Development Process

CONSTRUCTION DEVELOPMENT PROCESS – CAR WASH

This is a summary of the general car wash building process, starting with our help in site selection, through to the completion of your car wash development project.  We work with you every step of the way until closing, and in most cases – beyond closing.

1. Research the Car Wash Business
2. Identify a Car Wash Development Company
3. Qualify for Financing
4. Identify and Secure/Contract a Car Wash Site Location
5. Perform Due Diligence
6. Close on the Property
7. Build your Project

 

1. RESEARCH THE CAR WASH BUSINESS

Whether you’re new to the car wash business, or a seasoned operator, research never ends.  Technology, product, and market changes are an eternal loop that cannot be ignored.  Luckily there are many places to get information on the car wash industry and car wash business, including local, regional, national, and international car wash associations, product manufacturers, and many more.  We’ve included some of these on our car wash RESOURCES page.

 

2. IDENTIFY A CAR WASH DEVELOPMENT COMPANY

There are many variables and things to consider here.  If you are familiar with construction and development, then you could probably project manage this entire process yourself.  However, for most it might be more suitable to work with a specialized car wash developer that can handle everything for you. There are full-service car wash and development companies that can work with you from day one, through the entire process that can offer any mix of the following services:

1. Education: Classes, certifications, and training.
2. Planning & Consulting – plans & renderings etc.
3. Due Diligence Process – assist with city applications and due process to obtain permits or zoning changes.
4. Construction
5. Equipment & Parts
6. Service and maintenance.

There are other obviously different levels of services offered at the various companies, but this gives you an idea of the options that are available to you. 

 

3. QUALIFY FOR FINANCING:   

This has become a very competitive industry and commercially competitive real estate market, so it’s essential that you get your lending options and pre-qualification done before you start the formal site search.

1. Find a lender that has experience in financing car wash development!  Since a car wash is a special type of use, lenders can’t really sell the notes, and others just don’t understand the business well enough to risk it.  There are many unique things in this industry that aren’t taken into account with a lender that is not familiar with it.  See our RESOURCES page for some options you can consider.

2. Get lender approval!!  Prior to investing time in locating and qualifying sites for you, we will require that you get lender approval first.   Why?   

1. The car wash industry has become highly competitive, so when we find a good qualified location, then there is a high likelihood of competitors looking in the same place, so you must be prepared to contract it immediately.
2. Seller’s in this market will typically not allow the property to be tied up in contract without receiving a lender qualification from the buyer.  

Check out the car wash FINANCING page to get more information on best types of loans to build your car wash

 

4. IDENTIFY AND IMMEDIATELY SECURE A SITE LOCATION: 

1. Find a qualified car wash site: We can help you find a qualified car wash site (Texas-wide!), and when we have enough information to move forward then we start the purchase process.

2. Letter of Intent (LOI):  Once the site has been identified, then it needs to be negotiated and secured – with the least amount of risk!  Negotiations typically start with an LOI that is submitted to the seller (or seller’s broker), which lists a summary of the primary terms that we negotiate before it goes to contract.  This will typically state:

1. the parties
2. price & earnest money amounts (earnest money is typically around 1% of price)
3. due diligence period (depending on city zoning and permit requirements, this can be anywhere from 30 to 120 days, and then 15 – 30 days to close thereafter)
4. any contingencies
5. other broad terms that may apply based on the situation.

3. Contract:  Once the LOI terms have been negotiated and agreed to, we (or your attorney) will then put this into a formal contract that is signed by all parties.  At that time, the executed contract, along with the earnest money is then provided to the title company who will open an escrow account for the transaction.

 

5. PERFORM CONTRACT, AND SITE DUE DILIGENCE:   

The contract will typically provide a period of time that you can perform your due diligence/inspection on the property – typically referred to as the Feasibility Period or Inspection Period.   A portion of the earnest money (usually between $100 to $1000 – depending on the property) will be used to pay for this “look” time.  This fee buys you the 30 to 90+ day Due Diligence Period.  This is your time to inspect and determine zoning and city requirements, and if the site will work for you and your intended purpose, and of course to finalize financing approval requirements.  

During this period, and hopefully it was written this way, is that you usually have the ability to cancel the contract at any time, and for any or no reason.  If you cancel during this period, your earnest money will be refunded to you – except for the “look” fee.  See more on our car wash DUE DILIGENCE page.

 

6. BUILD YOUR PROJECT:

While your development team is constructing your car wash, you will be working a step ahead in getting launch, marketing, websites, scouting for management and talented staff, and more exciting things.  

If you’re project managing the process yourself, you may need to hire a marketing company to get you ready for your big day.  

It’s challenging but exciting stuff.  There’s so much more information we could provide on site development, but it would be information overload.  However, feel free to reach out and contact us.  We’d be happy to share our experience while finding you the perfect location for your new car wash business!

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