What are your thoughts on buying a car wash? Good investment or is there a catch?

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nitro4214
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What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 10:47 am

I'm talking about a car wash in a small town (but in a high traffic area) with a few lanes and an automatic lane as well as some vacuum cleaners.

It doesn't seem like a super difficult business to run/maintain. Could this be a good investment or is there a catch?

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Kenkat
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Kenkat » Sat Nov 04, 2017 10:54 am

It could be a good investment or a terrible investment. You would need to do some homework on it. What are the total sales and net income over the last 3 to 5 years? What is the purchase price? How long would it take to recoup your purchase price? What would the return on your initial investment be? Are sales trending up or down? Is this an area that is growing, thus giving the underlying real estate some intrinsic growth potential?

A local car wash near me that has been around FOREVER is closing. They are building a Starbucks there. I think the land became worth more than the income the business was generating.

randomguy
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by randomguy » Sat Nov 04, 2017 10:55 am

The catch is that you need to run a business and tie up your money in one location. You can run the numbers and see what type of return you can expect to get but you have to remember that there are always risks (i.e. how much to fix that automatic lane/year, what happens if a drought comes and your water supply gets turned off, ....). I used to know a guy who had a half dozen of them and he did ok. But they were pretty full service and he was maintaining a pretty large staff (he said 100 employees but I think a lot were part time).

SrGrumpy
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by SrGrumpy » Sat Nov 04, 2017 11:03 am

Water. The downfall of many great civilizations. (And chemicals.)

High workforce turnover.

All those smelly car air fresheners on display.

But it worked for Walter White.

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sat Nov 04, 2017 11:12 am

Costs to maintain and repair are enormous. Car wash systems are more than what is easily visible, water jets, blowers, scrubbers, but also water and waste recirculation and filtration systems, etc, etc. If it is a franchise, add franchise fees. Employee "breakage" is high. Plan to be there for more days and hours than you may want to.
For low cost services.. . $5 or $10 dollar washes. . . how many washes per day will it take to cover daily operating costs and a reasonable profit, plus enough to cover breakage. . .and so forth. If a large labor intensive operation, be prepared to be there a lot.
An alternative is coin operated "self serve" car washes. Less machinery, only 1 employee at all times. But the same formula as above.
Purchase:
Is this a new build?
Is this a purchase of an existing car wash? (why is the owner selling)
Look up a history of the area and find out how many car washes have come and gone or changed ownership.
Consider, some businesses are more sensitive to economic downturn (local and regional). Folks can always wash the car themselves or leave it dirty when money is tight.
These are some random thoughts from a retired businessman.

BTW: why are you considering a car wash business?
What kind of car wash?

goose
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by goose » Sat Nov 04, 2017 11:14 am

In my town, there's a handful of services that are pitched as "like Uber, but for car washing". Tap a button on your phone, and someone shows up to wash your car in your own driveway. You just provide the hose. So who knows, maybe the car wash business is about to be "disrupted".

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sat Nov 04, 2017 11:18 am

SrGrumpy wrote:
Sat Nov 04, 2017 11:03 am
Water. The downfall of many great civilizations. (And chemicals.)

High workforce turnover.

All those smelly car air fresheners on display.

But it worked for Walter White.
Walter White (aka Heisenberg) and his DW, Skyler, worked hard to make their car wash business successful. Both were on the property in shifts and put in long hours. They would qualify to be in the book "Millionaire Next Door" and are stellar examples of a successful small business (though their startup cash was questionable). They would have done well and lasted longer if they had taken the Boglehead path in investment finance rather than alternative '"fast tracks".
Actionably: a successful car wash or car wash chain in perfect locations coupled with Boglehead basics would be a good combination on the path to wealth.

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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by TheHouse7 » Sat Nov 04, 2017 11:20 am

SrGrumpy wrote:
Sat Nov 04, 2017 11:03 am
Water. The downfall of many great civilizations. (And chemicals.)

High workforce turnover.

All those smelly car air fresheners on display.

But it worked for Walter White.
This may seem like a joke, but water is probably the most wasted natural resource.

All I see is different kids working at the one I go to every month.

The fragrance industry is insanely corrupt and you will receive over exposure due to "air fresheners".

