I started working in a real estate agency when I was 17. After a short stint in college, I dropped out and got my real estate license at 18.
While struggling to make ends meet, I read about the power of passive income. I wanted to invest in a business that basically runs itself. Then, like fate, a functioning self-service car wash went up for sale in my hometown of Tennessee.
Now, at 24, I earn an average of $5,450 per month in passive income from my car wash business, after spending $1,500 to $2,000 monthly. The best part is that I only work on it for 20 minutes a day.
Buying a car wash business with just $2,000 in the bank
When I bought my business, I had virtually no credit history and only $2,000 in savings. But thanks to my experience in real estate, I knew that I had several financing options available to me.
I decided to use the seller financing method. This is the moment when, as part of the sale, the buyer agrees to pay the seller’s monthly loan installments, rather than taking out his own loan from a bank.
I paid a lawyer $400 to draw up a contract that said I would cover monthly mortgage payments on the existing car wash loan, as well as income taxes, property taxes, and utility bills.
After making these monthly payments, I would keep all the profits. If I didn’t pay, the sellers would take over the property.
In May 2021, I closed the car wash, but didn’t have to start paying the bills until June. I acted as a realtor on the sale, so the sellers covered the cost of the sale (about $4,000) instead of paying me a commission. I started making money immediately with $0 down payment.
Earn passive income with a self-service car wash
I go before, after, or during work to get trash out of the wash, refill slot machines, and wash dirty car wash bays (the booths where people wash their cars). I also do preventative maintenance, like oiling the machines, once a month.
Owning my car wash has allowed me to generate an income stream on top of my 9 to 5 as a real estate agent. Last fall, I had enough money and credit to get a traditional bank loan and buy the vendor wash.
Thousands of people have used my free training to learn more about investing in a car wash. Here is my best advice:
1. Find your location.
Search engines like LoopNet Or I grew up allow you to search for commercial real estate for sale. This is how I found my position.
If you are driving through an area where you would be willing to drive and see run down or even abandoned car washes, you can use a search engine like Batch managers to find the phone number associated with the car wash, call the owner and see if they are interested in discussing a sale.
Whichever method you use to find an interested seller, only gauge their interest over the phone. Save all other questions for an in-person visit.
2. Visit of the property.
During the process, keep these questions in mind:
- Is this a good location? Is it near busy roads? Is it convenient for customers to get in and out?
- What does the equipment look like? Ask the owner how old the equipment is and how often they maintain it. If the water pumps are over 10 years old and not oiled at least once a month, for example, it may be a bad investment.
- Are there any easy upgrades that could get you more money? Don’t be afraid to buy a rundown car wash if it has good bones. I was able to double what my car wash was producing when I first bought it by buying all new hoses, brush heads, vacuum hoses and accessories, as well as all new logos and signs. I invested in this piece of equipment slowly during my first year in business, and it only cost me a few thousand dollars.
3. Ask to review the finances.
When I bought my car wash, it was already profitable. Personally, I would never buy a money-losing car wash.
Make sure that the laundry’s income covers all of its expenses, such as water, electricity, property taxes and the mortgage.
4. Focus on customer retention.
If the business you’re buying is in the green, your top priority when closing should be to retain customers. I clean my car wash and make sure everything is running smoothly every day to keep customers coming back.
To grow my customer base, I also added my business to Google Maps and paid around $150 to place targeted ads on Facebook.
The downside of owning the car wash is the cleaning involved, but I don’t mind getting my hands dirty in exchange for a few thousand dollars a month.
Hannah Ingram is a realtor, investor and mentor who advises people on how to buy car washes and laundromats. She bought her first car wash business at age 22. Follow her on ICT Tac, instagram And Youtube.