Thanks for posting about this, and my research thus far had it show up. I already bought plane tickets, and booked my hotel room, it will also be a nice vacation for us. My wife's best friend is going to come stay stay with grandma for the week we are away.
Building a car/truck wash
- Thread starter TimeFlies
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Thanks for posting about this, and my research thus far had it show up. I already bought plane tickets, and booked my hotel room, it will also be a nice vacation for us. My wife's best friend is going to come stay stay with grandma for the week we are away.
I have been around the quick lube and car wash business for decades.
Car washes may seem like cash cows and a friendly business.
This is far from reality. They are expensive to design/permit and build.
The environmental regulations are crazy. Insurance is a big nut.
Quality equipment is vital and costly and one should never go the cheap route.
Product, maintenance and repairs are an ongoing expense. Hands on owners
who can maintain and repair have better odds at success.
As stated above, competition is fierce. Seems like a wash on every corner.
Rollover/brushless are easiest but, in most cases, do not wash as well.
Full serve washes require employees. That's a sh! tstorm in itself.
Feast or famine cycles. Snow and salt and your swamped. 20 summer days of no rain? Slow.
No doubt there are washes that are very successful and extremely profitable.
They are the exception.
YMMV
Car washes may seem like cash cows and a friendly business.
This is far from reality. They are expensive to design/permit and build.
The environmental regulations are crazy. Insurance is a big nut.
Quality equipment is vital and costly and one should never go the cheap route.
Product, maintenance and repairs are an ongoing expense. Hands on owners
who can maintain and repair have better odds at success.
As stated above, competition is fierce. Seems like a wash on every corner.
Rollover/brushless are easiest but, in most cases, do not wash as well.
Full serve washes require employees. That's a sh! tstorm in itself.
Feast or famine cycles. Snow and salt and your swamped. 20 summer days of no rain? Slow.
No doubt there are washes that are very successful and extremely profitable.
They are the exception.
YMMV
After basic digging the permits and truck wash whether a wand, arch type automatic or custom build start to add up. There are a few car wash forums around with owners, and people in the industry. I know that some car washes use cheap chemicals that are toxic. Some will etch or spot bare metal found on tanker trucks.
https://www.carwash.com/ <<<<< You can start here. Check also your local regulations. Some towns and municipalities highly regulate these businesses. Some never get approved because of noise from the blower / dryers. Also local water boards are afraid of consumption limits being ignored. They heyday of this business was in the 60's and 70's. It is is still possible to make a go today, but you really have to work around the regulations to make it practical and without major headaches.
Bonus depreciation, aka a massive tax break.
Typically, companies are allowed to depreciate assets 20% a year over 5 years.
In 2017, the Tax Cuts and Jobs Act had provisions to allow certain business, through bonus depreciation, to depreciate 100% of their assets in a single year. Car washes were one of these businesses.
Private equity caught wind and went bonkers with car washes: A largely automated business with minimal employees, low input costs, and a subscription model to keep customers returning, a low overhead investment that can bank land for future sale, AND the ability depreciate the entire investment in the first year?!?!? It's almost like the law was written exactly for this type of avoidance and sheltering.
In an effort to make America's tax structure great again, I'm sure they'll be more of these lucrative incentives in the next tax bill. We all know how private equity keeps the USA employed.
Re the McDonalds, I have been much less of a customer than I have been before they started charging $15-18 for a value meal. Others feel the same and I wonder if the franchise value has been dropping. I don't have access to those sorts of figures but you might look into buying a distressed operation at fire sale prices.
Re card-lock gas stations, you can get people spilling fuel and they might be worse about it with no attendant present. (Or who knows, you might get a more professional clientele vs the sort who want cigs and scratchers from where they get their gas.) Wife does environmental cleanup and remediation, that costs some real good money.
Incidentally after a day of driving around in mining talings or whatever she takes her rental truck to a car wash so your discharge could still be interesting.