Walter White quit in season 1 I believe. :beer
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 11:35 am

Kenkat wrote:
Sat Nov 04, 2017 10:54 am
It could be a good investment or a terrible investment. You would need to do some homework on it. What are the total sales and net income over the last 3 to 5 years? What is the purchase price? How long would it take to recoup your purchase price? What would the return on your initial investment be? Are sales trending up or down? Is this an area that is growing, thus giving the underlying real estate some intrinsic growth potential?

A local car wash near me that has been around FOREVER is closing. They are building a Starbucks there. I think the land became worth more than the income the business was generating.
I have no idea. Maybe ask the realtor if I can see the books? It is a growing area

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 11:36 am

randomguy wrote:
Sat Nov 04, 2017 10:55 am
The catch is that you need to run a business and tie up your money in one location. You can run the numbers and see what type of return you can expect to get but you have to remember that there are always risks (i.e. how much to fix that automatic lane/year, what happens if a drought comes and your water supply gets turned off, ....). I used to know a guy who had a half dozen of them and he did ok. But they were pretty full service and he was maintaining a pretty large staff (he said 100 employees but I think a lot were part time).
I never see any employees at this particular car wash anymore. I don't think it's even manned, they just rely on the change machines to give out change.

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Hayden
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Hayden » Sat Nov 04, 2017 11:38 am

I imagine dealing with all those employees would be a real headache. Expect to have to do all of the jobs yourself at various times due to employee absences.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 11:39 am

Sandtrap wrote:
Sat Nov 04, 2017 11:12 am
Purchase:
Is this a new build?
Is this a purchase of an existing car wash? (why is the owner selling)
Look up a history of the area and find out how many car washes have come and gone or changed ownership.
Consider, some businesses are more sensitive to economic downturn (local and regional). Folks can always wash the car themselves or leave it dirty when money is tight.
These are some random thoughts from a retired businessman.

BTW: why are you considering a car wash business?
What kind of car wash?
It's been there over 20 years, only one owner as far as I know as I don't recall it ever being for sale. Not sure why the owner is selling.

Why am I considering? I have always wanted to run a business. This doesn't seem like too much overhead or too much of a pita to run although perhaps I'm missing something. It's a self serve car wash.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 11:40 am

Hayden wrote:
Sat Nov 04, 2017 11:38 am
I imagine dealing with all those employees would be a real headache. Expect to have to do all of the jobs yourself at various times due to employee absences.
Strangely I have never seen anyone working there, at least not in recent years, and I have been there on different days/times. I know there's people that do maintenance but as far as having someone there to give out change, I don't know they have anyone there to do that anymore. The machines accept credit cards now anyway.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 11:49 am

When I think of a car wash, I think of Richard Pryor. And yes I realize that is a dated reference :)

avalpert
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by avalpert » Sat Nov 04, 2017 11:54 am

nitro4214 wrote:
Sat Nov 04, 2017 11:40 am
Hayden wrote:
Sat Nov 04, 2017 11:38 am
I imagine dealing with all those employees would be a real headache. Expect to have to do all of the jobs yourself at various times due to employee absences.
Strangely I have never seen anyone working there, at least not in recent years, and I have been there on different days/times. I know there's people that do maintenance but as far as having someone there to give out change, I don't know they have anyone there to do that anymore. The machines accept credit cards now anyway.
It sounds like you don't even know how the business operates - have you done any due diligence on it at all? Do you know the basic financials of the current business, trends, competitive environment, supply chain, risks etc.

I have no idea whether this particular car wash is a good business opportunity or a complete waste of an investment - but of course I'm not interested in running one so I've never even looked. You seem to be, so why can't you tell us the details one would use to evaluate such a decision?

123
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by 123 » Sat Nov 04, 2017 12:01 pm

You might get your hands dirty, but you can really clean up.
The closest helping hand is at the end of your own arm.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 12:07 pm

avalpert wrote:
Sat Nov 04, 2017 11:54 am
It sounds like you don't even know how the business operates - have you done any due diligence on it at all? Do you know the basic financials of the current business, trends, competitive environment, supply chain, risks etc.

