Investment Info:

Other private money loan investment.

Purchase price: $1,800,000
Cash invested: $960,000

120ft tunnel carwash with 3 detail bays and an upstairs business office. rebranded the carwash business to match the same name and logo as two other carwashes and offered a joint monthly unlimited wash pass that was usable at any of the three wash sites! years prior the business was evaluated at $5.5 million but in its current condition we purchased it for $1.8 million!

What made you interested in investing in this type of deal?

prior to purchasing the carwash I was part owner of a mobile auto detailing company that we operated out of a 2800sqft warehouse. when we got word that a local off market carwash was for sale decided that it would compliment our already existent detail clientele and made every move possible to get it in our ownership!

How did you find this deal and how did you negotiate it?

a local marketing guru who would frequently meet with us to discuss various business strategies to help grow our detail company heard about the offer. at the time he found out about it the current carwash owners had all but signed an LOI with an out of state private equity firm but were willing to sit down with us and hear our offer!

How did you finance this deal?

a business partner of mine was able to get a $50,000 no-payments for 6 months from a family friend and the remaining $187,000 needed for our portion of the loan down payment came from a business partner that went in on the deal with us!

How did you add value to the deal?

having already been running the detail company for some time I was knowledgeable in keeping up with the needed day to day activities. at the time of purchase more than 70% of the car wash equipment was broke and not working. Ultimately we decided to completely replace and revamp both the entire carwash tunnel equipment and also completely remodel the customer lobby are. reversed the staircase to allow for a separate entrance to access the upstairs office space to rent out separate from the wash

What was the outcome?

after about $550,000 in remodel costs we reopened the wash under a new name with new logos and branding. we introduced targeted online marketing ads, negotiated wholesale pricing deals with local car dealerships to offer a year of free carwashes with the purchase of a new vehicle. created a monthly newsletter and sourced emails from local businesses. all in all I would say we double or tripled the bottom line numbers of the business in six months and boosted google reviews thru the roof!

Lessons learned? Challenges?

when partnering with people on a Joint Venture deal make sure to thoroughly layout all aspects of the companies operations and ensure that a clear understanding is made as to who will oversee what. taking the time to find the right partners can go a long way when the going gets tough or feelings get hurt. initially the deal involved partnering with a hands off venture capitol group but luckily an owner of a nearby carwash offered to go in on the deal instead and provided his industry expertise

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

other than working with a local bank to get our financing and the land and title company I think that was it.