Veteran Entrepreneur Seeks Investment to Expand Car Wash Business
September 22, 2023
by a searcher from American University - Kogod School of Business in Washington, DC, USA
As a USMC veteran, I self-funded the acquisition of a 100-foot Express Car Wash in 2021 and am currently upgrading the facility to a express model. My background spans Aviation Logistics, Big 4 Consulting, Healthcare M&A, Project Financing, and EV investments. I utilized my stock profits and income from Turo and Airbnb to bootstrap this acquisition. Presently, I'm exploring opportunities for raising capital and potential partnerships as I pursue the acquisition of multiple car wash businesses within the Washington DC Metro.
Thesis & Strategy
My approach diverges from the norm; rather than following the prevalent methods employed by many PE firms and car wash operators, I advocate for the integration of car wash operations with strategic real estate a key part of this car wash business model. Designed with long term investors in mind, this strategy stands out due to its cost-efficiency, innovative utilization of renewable energy, and capitalization on tax credits. Moreover, it facilitates growth by optimizing the capital costs through cash-out refinancing of the real estate assets, setting the stage for further business growth.
Observing car wash debt and valuations trends, it's clear that many car wash establishments set up by Private Equity (PE) firms are positioned for sale, often at premium valuations. These are then frequently offloaded to subsequent investors, encumbered by added layers of debt. The popular 'sale leaseback' strategy, while perhaps suitable for PE firms aiming for a short-term exit, raises concerns about its longevity. Relying heavily on this method might prevent the next generation of car wash entrepreneurs from exploiting real estate opportunities, thereby constraining their access to cost-effective expansion capital. It's also worth noting a looming industry pivot: a significant portion of PE investments in this sector is nearing their five-year horizon. This impending shift implies that new entrants in the next 3-4 years might face operational intricacies. Our method, although demanding a longer 6-10 year view, assures sustained profitability and primes us for expansive, long-term growth.
In preparation for this venture, I've undertaken an exhaustive study of key players like Flagship, Mr. Wash, AutoSpa, Canton Car Wash, and Showroom Car Shine, giving me a comprehensive grasp of the closest competitors. This included understanding the history of the owners, the strategies of their executive teams, their vendor relationships, expansion plans, and even their daily operations. I firmly believe in a cost-effective approach that aims for a 'Costco/Walmart-like' membership and pricing model that maintains consistent business growth.
Why DMV locations?
The Washington DC Metro area enforces strict zoning regulations for car wash development in certain sectors, naturally curbing competition. My personal ties span living in four counties and working across five distinct Maryland locations. This deep regional familiarity, along with insights from a civil construction advisor expertly acquainted with Maryland's regulatory framework, positions us advantageously in our endeavors. There are potential opportunities in DC and Northern VA, I remain open to avenues that align best with the strategic vision.
In the DMV market, numerous players are overpaying for acquisitions, and some have mistakenly invested in suboptimal locations. This situation presents a unique opportunity to gain a competitive edge by establishing a new facility in close proximity to these competitors, providing superior accessibility to foster market share growth. A parallel situation exists in Ohio, which currently suffers from an oversaturated market, much like Frederick County. Nevertheless, over the next 3-4 years, these regions may become ideal for acquiring distressed assets. While we keep these prospects in mind, my primary focus remains on the DMV region and Baltimore County, where I can capitalize on opportunities that private equity firms may not yet have fully leveraged.
Business Value:
- Strategic Site Selection: Prioritizing restrictive car wash zoning, minimizing competitor entrance.
- Eco-Efficiency: Implementing water reclamation, solar energy, and sustainable methods.
- Affordable Membership & Tech: Combining automation and streamlined operations to consistently deliver superior cleaning services. Additionally, membership pricing are made affordable by optimizing costs, real time data, leveraging tax benefits, and employing energy-efficient loans that mitigate utility expenses.
Professional Highlights:
- USMC Veteran: Honorably served in the Marines, specializing in Aviation Logistics
- Big 4 Consulting: Strategize in Finance and Data Analytics.
- Healthcare & M&A: 25% IRR physician roll-ups, telehealth and carved a niche in M&A.
- Project Financing & Advisory: Political Advisor for SBA PE SBIC portfolio, Develop Finance Corp on Aerospace & Pharma CDMO project financing, Department of Energy on EV investments, USAID's investment advisor on supply chain endeavors, and more.
- Airbnb & Turo Host: Superhost on Airbnb for 7 years(800 bookings) & Superhost on Turo for 4 years (300 Trips)
from New York University in New York, NY, USA
in San Francisco, CA, USA