Would you build/invest right now?

[MEP001]

I've been looking into partnering with someone on a new SS/IBA, but we would have to get the land cheap for it to work. Things are growing fast here, and there are a lot of potentially good locations that in about five more years will have the traffic to support the project. Getting the land now and being prepared might pencil out. I'd like to go in with someone on an oil change place on the same property and turn it into a big car care center.

 

[soonermajic]

New SS/IBA projects likely wouldn't pencil out. I would buy existing. Of the three washes I own now, only one would sell for (or above) replacement cost.

I had three nice washes I sold in 2005. The person I sold them to held them for about a year and flipped them. That buyer lost them to the bank in 2008. They were sold eventually for about 1/4th the cost of the new project.

My father-in-law, who's been in construction for 40 years, told me "you can buy a bargain, but you can't build one"
His brother has my often quoted "you make your money when you buy "

2 pretty savvy financial guys, both w/ 8th grade education, both are millionaires!

 

[imserve]

So about how much did revenue drop for self bays/IBA during 2008 to 2011 period? I got started after that

 

[slash007]

I bought my first wash in March of 2008 and the numbers then seemed to not drop off much from the previous years. It's a SS only wash though, no IBA's.

 

[Kramerwv]

Just found out express owner just bought property right across from our IBAs. That group has about 7 now so trying to build and package to sell to a larger outfit. We’ll see if he can convince the public of his value with packages, etc. to service all that debt.

 

[soonermajic]

Just found out express owner just bought property right across from our IBAs. That group has about 7 now so trying to build and package to sell to a larger outfit. We’ll see if he can convince the public of his value with packages, etc. to service all that debt.

That's kinda,scary

 

[Kramerwv]

Indeed

 

[Axxlrod]

I've been looking into partnering with someone on a new SS/IBA, but we would have to get the land cheap for it to work. Things are growing fast here, and there are a lot of potentially good locations that in about five more years will have the traffic to support the project. Getting the land now and being prepared might pencil out. I'd like to go in with someone on an oil change place on the same property and turn it into a big car care center.

I believe the best days of quick lubes are gone.

Gone are the days of changing oil every 3k miles. Now with many (most) cars coming with synthetic oil coupled with many manufacturers including annual maintenance, there's really no reason to go to a quick lube place anymore.

 

[MC3033]

Does anyone do good on the lubes? I’ve always loved doing the actions of the business but thought margins were poor and risk was high. Is there legit money or only in very rare areas?

to add on to the post above, most dealers give a year or two of free oil changes with vehicle purchase as well now

 

[Randy]

I change the oil in my car every 8000 miles, use a 0-20wt. synthetic oil, I'd never take my car to a lube shop. A lot of the lube shops that were built here have been closed for some time. When my son bought his last new car he got free oil changes for life.

 

[Car_Wash_Guy]

Out by my area more and more car dealerships are installing IBA's and offering some form of free washes. My friend owns a pretty large Toyota dealer and installed a Radius and offers fro washes for the first year. I also noticed the local Dodge dealer also installed a Radius.

 

[soonermajic]

Out by my area more and more car dealerships are installing IBA's and offering some form of free washes. My friend owns a pretty large Toyota dealer and installed a Radius and offers fro washes for the first year. I also noticed the local Dodge dealer also installed a Radius.

WTH??!!! WHY? Stick to your own dam area!
Unless they have some prepping, those touchless washes @ a dealership ain't gonna dona good job.

 

[Rfreeman]

Benz dealership here offers free car washes for life. Needless to say it takes about 2 to 3 hrs wait time bc its so busy on the weekends.

 

[Car_Wash_Guy]

WTH??!!! WHY? Stick to your own dam area!
Unless they have some prepping, those touchless washes @ a dealership ain't gonna dona good job.

Yeah I hear ya man. Car sales is super competitive and like the oil changes ( many offer oil changes for 1+ year ), the washes are obviously an attempt to lure buyers.

 

[Axxlrod]

Dealer in my town built a 100' Macneil tunnel onsite. Then opened it to the public also, He did so well, that he now built 3 other express tunnel sites.

 

[cw01]

Everyone, how can you help a newcomer to your industry. I'm considering purchasing 2 car wash businesses in the same town. Only one competitor in town. The two for sale: One has 1 IBA and 3 SS, the other has 2 IBAs and 2 SS. Relatively new equipment--owner estimates has 15yrs life left on the equip. My first rodeo in this industry (but have several other businesses). Two questions:
* What is a fair CAP rate (multiple of EBITDA) for basing a sale price in your area?
* What is the best source of information you've found for doing due diligence on prospective car wash business?

Thanks in advance!

 

[Waxman]

I'm not sure the CAP rate but you can find it here on this forum.

For due diligence, I would read this forum and ask alot of questions. Get 3 years tax returns. Water bills. Stake the places out on dry days, weekday and weekend. Count cars.

 

[cw01]

I'm not sure the CAP rate but you can find it here on this forum.

For due diligence, I would read this forum and ask alot of questions. Get 3 years tax returns. Water bills. Stake the places out on dry days, weekday and weekend. Count cars.

Thanks! They have provided 3 yrs. Good thought on watching actual car volume.

Planning to employ my son (who is just finishing college) to learn, manage and run the business. Tips on making that a successful arrangement?

Thanks,
Chad

 

[mac]

Whether by chance or design you have come to thebest place to get good, sometimes great, honest info on this business. And it’s FREE. can’t beat that. Read all you can the older discussions. Your questions have been asked before. And good luck to you.

 

[cw01]

Whether by chance or design you have come to thebest place to get good, sometimes great, honest info on this business. And it’s FREE. can’t beat that. Read all you can the older discussions. Your questions have been asked before. And good luck to you.

Thanks. I've been reading and learning a ton.