As An Investment, Carwash Or Apartment Complex?

kdub1777

Hello, I am looking to build, with an investment partner, a self serve carwash or apartment complex. We are looking at these because we believe we can run them without much time taken away from our jobs. Both ideas will be in the $1 Million- $2 Million range. We are looking for the best investment with highest cash flow. Has anyone here had experience or have owned either a self-serve car wash or apartment complex? Are there certain things in these fields we should watch for and watch out for?

We are in the beginning phases right now. If anyone has any other ideas for a good investment feel free to mention them, except for the stock market. As you can tell, I like building things.

747

UMMMM there is a guy in the town where my sister lives momence that built a car wash about 4 years ago. he makes a killing. He also is the guy that owns the funeral place in that town. Cotter is his name. It is the only car wash in town. Its two stalls and a automatic...Auto is 5 dollars. I have only used it once because i live in manteno. Know the apartment complex. You could cleanup if the town has a University in it.

Cole

There are pros and cons to each of your choices.

I can speak for a car wash though, I know a guy that makes a lot of money from his car wash.

But he also has 2 more that dont make that much.

Its all about location, location, location.

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Cole

I started to think about this a little more. what size apartments would you build?

Would you sell them or have a company lease them?
How furnished would they be?

I just think for your price range a car wash seems to be a better choice.

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Patrick

Gotta go lazer with the car wash, thats the only way to go. PK

Patty

Some pro's and con's to consider.

Car Wash: High employee turnover rate. (Con)
Lots of cash pouring in. (Pro)

Apartment Building: Deadbeat renters (Con)
Real Estate is Historically THE BEST investment over
Time. (Pro)

Oh Heck, build both, and have the Best of Both Worlds!

kdub1777

Well, I live in a town with a larger college. If we were to build an apartment complex it would be geared either toward the college students, or we would have a gated community with less apartments that is geared toward the higher end luxury group in town. This would include pools, exercise room, tennis courts etc. Because of the cost involved, we would start with a certain # of apartments and buildings and then build more buildings on the land when we can financially. I think we might have an option for furnished or not furnished apartments. Give people every excuse to rent. For the right price each of these ideas would be for sale or lease on day 1.

As for the car wash, we have a great piece of land in mind that could make a killing. 1/4-1/2 of the town that would ordinarily be using other washes would probably start using ours because of the location. The only problem is that they want the price of your first born child for the lot. I have not been able to find any numbers out there in terms of self serve car wash income. This seems to be a "secret" in the car wash community. If the income for the car wash isn't what we expected than the price of the land to build on will bring us down.

By the way, what do you mean go with lazer for the wash Patrick?

Thank you

kdub1777

Patty that might definitely be the plan if we can start off profitably.

Cole

In that case go with the apartment complex.

Go talk to your area apartment leasing offices and ask some questions about occupancy etc...

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Patty

Kdub, you will have a difficult time getting exact numbers unless you personally have a friend who will divulge this information. Reason being, the 'cash' factor creates a HUGE unreported income and people are a bit leary of telling you the REAL numbers. Same goes for the fast food industry.

I think the trick in the car biz is to have THE BEST system in the area. People would rather go to a car wash that costs a bit more where the automation is scratch-free and state-of-the art. Patrick might be referring to such a system.

Have you researched your options as far as what TYPE of equipment is the BEST? Would you offer hand-detailing packages or just a drive-thru system? There are so many ways to go.

PipeGuy

Car wash. Cash binness baby

mrmojo

i have always thought that a mobile home park would be a good investment
no rentals bring your mobile home (new -er)
park it on the land i own,pay everything for yourself just like a person with a real house would have to do
and send me 200- 300 dollars a month to park it there
mow your own patch of grass out front i'll maintain the pool for all of you and take care of the common areas

Woz the Painter

If you build a car wash only, what happens when a big oil co., builds across the street, or down the block, and offers gas and a convenience store, plus a car wash? If you build apartments you can't rent some, then sell 1 or 2 for the right price! Either build rental apartments, or build a condo or townhouse project where the units would be sold. Look into building a senior or low income [subsidized] building, the govrnment will float you low cost loans, and will basically guarantee your rents.

PipeGuy

Really? How exactly does that work?

PipeGuy

FYI Kdub: I spend $25 every week having my truck washed at a local car wash - within 1/4 mile of at least six 'one-stop' stations. The business at the car wash is so good they pay an off duty police officer to manage trafiic because the cars line up down the block and out onto a busy county road. I've seen people wait 15, 20, 25 minutes to have their cars washed. This is not, by any means, a unique phenomenon. My uncle owns a used tire business that operates in one-half of a building in which a car wash operates in the other. The car wash is open 7 days a week and when the weather is good has a steady, often above capacity, flow of cars. Again, the business is within 1/4 mile of three or four one-stop gas stations.

Unpredictable competition will always be a factor in any business. If I was considering the risks involved in opening a car wash, over supply of existing car washes would be a lot higher on the list of considerations than some phantom future competion.

PipeGuy

Kdub? Hmmmm? Is 'kdub' still a slang expression?

Grumpy

As interest rates rise less and less people will be able to afford to own housing, thus more people will seek out rental units to call their homes.

If I had the money to do both, I would, but if I had the money to do only one I would go with the rental for sure.

Obviously it's not that simple, I'd want to buy low, in a neighborhood which is coming up, rather than buying high in a neighborhood that is going down... but rental is where it's at. Think about it this way, if you ever need to liquidate, it will be much easier to dump a multi-family building than a car wash. Also think about it this way, you can own the building for 20 years, gut it, update it and sell it off as condos. You can't do that with a car wash.

realpurty2

Car Wash-
Cost less to build.
Takes no employees other than someone to clean out the bays
Lower property taxes and insurance cost than a rental unit
Little maintenance or repairs (in comparison to having to re-do an apartment everytime someone moves out)
Customers pay for use before services, unlike renters who can get behind
Also, you have to go to court and spend money and time to evict someone, but a car wash... no hassles
Cleaning solutions aren't expensive, highest overhead is electricity.
Consider income from adding vending machines and a self service dog wash. (Dog wash has been very popular here!)

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Mike Finley

Food for thought - Carwashes as business investments in Colorado about 8 years ago were so hot that when they were listed for sale by business brokers there were sometimes bidding wars for them.

Then along came the drought we experience and are just getting out of after 5 years. Car washes and the huge preimiums they had to pay for water usage became big losers, they couldn't give them away.

You may not have water issues where you are, but neither did we 6 years ago. Just food for thought on an interesting topic.

Woz the Painter

Pipeguy.... heres how it works, in the mid 80's I did some work for a local developer, he was building 400 rental units in a suburb of Chicago to be rented by low income seniors. Knowing that he had previously built a lot of upscale projects, I asked why he was building a subsidized project. His answer was... instead of paying 10 1/2% interest on his loan, he could finance this project for 4%, after construction he could rent the apartments for the market price in the area, but his tenants would only pay according to their income level, with the difference being paid by the federal govt. And lastly the suburb and county were giving him huge real estate tax breaks.