Self service car wash anyone?

Question

Three bay car wash in small rural town, pop. 2200, for sale. Land and car wash for $100,000.  On the surface, does this sound of interest? I am considering purchase. What research I have done Gives me idea of-estimated $20,000 to $25,000 annual gross. Anyone on here with experience in this business?

Joseph Cacciapaglia · Answer

I worked on financing several car wash deals a long time ago. Looking at traffic counts was the first thing we did. Daily counts aren't as important as how many go by on your side of the road on the way home from work. Looking at this number and competition was basically our entire market research. I don't remember the actual numbers we required per bay. The International Car Wash Association has a ton of good info on their site: https://www.carwash.org/

Gregory Schwartz · Answer

@Ryan Clark I pass a 3 bay carwash and 4 bay vacuum station weekly and constantly wonder if that would be worth purchasing. I hope the numbers work out well for you.

@Joseph Cacciapaglia thanks for the "pro-tip"

Zane Cress · Answer

Usually in a small town like that the numbers on the paper are not the real numbers. Especially if it is still heavily coin operated. I knew someone who bought one of these down in south Georgia and at the closing table the seller told him to go open a local bank account and gave him the real numbers. Car washes are not what they appear sometimes.

Joel Owens · Answer

The question is not return but first ACTIVE yield versus PASSIVE yield.

There are lots of businesses sub 100k where you might be able to achieve 20% plus annual returns but YOU ARE the business. Most of those are owner operators with a few employees to relieve the constant pressure valve to work endless hours as the owner.

I wouldn't want special use hard to sell property in a small town that grossed 20,000 annually before expenses. If you have 100k cash to invest there are a ton of other alternatives passive in nature with just as high or better overall IRR year over year.

I looked at buying businesses before but unless you go big where business makes 200k and up profit it is hard to be passive and have layers of management in place for the cash flow stream. Again YOU WOULD be the business unless you can get passive and you can't have many multiple businesses where you are the businesses. That's a quick way to lose your health, family, friends, for just OK returns.

Ryan Clark · Answer

@Joseph Cacciapaglia thanks for the link. I always enjoy research.

Seth A. Weber · Answer

@Dave Carpenter thanks for your input.  the property is in a county community, I see the renter(Car washer operator) being more local, as the closest car wash was is a hour drive in either direction.

Dave Carpenter · Answer

@Seth A. Weber

I’d reach out to local car wash owners if you want to rent the wash out. It’s probably something that needs to be somewhat actively managed. May only take an hour or two each day, but is certainly a part time job. For a guy that has a wash a mile away, it might be a nice little opportunity since they know that industry anyways and are in the area.

Seth A. Weber · Answer

@Ryan Clark, @Steve Cheslock, Hey guys how did things end up with your car wash opportunities?

I am evaluating something similar.  the property is a 10 slip, long term RV park (no Amenities), with a 2-bay coin operated car wash/ 1 vacuum. Location is along a major road with heavy traffic.  Owner states separate metered Elec. for each slip and the car wash, shared municipal water for the entire prop. While we are still in number discussions, it appears the lots (room to increase rents) are the bread winners, and the car wash is added cash flow.  Not really interested in the Active mgt. role the car wash needs do to my travel distance.

BP: Any thoughts on Renting out the car wash and it operations?  I believe this is called a triple lease?

Steve Cheslock · Answer

@Ryan Clark did you end up pulling the trigger?  I'm currently looking at a small self service car wash deal.  It's about 25 mins from my house so management isn't too much of a concern, and the deal comes with additional land which I already have a plan for.  The real value play is in the additional land and the car wash carries the land and adds a little bit of profit a month. My only concern is all the plumbing/electrical.  I don't mind putting in 1-2 hrs per day but I have no idea about the operational side of the business.

Ryan Clark · Answer

@Joel Owens This is a three bay coin op near a large reservoir. Has one bay large enough for RVs. Active vs passive income is of concern to me. The time investment would run approximately two hours a day.  I can finance the business due to the commercial lot it sits on through my usual local bank for 15% down. If I had to invest $100,000 out of pocket I would definitely not be considering the deal. However, even with the reduced out of pocket expense, I have decided that it’s not enough return to satisfy me.

Self service car wash anyone?

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