All Forum Posts by: Patrick H.

I looked at 4 different car washes and decided to pass on all of them.  Trying to focus on what I know instead of getting spread to thin.

Thanks!

David G  I added you as a colleague and sent you a pm.

Hello, I'm reaching out to all my friends on BP to find someone that I can bounce this deal off of that I'm looking at.  Its a car wash business.  I have no experience with running one but feel I'm very capable of doing so.  This deal makes me nervous because of the cost to buy the business.  2.8 m.  I'm looking for some one that owns, and has a good feel for a car wash business that has evaluated several of them. 

Some items Id like to discuss are the deal its self, how to structure the business (two LLC's renting from my self), may be some cost of operations advice, Tax ideas, how to value a Car Wash, and any other advice.

Thanks in advance!

Good morning all!  I was cold calling last night trying to find another storage facility to buy and came across a owner that has two car wash business that he is thinking of selling.  Im a out of town investor and have no experience with car washes.  Im very failure with the town and own rentals and a self storage business in the town.  

I looking for any and all advice.

Question  

1.  How is the income taxed?  Passive rental or regular income?  I did some reading on sales tax but can't find any info on income tax.

2. Should I hire someone to run the business if I buy it or should I keep the real estate and lease out the business?  How to structure it?

3.  What kind of cap rate is used in comparison to Multi fam or self storage.  

Thanks in advance!

The owner   originally built it giving his personal assistant a job to keep him busy while not doing other tasks for his wealth family.  The owner has a huge corporation ( once a fortune 500 co.) and is reaching a age that im assuming wants to simplify life. On top of that I happen to call the week after the owners personal assistant announced his retirement after almost 25 years. The expenses for the property are high due to there situation.  Management expense is 23% higher, Insurance is over 400% more than I'm getting it for,  and the current tax assessment is way high due to a large tax increase that everyone else in the area contested but they opted not to due to there large presence in the community.  And they are being taxed for a building that hasn't even been built.  

So at 60% occ with just fixing these three items it will be cash flowing at 38% coc the day I take ownership.  Ive done some market research for the area and it is overbuilt.  So I get all the open units for free and if the market doesn't improve no biggy. If it does, wonderful.  It also has a concrete foundation and drive poured for another 3600 sqft building that is cream on top.   The appraisal came in several hundred thousand over what I'm paying for the property so its not just my opinion.  Replacement cost is 371% over what im paying and the property is in great shape!

This market is a smaller one that has very solid and stable employment.  

I close Tue on the property!  I'm pretty jacked up about it!

I have no experience with self storage, I have a property manager in place for 8% that will handle all calls, paperwork and data entry for the Site Link software.  My opinion is that you would need to have some boots on the ground some.  A kiosk is another complement to management. 

THE trachte analysis calculator on their web site has that info.  They say Expenses are supposed to be 25% of gross for small owner managed to 35 or 40% for managed property. 

Double check there web site though.

I had the opportunity to do owner financing but got way better terms at my local bank.  I haven't reached out to brokers in that area yet I have in anchorage.   All my deals were cold calls to owners.  I plan on attending the Vegas show in April. 

sounds fun

Correct me if I'm wrong...  After the the exchange is done I go back and refi pulling out the money that I couldn't take at closing, that would be allowed correct?