Re card-lock gas stations, you can get people spilling fuel and they might be worse about it with no attendant present. (Or who knows, you might get a more professional clientele vs the sort who want cigs and scratchers from where they get their gas.) Wife does environmental cleanup and remediation, that costs some real good money.
Incidentally after a day of driving around in mining talings or whatever she takes her rental truck to a car wash so your discharge could still be interesting.
Look here.
They also have a decent water recycling system that helps with local environmental permits and approvals.
https://colemanhanna.com/equipment/conveyor-equipment/
They also have a decent water recycling system that helps with local environmental permits and approvals.
https://colemanhanna.com/equipment/conveyor-equipment/
I agree car washes are popping up around here, and surprisingly close to one another. That and Maverick gas stations. Interesting because I thought ICE was dying and we'll all use public transportation and love it.
A church member manged one of our newer washes. It hooked your left front tire and pulled you through the long building. His stories of employee problems (of course) and equipment failure would make me run the other direction. Plus you've got the people who drive over the rail, get sideways etc etc.
Their machine/screen to pay and choose your wash selections was so complicated they tried to have an employee standing there at all times to guide you through it. I admit I'm not down with the Insta-Tok and Chat-Chat but I'm used to digital touch screens, and I found it daunting. I was glad there was a guy there to help me.
A church member manged one of our newer washes. It hooked your left front tire and pulled you through the long building. His stories of employee problems (of course) and equipment failure would make me run the other direction. Plus you've got the people who drive over the rail, get sideways etc etc.
Their machine/screen to pay and choose your wash selections was so complicated they tried to have an employee standing there at all times to guide you through it. I admit I'm not down with the Insta-Tok and Chat-Chat but I'm used to digital touch screens, and I found it daunting. I was glad there was a guy there to help me.
Its rediculous how many car washes have popped up here in the last few years after there being none forever. I can think of 5 right now, plus one that got started, then mothballed, and it appears started again, and another one that is under construction.
I would have to think if the economy goes south that is one of the first things people cut from there budget - the $20 car wash, or whatever a month car wash club?
I wash my car with my hose and bucket. Call me old fashioned.
I would have to think if the economy goes south that is one of the first things people cut from there budget - the $20 car wash, or whatever a month car wash club?
I wash my car with my hose and bucket. Call me old fashioned.
It's the planet fitness theory. You charge just enough to make money throughout the year, but not soo much that people will cancel it, thinking "ehh it's only $20, I'll go back eventually."
Its a mix - McDonalds corporate in some cases owns the whole thing and leases it back, and in some cases the franchisee owns it.
But your correct. My understanding is the "out" is the franchisee works like a dog at it for 20+ years to cash flow the costs and pay themselves a bit, and eventually gets to sell the franchise to the next guy for a big profit. Sounds a lot like a ponzi now that I write it out.
She would own the McDonald's, not be the operator of a corporate owned location.
Her cousin owns a McDonald's location, does EXTREMELY WELL!
Cardlocks are great if in a good location, and this location would be perfect for one, and I already own other cardlocks. The only products it would have are clear diesel, and DEF.
Her cousin owns a McDonald's location, does EXTREMELY WELL!
Cardlocks are great if in a good location, and this location would be perfect for one, and I already own other cardlocks. The only products it would have are clear diesel, and DEF.
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My uncle used to build these things (part of a crew/foreman) all over NYC/LI, Phila. and NJ. One thing I remember him saying is you'd never want to build one if you don't own the land/building. I get it's common sense but having never owned a 2nd property a lightbulb went on in my head. How often today do we see restaurants that have been in a location 20-50 years, close because the "rent" is too high
Another thing at least 10 years ago that was remarkable--the internet which often was say comcast business....if it went down, the whole operation closed. No way to handle payment, back then RFID, etc. Seemed like a lot rode on a cheesy service
Another thing at least 10 years ago that was remarkable--the internet which often was say comcast business....if it went down, the whole operation closed. No way to handle payment, back then RFID, etc. Seemed like a lot rode on a cheesy service
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TimeFlies contact Sonny;s car wash and they will be happy to help. I've built a half dozen in my life. If zoning is there, you should be golden. Keep in mind that the equipment has a short lifespan so its not like you can build and forget about it. Don't get cheap on equipment. There is a ton of stuff out there coming out of Spin but its almost impossible to repair. SPend the money on water reclamation too. THe last one I built I even went as far as to use biodegradable fluid in the equipment, just incase there was a line break or something.
