be attractive enough to generate sufficient gross sales with only one in-bay in a formerly closed business?

I would consider diving deeper into this before spending any real money.

 

[Greg Pack]

This would be a good opportunity to try something different- maybe a SS bay that is essentially used as a prep station for IBA customers? A detail bay, or office/storage space might also be nice

 

[PEI]

Thanks Robert, I appreciate the advice and will try to find out more about why the site failed.

 

[getnbusy]

I say it depends. only you know the site intimately. I would have to see the site to say yes or no. I would only do it if you can purchase this property. I wouldn't do it at all if I had to lease. You well know how much dang work and expense is involved to install one of these. and that used 4000 will be wore out eventually, then what ? I only say yes if its a smoking real estate deal