I have no idea whether this particular car wash is a good business opportunity or a complete waste of an investment - but of course I'm not interested in running one so I've never even looked. You seem to be, so why can't you tell us the details one would use to evaluate such a decision?
Why ask why? Of course I don't know how the business operates as I have never run one before. That's why I'm asking here. Perhaps someone here has run one. Perhaps someone here knows someone who has run one. Perhaps it was a good experience. Perhaps it was a horrible experience. I'm not asking about this particular car wash.

avalpert
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by avalpert » Sat Nov 04, 2017 12:16 pm

nitro4214 wrote:
Sat Nov 04, 2017 12:07 pm
avalpert wrote:
Sat Nov 04, 2017 11:54 am
It sounds like you don't even know how the business operates - have you done any due diligence on it at all? Do you know the basic financials of the current business, trends, competitive environment, supply chain, risks etc.

I have no idea whether this particular car wash is a good business opportunity or a complete waste of an investment - but of course I'm not interested in running one so I've never even looked. You seem to be, so why can't you tell us the details one would use to evaluate such a decision?
Why ask why? Of course I don't know how the business operates as I have never run one before. That's why I'm asking here. Perhaps someone here has run one. Perhaps someone here knows someone who has run one. Perhaps it was a good experience. Perhaps it was a horrible experience. I'm not asking about this particular car wash.
Well, as one example why you having a base understanding before getting broad advice is important, someone pointed out the challenge of employees and you note you've never seen any there - so, maybe there are different ways to operate a car wash and without knowing how this one operates any advice could be misleading.

But beyond that, without the basic financial information no one could tell you if it is a good investment or not.

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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by jadedfalcons » Sat Nov 04, 2017 12:20 pm

Allow me to speak from experience. When I was but a wee lad, my parents bought a car wash. Based upon our experiences, if you were in front of me, I would slap you across the face repeatedly until you came to your senses.

And I have a very high level of endurance, and two hands.

Vandalism was horrific. You'd come in and find people would dump their trash in your bays. And theft. One day, my dad stopped by to find the vacuums missing. They were found down the road a ways. Change boxes hadn't been broken into, but, nevertheless, they were trashed. That was only $2k to replace (this is back in the late 80's) the two units. Or they'd just flat out steal your nozzles.

We even had a vending machine. They tried to break into that all the time. More than once, we'd come in and find it tipped over. Once even found a shoe underneath it. Hopefully at least one bone got broke.

Or people would go mudding, then stop by the car wash and wash all the mud off, leave it in your bays. That clogs the drains, so you have to scoop that all out into a wheelbarrow and go dump it.

It.

Sucked.

The only benefit you could realistically come up with is money laundering or tax evasion, since it's a cash based business. If either of those two things appeal to you, then, great! Go for it! In my opinion, it is one of the worst side businesses you could possibly choose. You'd be happier selling your services licking aquariums clean.

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 12:37 pm

avalpert wrote:
Sat Nov 04, 2017 12:16 pm
Well, as one example why you having a base understanding before getting broad advice is important, someone pointed out the challenge of employees and you note you've never seen any there - so, maybe there are different ways to operate a car wash and without knowing how this one operates any advice could be misleading.

But beyond that, without the basic financial information no one could tell you if it is a good investment or not.
Fair enough. I would have to see the books. Even that will not tell the whole story. I have decided not to invest in rental real estate due to the potential hassles involved. Running a car wash seems to be a similar type of business/investment. It could be a good investment, could be a horrible investment, and there are many variables involved.

chevca
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by chevca » Sat Nov 04, 2017 12:41 pm

I'm part way through season 5 of "Breaking Bad" and have not watched the whole series before. I had to stop reading when I saw it mentioned. Thanks for not spilling the beans on how it ends. :happy

nitro4214
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by nitro4214 » Sat Nov 04, 2017 12:46 pm

jadedfalcons wrote:
Sat Nov 04, 2017 12:20 pm
Allow me to speak from experience. When I was but a wee lad, my parents bought a car wash. Based upon our experiences, if you were in front of me, I would slap you across the face repeatedly until you came to your senses.

Vandalism was horrific. You'd come in and find people would dump their trash in your bays. And theft. One day, my dad stopped by to find the vacuums missing. They were found down the road a ways. Change boxes hadn't been broken into, but, nevertheless, they were trashed. That was only $2k to replace (this is back in the late 80's) the two units. Or they'd just flat out steal your nozzles.