McDonalds is nice and virtually risk free but the return is low and they typically will want you to build and allow an initial 10 yr term, check your math before getting into that. THere are better QSR's to look at.
Seek out a CCIM in your area and have them do a gap analysis and that will tell you the need for either in that particulat area.
McDonalds is nice and virtually risk free but the return is low and they typically will want you to build and allow an initial 10 yr term, check your math before getting into that. THere are better QSR's to look at.
Seek out a CCIM in your area and have them do a gap analysis and that will tell you the need for either in that particulat area.
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AS mentioned (partially) if you build the car wash you can benefit from excellerated depreciation. It doesn't work as posted and this will be a very over simplified explanation of how it works.
Commercial property is depreciated over 39 yrs, so take the cost of capital improvements, NOT land and divide that amoiunt over 39 yrs. THat will be your annual deduction to ofset net profit. Excellerated depreciation comes into play when you hire an expert to say, X amoiunt of this property will only last X years so you can divide that amount by the new time frame. Make sense?
The downside of depreciation however is it is nothing more than a loan from the IRS. Once it is sold, that money or a portion of it must be repaid or rolled into a new property. That is called recapture tax.
Commercial property is depreciated over 39 yrs, so take the cost of capital improvements, NOT land and divide that amoiunt over 39 yrs. THat will be your annual deduction to ofset net profit. Excellerated depreciation comes into play when you hire an expert to say, X amoiunt of this property will only last X years so you can divide that amount by the new time frame. Make sense?
The downside of depreciation however is it is nothing more than a loan from the IRS. Once it is sold, that money or a portion of it must be repaid or rolled into a new property. That is called recapture tax.
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Also they close when they want. With a monthly, we don’t care if it’s raining, we want the salt or dirt off. But this is not profitable so they close.
I always have a hard time picking the correct lane. There are many who cannot complete the car wash transaction without assistance. It will usually be a fancy car driver that this happens too. Usually junk car drivers sail through but I hate being behind them they can ruin the equipment or transfer sediments. Once I was behind a jeep who had clearly gone off road.
The laserwash 360 couldn't be easier, or more foolproof for anyone to use.
I've never seen anyone in front of me have trouble with it.
Then drive inside until the lit up sign says stop, and stop.
You just sit there, and the wash arms move around your vehicle. When done it says thanks, please exit, and you drive away. Your vehicle doesn't move while being washed. As you drive away you can choose to slowly exit under the overhead blow dryer, or not.I usually don't waste much time under the dryer, I just drive away, because 40 seconds later I'm on the hwy heading home and then the speed dries my pickup. So why waste 40 seconds slowly creeping ahead under the dryer leaving.
I've never seen anyone in front of me have trouble with it.
Then drive inside until the lit up sign says stop, and stop.
You just sit there, and the wash arms move around your vehicle. When done it says thanks, please exit, and you drive away. Your vehicle doesn't move while being washed. As you drive away you can choose to slowly exit under the overhead blow dryer, or not.I usually don't waste much time under the dryer, I just drive away, because 40 seconds later I'm on the hwy heading home and then the speed dries my pickup. So why waste 40 seconds slowly creeping ahead under the dryer leaving.
This has been discussed before. Most carwashes are owned by limited partnerships. Carwashes are a great way to have an income stream while you wait for the land underneath to appreciate. Limited Partnerships love this business model.
