Buying a Car Wash in today's economic climate requires that you, the buyer, be as informed and prepared as possible. Given current market conditions, as a car wash buyer you must realize that you are competing with professional business buyers that are organized, informed, and ready to pull the trigger when the ever so rare good deal presents itself.
What do you need to do to get ready to buy? What can be done to speed up the search process? When I find a good deal, how do I get to closing?
The first step is simple. It is deciding to buy. Once you have mentally made the commitment, and you are firm about the fact that you are ready to buy a wash, the process has started.
The second step is to decide what kind of car wash is right for you. This is extremely important. How much time do you have available to commit. See the Types of Washes button on our home page to weigh the pros and cons of different wash types to determine which is right for you.
Gather your Documents!
There are some things you need to prepare for the brokers when they start coming to you with possible businesses. You need to get your documents together. You need to make sure that you have your down payment sorted out. Initial capital contributions are anywhere from 20% to 50% of the selling price. Why such a wide rage of money down? It depends not only on your strength as a borrower, but also on the strength of the property as well. How are the finances of the property? Has the seller kept good records? Has he reported all of the income that the wash produces? Some of the best buys have weak finances. It may look like the property is not performing when it is actually a cash cow. How do you tell? With a wash that has weak finances, the lender may require a larger down payment. Be prepared to verify income and asset information. Lenders may want to see three years tax returns to verify income, and your most recent account statements to verify assets. Knowing how much of a down payment you can come up with can determine how much you can afford to spend.
There are Financing Options to consider. You can get yourself pre-qualified for a conventional business loan or an SBA Loan. Again, if you are looking at a car wash that has a substantial amount of unrecorded income, you are looking at a large down payment, or seller financing. There are many things to consider with regards to financing a wash. See our financing button on our home page to learn more about different financing options.
Lock it up. If you find a wash that you are serious about, put it under contract and begin the due diligence. If you plan to check out every detail about a wash before you put it under contract, you will probably lose it to another more serious buyer. Good deals don't last on the market very long. We have seen too many buyers suffer from what we call "....analysis paralysis...." When the rare good deal presents itself, you have to be ready to pull the trigger. Don't lose a good deal. They are not always easy to come by. Lock it up, and then do your due diligence.
There is one final set of actions that are vital. Your offer is in, the seller has accepted, but you are not done yet! Due diligence is required. Here you must get documentation on the financial figures you have been given. You want to verify that what you have been told is indeed the case. Get Profit and loss statements, business tax returns and other important documents. We can help to guide you thru the potential pitfalls during due diligence and get you to the closing table. Allow us to put our experience to work for you today.
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