We even had a vending machine. They tried to break into that all the time. More than once, we'd come in and find it tipped over. Once even found a shoe underneath it. Hopefully at least one bone got broke.

Or people would go mudding, then stop by the car wash and wash all the mud off, leave it in your bays. That clogs the drains, so you have to scoop that all out into a wheelbarrow and go dump it.

It.

Sucked.

The only benefit you could realistically come up with is money laundering or tax evasion, since it's a cash based business. If either of those two things appeal to you, then, great! Go for it! In my opinion, it is one of the worst side businesses you could possibly choose. You'd be happier selling your services licking aquariums clean.
This sounds a lot like owning rental real estate with bad renters. Perhaps one would be better off going the Bogleheads route and working at a car wash part time that somebody else owns for extra income.

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sat Nov 04, 2017 12:59 pm

nitro4214 wrote:
Sat Nov 04, 2017 12:37 pm
avalpert wrote:
Sat Nov 04, 2017 12:16 pm
Well, as one example why you having a base understanding before getting broad advice is important, someone pointed out the challenge of employees and you note you've never seen any there - so, maybe there are different ways to operate a car wash and without knowing how this one operates any advice could be misleading.

But beyond that, without the basic financial information no one could tell you if it is a good investment or not.
Fair enough. I would have to see the books. Even that will not tell the whole story. I have decided not to invest in rental real estate due to the potential hassles involved. Running a car wash seems to be a similar type of business/investment. It could be a good investment, could be a horrible investment, and there are many variables involved.
There is no comparison between R/E and service business ( car wash ). Not by a stretch.
I've owned both.

Actionably:
Request all the books. P & L, Balance sheets. The works. If the realtor can't produce. Run.
Has it made money in the past? Present? Projected future?
Sit outside the business during different times and days. Is it busy. Is it thriving.
Why is the owner selling it? (big one to know)
If it is making so much money, why is he selling it?
Are you bailing out the seller from a bad investment?
How long has he owned it?
Do you own the property or is it leased?
You are buying a "business". In that respect, all purchased businesses have the same basic considerations.
Do you have prior business experience?
In a service business, which this is (real estate is not), one must know "everything" about it whether you do it yourself or not, how to fix the water pump, who fixes it, how much is too much to fix it. How to fix the vandalized change machine, again. How to take slugs out of the change machine. How to unplug the drainage line and filters from another "mudder" that washed his 4x4. And so forth.
And, one must be willing to work all positions when someone doesn't show up.
These are just some random thoughts to get you started.

There is no such thing as an easy, hands off, service business (if most businesses at all) that makes money as a "passive investment".

Good luck in your decision and successes. :D

Some sharing from a. . . .
Retired businessman.
mahalo
j :D

2015
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by 2015 » Sat Nov 04, 2017 1:12 pm

I can't help it, when I saw this thread I immediately thought of the movie Car Wash and this accompanying video:

https://www.youtube.com/watch?v=0eZoiYoFxU0

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sat Nov 04, 2017 2:00 pm

2015 wrote:
Sat Nov 04, 2017 1:12 pm
I can't help it, when I saw this thread I immediately thought of the movie Car Wash and this accompanying video:

https://www.youtube.com/watch?v=0eZoiYoFxU0
Baby Boomers would frequent a car wash with a theme.
Employee Uniforms:

Platform Shoes
Polyester Flare Pants
Tie Die Shirt
Leather braid headband
Peace sign necklace

Actionably: as a business endeavor, there are a number of service businesses thinking outside of the box and catering to millenials, baby boomers, gen x's, etc. As always the business formula is "identifying a need". . . "filling that need" for profit. Vanguard has done this to the tune of $$$$
So, not unlike the OP's query.
Is this business fulfilling a local need profitably?

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TomatoTomahto
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by TomatoTomahto » Sat Nov 04, 2017 2:07 pm

I used to go the local car wash every now and then. I recently switched to a local hand wash place. I don't know if I'm part of a growing trend, or just like my car more than I used to. Fwiw, I see more cars at the hand wash place than at the old automated place. Pricing is comparable.

denovo
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by denovo » Sat Nov 04, 2017 2:30 pm

I would ask to see the business tax returns for the last 5 years.

rooms222
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by rooms222 » Sat Nov 04, 2017 2:43 pm

Let the IRS guide you through the industry: http://www.unclefed.com/SurviveIRS/MSSP/carwash.pdf

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ClevrChico
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by ClevrChico » Sat Nov 04, 2017 3:04 pm

Car ownership could be disrupted in the future. Will car washes become obsolete?

