👀 Steal my due diligence checklist

Yo Huslta’

It’s been a minute since we talked, I’ve been busy due diligencing a car wash purchase. Plus, to be totally honest, I didn’t have much to say so I didn’t want to waste your time with fluff or repeats.

But I thought it would be instructive for you to see how we diligence our car wash deals.

I’m going to let you have my due diligence punch list from my car wash course for free right here:

Due Diligence Punch List 

Now you’re probably thinking “I don’t want to buy a car wash, this is of no use to me.”

I think it will be very helpful in buying ANY kind of real estate or small business. This document will teach you how to think about these deals.

For our car washes, we think about inputs and outputs. Inputs are water and soap, outputs are dirty water. So we follow that entire cycle through the wash from water supply, to adding chemicals, to sewer line. You can also follow the electricity and gas with the same mindset. This can be done in a manufacturing setting too from raw materials to finished product.

Then you can follow the customer journey. Watch people as they interact with the business. For a car wash they often pull in, get change from a change machine or insert a credit card, pull into a bay, and then either wash their car or get their car washed. Then they use the vacuum and trash cans, and off they go.

How was that experience? Smooth and seamless or bumpy and clunky? Talk to them, what do they like about the wash, what do they hate about it? What do they like about OTHER car washes/businesses?

Once you’ve been the flow of inputs and outputs, you can start to triangulate the data. This means getting data from as many sources as possible, but preferably at least three.

So on the financials, you should be able to triangulate between bank statements, tax returns and accounting software like Quickbooks.

For sales verification you should be able to triangulate invoices or Quickbooks, point of sale software, and bank statements.

You can do this with inventory too. For machinery, buildings or other things that require expert opinions you’ll likely have to triangulate between what you see, what the seller says, and what an impartial third party inspector/mechanic/expert says.

NEVER rely solely on the seller’s opinion for anything. They’ll sweep so many things under the rug the floor will be lumpy. Trust but verify, every time.

If the seller truly is the only person that knows about a particular thing, ask them 3 different times, 3 different ways. If you get 3 different answers, you’ve got a problem.

When things don’t line up, ask why, why, why. Keep asking until you fully understand. If your seller is avoiding it that’s what you need to really zero in on.

What would you add? What would you do differently?

Hit me up with a reply…

Kriss the Car Wash Hustla’

PS: if you want my entire car wash course, complete with the videos on how due diligence properties, underwrite the financials, and even find off-market deals go here, it’s 33% off now.