We have just signed on our biggest deal yet!!

Buying & Selling Real Estate
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We have just signed on our biggest deal yet!!

Dustin Lavender
Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
So I have been investing like crazy over the last year. We started with $4500 2 years ago and today own 7 SFH, a duplex, and a multi-use property that includes 10 rental units, a small coin laundry, and 3 bay self serve carwash. Earlier today I put in an offer on a 36'x110' coin laundry facility fully furnished. The property is also home to a double bay car wash. One side is a self serve bay and the other side is an automatic. The appraisal and paperwork show a monthly revenue of $8,000 with the current appraisal showing a value of $400k. We have a signed purchase agreement for $250k. I cannot express in words how excited, scared, and whatever else I am. Now we just have to put together the funds! 馃槵
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Jay HinrichsBusiness Member
Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
9y

agreed.. !!! no argument from me... I think many people are not open minded to other ways to make money.

many times there is far more reward in owning a small business like these than simply buying rental properties..

I see this a lot...  Heck running a subway sandwhich franchise is a better use of 100k than buying most rental properties long term.

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  • Austin Fruechting
    Investor 路 Kansas City, MO 路 Member since 2017 路 791 posts 路 1k+ votes
    9y

    Amazing work in just two years!!! Well done @Dustin Lavender !

    0Reply
  • Leona N.
    Investor 路 Sask, Sk 路 Member since 2017 路 85 posts 路 25 votes
    9y
    That's awesome, a lot to be proud of in a short period of time. We used to own a car wash/laundromat and they are good businesses. Congratulations
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    sounds like your going to be in the soap and suds business... I looked at car wash's on the west coast the fully automated brushless.. that can be run by 2 or 3 attendants..  2 to 3 million to build them though.. but they are nice cash cows once they are up and running... keep at it.. I like this small business in smaller regions of the country were you can buy this stuff so cheap.

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  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y
    Austin Fruechting thank you! It has been a lot of work! We still do most of our own renovations and maintenance work so it is a full time job of its own.
    0Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y
    Leona N. I like the coin laundromat business much more than the carwash. They are fairly predictable though.
    0Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y
    Jay Hinrichs automatics are crazy expensive and from what I have seen here, any that are for sale have usually been run until there is no value left in the equipment. It is a sad reality that for most who run them suck all the money they can from the business and leave it ruins.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    @Dustin Lavender  out here we have Kaddy car wash.. they print money and very very well run.. nothing run down about them. its a very big money business in the right locations of a major metro area.. at least out our way.. were folks will pay 7 to 10 bucks to run it through a 60 second machine.. but they work great I have been using them for 25 years..

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  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y
    Jay Hinrichs I'm not saying that the ones in operation around here are run down. I think the big auto down from me has 3 options a 5-8 and $12 I believe. The ones that I have looked at for sale though need way more work to be put into it than what it could be worth.
    0Reply
  • John Thedford
    Real Estate Broker 路 Naples, FL 路 Member since 2013 路 9k+ posts 路 6k+ votes
    9y

    I use one automated car wash locally. They are always slammed with customers. I think they start around $12 and go up to almost $40. They have a LOT of attendants, and inside area to buy add ons, etc. I have no doubt that 2M+ would be  required to get in. I would love to see their income statements:)

    0Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y

    @John Thedford the big one down from me has a line down the street on Saturdays and just two attendants. Once we get this deal closed and this little auto up and running I may change my tune on the price of these auto's. Maybe it won't cost as much to fix up as I have calculated. Right now I can't see the payback on a brand new one could be much less than 20 years here and at that point the equipment has got to be going south. 400 cars a week at $12 is just shy of $5M lafter 20 years, but with debt service and overhead I'm still not sure you would be at break even then. I guess if you did it for cash flow it could be good, but if you have 2-3M in the bank you could just live of the cash flow from the interest. Lol plus I have no clue what the numbers may actually be in terms of average turns or price/cost per turn. There I should definitely money there or people wouldn't invest in them. 

    I am in this deal more for the coin laundry side. I know it is a cash cow. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    bottom line car wash in a business.. just like buying any other business.. its not real estate investment in my mind in the BP sense.. I looked at it hard for about a year I was going to build a new one in Napa CA  circa 1996 ish.. even then it was north of 2 million.. the water reclamation and chemi's needed make it expensive along with the brick and motar and you need  a good location can't just put them anywhere traffic counts and flow are necessary.