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blueblock
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by blueblock » Sat Nov 04, 2017 6:05 pm

You could likely get some good info by joining the International Carwash Association for $200:

http://www.carwash.org

likegarden
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by likegarden » Sat Nov 04, 2017 6:21 pm

In my medium cost of living area in NY state a carwash with several manual DIY wash booths and one automatic car wash with old machines closed up several years ago and never was reopened or sold. Another carwash with manual DIY wash booths and a gas station got sold and a new gas station with convenience shop of a local profitable chain was put in its place. All other car washs seem to belong to a local car wash business which has mostly laser type automatic car washs which 1 out of 3 times I go there have one booth under maintenance.

totallystudly
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by totallystudly » Sat Nov 04, 2017 6:34 pm

Seems like a capital intensive business. I looked into buying several, but they were all over priced, like twice what they should cost.

I would look at a vending route or something like that for an automated business

2015
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by 2015 » Sat Nov 04, 2017 6:34 pm

Sandtrap wrote:
Sat Nov 04, 2017 2:00 pm
2015 wrote:
Sat Nov 04, 2017 1:12 pm
I can't help it, when I saw this thread I immediately thought of the movie Car Wash and this accompanying video:

https://www.youtube.com/watch?v=0eZoiYoFxU0
Baby Boomers would frequent a car wash with a theme.
Employee Uniforms:

Platform Shoes
Polyester Flare Pants
Tie Die Shirt
Leather braid headband
Peace sign necklace

Actionably: as a business endeavor, there are a number of service businesses thinking outside of the box and catering to millenials, baby boomers, gen x's, etc. As always the business formula is "identifying a need". . . "filling that need" for profit. Vanguard has done this to the tune of $$$$
So, not unlike the OP's query.
Is this business fulfilling a local need profitably?
Actually, the Car Wash movie came out in 1976, when disco was just getting going but still mainly underground. The car wash concept would call for disco attire, but then you'd have a hiring problem. The only people who would probably be caught dead in the "uniform" would be baby boomers themselves. OTOH, it would be an opportunity to hire people who had retired early and make them look just as ridiculous as they did decades ago!

onourway
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by onourway » Sat Nov 04, 2017 8:05 pm

My father in law owned one for many years. One automatic bay and several DIY. I don't know how many hours a week he put in on the job, but it was a lot more than part-time. He typically had 1 or 2 other part-time employees. The vandalism and maintenance issues seem to be the big ones. He's very meticulous and not above doing any job. The big thing I noticed was, being a 24-hour place, he was often down there checking in on it first thing every morning and again last thing every night - on top of being there on and off throughout the day. Difficult to go away for even a short while because I don't think it earned enough to pay the kind of employee you need to hire to really run the place reliably for a couple of weeks or more at a time.

He said when he got out a few years ago that the young guys getting into it in the area were computer programmers who were working to automate and network as much as possible.

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sat Nov 04, 2017 9:27 pm

2015 wrote:
Sat Nov 04, 2017 6:34 pm
Sandtrap wrote:
Sat Nov 04, 2017 2:00 pm
2015 wrote:
Sat Nov 04, 2017 1:12 pm
I can't help it, when I saw this thread I immediately thought of the movie Car Wash and this accompanying video:

https://www.youtube.com/watch?v=0eZoiYoFxU0
warning, dated humor ahead
Baby Boomers would frequent a car wash with a theme.
Employee Uniforms:

Platform Shoes
Polyester Flare Pants
Tie Die Shirt
Leather braid headband
Peace sign necklace

Actionably: as a business endeavor, there are a number of service businesses thinking outside of the box and catering to millenials, baby boomers, gen x's, etc. As always the business formula is "identifying a need". . . "filling that need" for profit. Vanguard has done this to the tune of $$$$
So, not unlike the OP's query.
Is this business fulfilling a local need profitably?
Actually, the Car Wash movie came out in 1976, when disco was just getting going but still mainly underground. The car wash concept would call for disco attire, but then you'd have a hiring problem. The only people who would probably be caught dead in the "uniform" would be baby boomers themselves. OTOH, it would be an opportunity to hire people who had retired early and make them look just as ridiculous as they did decades ago!
That's funny. So true. :D
What was "groovy" then is "uber" or ? today.
I can dig it.
Peace Brother. 8-)

ccieemeritus
Posts: 506
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by ccieemeritus » Sun Nov 05, 2017 1:04 am

I suggest you get a job working in a car wash for a few months before buying one.

