👀 how to spot a KILLER car wash deal

Hey you,

Ever wondered what a good car wash deal looks like?

How to find it, then evaluate it? I found one for sale outside of Dallas. I'll show you how to figure out if it's a good buy in about 5 minutes. We'll look at the $$, the market, and even the equipment. Ready? LFG

First let's take a look at the listing. We can confirm it is, indeed, a crappy car wash. (found on Crexi dot com, btw)

Ugly brick ✅ Ugly signage ✅ Looks like it was built in 1974 ✅

We love crappy car washes. They have the biggest upside.

Next 💰: asking price $1.3M, NOI $110,000, cap rate 8.46%

This is right in our range. We'd like to see closer to 10 but we're within negotiation range of that. ✅

Even better this wash has been on the market for 340 days! That seller is probably soft as Charmin about now. ✅

Onward.

We see from the marketing description that the sale includes everything. Always good to make sure, some places are selling just the business or just the land. We want it all, generally. ✅

It's ALL self serve. This is good for a newbie. Lower operating complexity, lower equipment burden. It's simple. And it has an RV/truck wash. We love that.

Q: "But CWG, doesn't everyone go through those fancy tunnel washes now? Who the heck washes their own car?"

A: Millions and millions of people wash their own car. Your clientele will represent a 'barbell' demographic of blue collar folks who can't afford a tunnel wash and/or don't have a vehicle that can go through it (e.g. about 50% of vehicles on the road can't go through a tunnel)

OR people who baby their high-end vehicle and would never, ever go through an automatic wash with brushes. TONS of people love to wash their car in these places, but they want a clean, safe facility that functions correctly.

Ok? Ok.

Now, we might have our first 🚩. The memo says "All equipment is fully functional at this time, and is being sold AS IS."

Sellers don't make brokers put that kind of stuff in the listing unless the equipment is old af.

That's still not a huge issue on a self serve wash though, you can replace most of the big equipment from cashflow.

If you go look at the place, you'll google "Dallas car wash service and supply companies" try to find one that knows this place, and have them show up to the inspection. They'll tell you about the age and condition of the equipment.

This one is a small red flag, doesn't bother me much but worth doing more DD on.

👀Now let's look at a map. We plug the address into Google: 1101 E Yellow Jacket Ln, Rockwall, TX 75087

LO AND BEHOLD LAWD HAVE MERCY WE HAVE A WINNAH YALL.

Google doesn't know what this place is. There's no Google listing. After we get done facepalming we start high-fiving ourselves. 🕺

We could get it listed on Google about 1-2 weeks after closing, get a bunch of 5-star reviews and get an instant 20-40% boost to sales. You'd be shocked how many people have lived in this neighborhood for a decade and will say "I had no idea there was a car wash there!"

Heck you could get a bunch of 3-star reviews and people will start to come.

The fruit is hangin' so low we could stomp our feet and make applesauce.

Next let's look at the neighborhood - and OH SHIZ CWG - there's another car wash around the corner.

This one is called Carmel Car Wash. BUT, there's good news. This is a 'full service' car wash, meaning it's made for a different customer. It's tunnel style but they'll also do your interior.

Remember, different customer, different vehicles.

We're going to cater to the DIYers, lifted truck bros, RVers, classic car owners, Mexican nationals, contractors, trailer-pullers and blue collar folks.

Do any of those folks live in Texas??? Dunno, maybe we should have McKinsey do a study and let us know.

Anyhoo, this other car wash only has a 3.6 star rating anyway, so not exactly setting the world on fire. And there are two more tunnel washes in the area. ZERO other self serves. ✅

A quick neighborhood scan reveals plenty of gas stations, a Hobby Lobby (DIY central for Texas ladies!), and an In-and-Out. Big national retailers like them do not locate themselves in quiet areas. This 'hood has TRAFFIC.

Ok, this place has legs. It's time to call the listing agent. Notice I said CALL. Crexi listings generate a s-ton of BS tire kickers and if you fill out the little "Request Info" thing you'll probably hear back in srping of 2042.

Ask her why the place hasn't sold, age of equipment, and if the seller is willing to finance. Ask her how many offers they've had. Ask if there is a manager in place.

Then, drive the site. Figure out what they charge per minute for a self serve wash (you'll have to run your card, cost ya ~$2). Compare that to other self serves.

I bet if seller hasn't bothered to list it on the Googs he hasn't bothered to change prices since the Clinton administration. Applesauce.

So you could have an instant boost of 20-40% from Google and another 25% from getting prices to market rates.

Both those moves are FREE, they cost you NOTHING.

And you haven't even executed my value add playbook yet.

You'd update the card readers, paint, put up new signs, and put in membership programs. Yes, membership on self serves. In a ~year you'll have the nicest self serve in town and people lined up on Saturday mornings.

With that you could double the revenue. Someone DM'd me yesterday who had just that, doubled the business in a year and half.

Then you could invest in a touch-free automatic for one of the stalls. That would cost ~$300k or so but could be financed and add another 40-50% to the bottom line.

As far as I could tell there are no touch-free automatics in the vicinity and many many people are religious about them.

AND, drumroll, the tax bennies are 🤩🤩🤩

On a place like this you might have 70% of the value in the improvements, which means your Year 1 write-off would be:

.7 x $1.2M (we got the price lowered) x .8 (bonus depreciation is 80% this year) = $672,000 write off this year.

That would probably nuke your taxes for this year and possibly next year too.

Not bad eh?

Reply with your questions and comments,

CWG Kriss