    In CA with Droughts they are really good because they use far less water than washing at home and with water restrictions it was not possible legally in a lot of areas to wash your car at home...

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  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y

    @Jay Hinrichs I guess it is all how you perceive it. I look at every piece of property I buy as it's own individual business. Each one has its own profit and loss, maintenance and upkeep. They are all real estate and I am investing in them. You are right that it isn't flipping or wholesaling or BRRR, but there are many more aspects to real estate investing than just residential and multi residential properties.

    Along with the carwash on this property, the laundromat has a 36'x40' shop/warehouse area and a 15'x 25' office area that are separated off from the laundry. Both of those will potentially provide additional income when leased out. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    agreed.. !!! no argument from me... I think many people are not open minded to other ways to make money.

    many times there is far more reward in owning a small business like these than simply buying rental properties..

    I see this a lot...  Heck running a subway sandwhich franchise is a better use of 100k than buying most rental properties long term.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y

    @Jay Hinrichs I literally lol'd when I read your last reply. There is a lot of truth in that about the use of that 100k. When crunching the numbers the easiest, cheapest, and most profitable venture I have so far has been our small laundromat. The ROI is way better than single family and way less headache than our multi's.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    @Dustin Lavender  its all about managing people either your managing tenants,  PM's  ,, managing yourself,, or a few employees... I only bring up Subway because a friend of mine owns three of them.. and you pay them off in about 5 to 7 years then its cash flow city... FAR more than you could ever make on rentals in most markets.. unless your in CA or other very HIGH appreciating markets that skyrocketed and you can get into them for about the same.. 100k in cash and sign a loan... but then you have to manage a business and people ..

    Anyway not to get totally side tracked.. but great job keep it up.

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    1Reply
  • Martin Grizzanti
    Investor 路 Rochester, NY 路 Member since 2015 路 499 posts 路 169 votes
    9y
    That's awesome.
    1Reply
  • Hersh M.
    Engineer 路 Carlsbad/San Diego 路 Member since 2014 路 285 posts 路 97 votes
    9y

    @Dustin Lavender Congrats!! So sounds like you prefer commercial rather than residential, right? Also how are you financing all these back to back purchases? 

    0Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y

    Hersh M. I definitely am starting to sway toward multifamily/multi-use/ commercial properties. In my area this is where the cash flow is at in my price range. Most of our properties are financed using equity from previous purchases. This year so far we completed the renovations on the 10 unit apartment we purchased in late December, we got the car wash and laundry there up and running and we have closed on two SFH since then and completed the updates on those and both are rented. it is definitely a hustle and at this point we re-invest all of the cash flow back into the business. That means I ain't getting paid yet! lol but I still work full time and so does my wife.

    My lender is a small local bank (#shop local). They are great. I write up a 2-4 page proposal for each property we purchase explaining what our projected project costs will be and what our expected rents and cash flow will be for each, etc. and they haven't told me no yet. Many of our properties are financed with no money down because we cash out equity from the other properties and roll it into the new loan for the down and closing costs and many times we walk away with enough cash in hand to complete the reno's as well. We aren't doing full gut renos on most of these properties though. Our average is 5-7k depending on the extent of the work and how much of it I do myself.

    There are those out there who seer debt is bad and a lot of people want to own their properties outright, but if we did that at this point we would be stuck with one SFH cash flowing at maybe $200 a month scraping together to try and buy another. In a few years we plan to start quickly paying down our highest monthly payment loans so we can cash flow better and then pay down the rest of them.

    As you can see I don't mind talking, so let me know if you have any other questions. 

    *Disclaimer: I am by no means an expert. This is just the strategy that is working for me today. Tomorrow I may change my mind.

    3Reply
  • Ronnie S.Pro Member
    Investor 路 Coeur d Alene, ID 路 Member since 2013 路 109 posts 路 29 votes
    9y

    @dustin lavendar Congrats on going 0 to 100 in just a couple of years!!  (using a car performance metaphor)

    0Reply
  • Dustin Lavender
    OP
    Investor 路 searcy, AR 路 Member since 2016 路 147 posts 路 111 votes
    9y

    Thanks @Ronnie S. the hard part is  continuing to grow. Everyone says that they want financial freedom, but I honestly think we will be working for ourselves in the next few years and not someone else. 

    1Reply
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