If you wanted to buy a fast food place, I’d give the same advice: work there before buying.

A440
Posts: 109
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Location: NJ

Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by A440 » Sun Nov 05, 2017 6:09 am

I would recommend researching a laundromat instead. Any owners here?
Is it really the cash cow if been led to believe? :moneybag

jerkstore
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by jerkstore » Sun Nov 05, 2017 6:29 am

I would stay clear unless you're certain about the numbers and knowledgeable about the industry. There are several types of businesses that are always for sale from bus. brokers, and car wash is one of them. There is ALWAYS a car wash for sale. I don't want to buy a business that many owners are trying to unload. Big red flag.

C-store, car wash, franchises, bar/grill, are just some of the businesses that are always for sale. Start off with this rule (#1) people don't sell profitable businesses. Rule (#2) small bus. owners don't keep good books, so plan on scrutinizing the books to uncover the story.

AntsOnTheMarch
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by AntsOnTheMarch » Sun Nov 05, 2017 7:37 am

We have a 4 bay, unmanned car wash in our town that seems to be doing well. Has been around a long time. One bay is self-wash, two are “no touch brushless,” and one is “soft touch” (brushes).” The self wash bay is basically a powerhose and whatever soap and wax options you get. I’ve never used it but it’s popular with truck owners. The no touch doesn’t work so well for me. Doesn’t clean well enough but it’s popular. The soft touch works pretty well and I don’t see any brush marks. There are also 4 (I think) vacs.

Each bay has an automated cashier where you can choose your options as you enter. There are voice prompts and it’s pretty easy to use. You can pay by credit card or cash. There is nothing else in the car wash. No vending, no cashiers, nothing. I don’t know what happens if anything breaks or there is a complaint. It’s been around for years, is well maintained, and I assume turns a profit.

There is a competing car wash that is exactly the opposite biz model. It’s stacked end to end with cheap labor and offers all sorts of cheap “detailing” options. Proper detailing can cost hundreds of $ but these options are like $30-60, I think. Very popular but I’ve never used it. Seems to be doing very well and has been around a long time.

Hope this helps.

stan_the_man
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by stan_the_man » Sun Nov 05, 2017 9:00 am

As mentioned above, you're buying a part-time job.

Vacuums needs to emptied, change machine restocked, landscaping kept up with, equipment tested/maintained, property cleaned, etc.

I'd expect that this part-time job to be 4-20 hours per week.

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Sandtrap
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Sandtrap » Sun Nov 05, 2017 10:20 am

jerkstore wrote:
Sun Nov 05, 2017 6:29 am
I would stay clear unless you're certain about the numbers and knowledgeable about the industry. There are several types of businesses that are always for sale from bus. brokers, and car wash is one of them. There is ALWAYS a car wash for sale. I don't want to buy a business that many owners are trying to unload. Big red flag.

C-store, car wash, franchises, bar/grill, are just some of the businesses that are always for sale. Start off with this rule (#1) people don't sell profitable businesses. Rule (#2) small bus. owners don't keep good books, so plan on scrutinizing the books to uncover the story.
Well said. . . yet the allure of seemingly easy income calls so so softly. . . . .
+1
Perfect business sense :D

quantAndHold
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by quantAndHold » Sun Nov 05, 2017 10:29 am

nitro4214 wrote:
Sat Nov 04, 2017 12:07 pm
avalpert wrote:
Sat Nov 04, 2017 11:54 am
It sounds like you don't even know how the business operates - have you done any due diligence on it at all? Do you know the basic financials of the current business, trends, competitive environment, supply chain, risks etc.

