💰How to double the value (and 5X your equity) of a property in 15 months 💰

Hey you,

This is how to double the value (and 5X your equity) of a property in 15 months.

In this case: a car wash (naturally)

TLDR: raise customer experience, car wash visibility and then prices.

How do you do that? You uncrappify your car wash...with the 3 M's

Let's go:

1. Modernization: we bought our first car wash in April of '22. The main problem: the card readers were old. In a car wash everything is getting wet and soapy - including your card readers. So you have to replace them often.

We did that but also upgraded the POS system so we can track cash, offer tap pay, and eventually offer monthly memberships. People love it, and we saved at least 5-6 drive-offs a day because our system actually works like it's supposed to.

We also upgraded the soaps - people love big fat suds (even though they don't necessarily clean better!). Cheap wash owners shoot themselves in the foot by being stingy with the soap.

We made sure our attendants were onsite to help folks who having trouble and clean up messes.

Their mantra: We sell smiles. Make sure people have a positive experience on site, even if that's just offering them a smile. But often they are helping people use the system, give away a free wash to regulars, and even help them wash the car sometimes.

Cost: $7k in POS gear

Boost to revenue: 15-20%

2. Marketing: the first wash was not on Google Maps or any other website for that matter. Read that again. You'd be shocked at how many are not. We recently looked at a 17 wash portfolio - almost half of them were not on Google Maps. [facepalm]

So, naturally, we put it on the Googs and get a bunch of 5-star reviews. When our attendants make people happy, they ask for a 5-star review. If they don't do Google, we ask them to tell a friend. It works like crazy.

We also do Google PPC for car wash searches and get people onsite for about $3.

Then we rebranded to show we're modernizing and we care about our car wash. This alone attracts new customers.

Cost: about $600/mo in PPC, $5k for new signage

Boost to revenue: 25-35%

3. Modify Pricing and Options: we raised prices! When you lift the customer experience people are happy to pay more.

And it's not much more, we raised prices about 20-30%, which most people won't notice when the average ticket on a self serve is ~$3.

Plus we simplified menu options and automatic wash packages. It's easier to understand and select what you want, which makes for happier customers.

Coming next month: monthly membership programs for the automatics that will be half the price or less than what the big tunnel washes offer.

Cost: about $1000 in signage

Boost to PROFIT: 20-30%

So what's the bottom line?

When we bought the wash:

Revenue: $171k

EBIDTA: $65k

Now, 15 months later:

Revenue (est for '23): $294k

EBITDA: $130k

That means our car wash is now worth approximately double what we paid for it (depending on cap rates etc.)

And when you put down 25% in equity, if you double the value, your equity goes up 5x.

In this case we paid $650k, put down $163k, financed $487k.

Now worth $1.3M, - $487k we owe the bank (actually less now) = $813k in equity. That's 5x our initial equity injection of $163.

That's a 5x return on equity in about 15 months.

Get it?

The best part is this same playbook can be applied to a lot of businesses and real estate. Hell we stole this playbook from the self storage guys.

Just look for an ancient industry in desperate need of an upgrade. If its full of B and C players, even better.

What do you think, can you do this? What industry do you want to do it in?

Kriss The Car Wash Guy

PS: I lay out my entire playbook for making car washes and tax-free cash cow right here.