I have no idea whether this particular car wash is a good business opportunity or a complete waste of an investment - but of course I'm not interested in running one so I've never even looked. You seem to be, so why can't you tell us the details one would use to evaluate such a decision?
Why ask why? Of course I don't know how the business operates as I have never run one before. That's why I'm asking here. Perhaps someone here has run one. Perhaps someone here knows someone who has run one. Perhaps it was a good experience. Perhaps it was a horrible experience. I'm not asking about this particular car wash.
Instead of asking random people on the internet, it might be more effective to ask a couple of people who actually own car washes about their business. I’ve found that small business owners tend to be very forthcoming when you ask. Everybody likes to talk about themselves.

You’re probably also going about it the wrong way around. Instead of seeing a particular business that happens to be for sale and deciding whether or not it’s a good fit, you might investigate different types of businesses, decide what type of business you want to own, and then find one that’s for sale on the right terms.

gavinman
Posts: 112
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by gavinman » Sun Nov 05, 2017 10:44 am

I worked with a guy who used to own a car wash that was in a small town.

All cash business it never made money on paper, so he said.

He ended up selling it. He said it was a pain to maintain. Guys would come in with their trucks after four wheeling and wash all the mud off leaving a mess clogging the drains. He loved the all cash business part but said for all the work it wasn’t worth it.

Like any small business to make “real”money I think you would have to own multiple places to make a living.

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Silly Wabbit
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by Silly Wabbit » Sun Nov 05, 2017 11:05 am

rooms222 wrote:
Sat Nov 04, 2017 2:43 pm
Let the IRS guide you through the industry: http://www.unclefed.com/SurviveIRS/MSSP/carwash.pdf
That's awesome. Is there a place I can find other write-ups like this?

itstoomuch
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by itstoomuch » Sun Nov 05, 2017 11:20 am

hint: charge an extra $2 by calling it a Car Bidet with two sets of nozzles; A gentle top wash and firmer underneath wash. :mrgreen:
YcarMV :moneybag
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

2015
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by 2015 » Sun Nov 05, 2017 12:58 pm

Sandtrap wrote:
Sat Nov 04, 2017 9:27 pm
2015 wrote:
Sat Nov 04, 2017 6:34 pm
Sandtrap wrote:
Sat Nov 04, 2017 2:00 pm
2015 wrote:
Sat Nov 04, 2017 1:12 pm
I can't help it, when I saw this thread I immediately thought of the movie Car Wash and this accompanying video:

https://www.youtube.com/watch?v=0eZoiYoFxU0
warning, dated humor ahead
Baby Boomers would frequent a car wash with a theme.
Employee Uniforms:

Platform Shoes
Polyester Flare Pants
Tie Die Shirt
Leather braid headband
Peace sign necklace

Actionably: as a business endeavor, there are a number of service businesses thinking outside of the box and catering to millenials, baby boomers, gen x's, etc. As always the business formula is "identifying a need". . . "filling that need" for profit. Vanguard has done this to the tune of $$$$
So, not unlike the OP's query.
Is this business fulfilling a local need profitably?
Actually, the Car Wash movie came out in 1976, when disco was just getting going but still mainly underground. The car wash concept would call for disco attire, but then you'd have a hiring problem. The only people who would probably be caught dead in the "uniform" would be baby boomers themselves. OTOH, it would be an opportunity to hire people who had retired early and make them look just as ridiculous as they did decades ago!
That's funny. So true. :D
What was "groovy" then is "uber" or ? today.
I can dig it.
Peace Brother. 8-)
Right on! :beer

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unclescrooge
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Re: What are your thoughts on buying a car wash? Good investment or is there a catch?

Post by unclescrooge » Sun Nov 05, 2017 5:50 pm

A friend of mine bought a frozen yogurt place in Los Angeles a few years ago.

After running it for 2.5 at almost breakeven (and not staying
drawing a salary for his 10-15/week) he sold it for 20% less than he bought it.

The same story was repeated with someone I know who bought a cold stone creamery several years ago, and another person who bought a baskin Robbins 15 years ago.

In my limited experience, white collar workers with fulltime jobs don't make good business owners. Tread carefully.

On the other hand, I met this college drop out who owned a pizza parlor. For him, it was his only source of income. He had lower expectations and was able to put in longer hours. He eventually opened a couple more and was quite successful.

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