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Are Car Washes the Smartest Add-On to Your Real Estate Portfolio Right Now?

If you’ve followed me for a while, you know I’m all about increasing cash flow with real, tangible assets not just hoping and praying the market bails you out.

After a great conversation with my friend Chris Larsen of Next Level Income, I’m convinced that investing in car wash businesses deserves a serious look as part of a broader real estate diversification strategy.

Here’s why I like it, where the risks live, and how I position it alongside multifamily, senior housing, and private credit.

Why car washes and why now

We’re late in the real estate cycle. Prices and interest rates are up, and that compresses margins on traditional buy-and-hold deals.

When that happens, I look for assets with an operational lever places where better systems, pricing, and memberships can move the needle. Car washes fit that bill. I still own dirt, improvements, and equipment (real assets), but I also get the benefit of an operating business that can boost returns when run well.

At the same time, there’s a massive generational transition underway. Many mom-and-pop operators (think single-site car washes) are retiring and looking to sell. That opens the door to acquire solid sites, implement modern systems, and when appropriate roll them up into a larger portfolio for a higher exit multiple. That’s forced appreciation you don’t get with a simple rent bump.

Memberships turn weather risk into predictable cash flow

If you’ve ever avoided the wash because it’s raining, you understand the volatility. The antidote is a car wash membership model. Instead of one-off swipes, recurring memberships convert traffic into monthly revenue that covers overhead and smooths seasonality.

It’s the Netflix-if-you-drive model: customers love convenience and perceived savings; I love stabilized cash flow. Layer in modern POS, license-plate recognition, and simple in-bay kiosks, and even smaller sites can run lean with predictable income.

Operations are everything

Let me be blunt: this is not set-it-and-forget-it. Returns live and die with execution staffing (or smartly going unattended with oversight), preventive maintenance, uptime, chemicals and water management, local marketing, and customer experience.

The right operator keeps bays humming, memberships growing, and costs in check. The wrong operator turns a good site into a money pit. That’s why I either partner with proven operators or invest through teams with a track record and real KPIs.

The roll-up advantage

Single sites can cash flow nicely, but a portfolio can trade at a meaningfully higher multiple of EBITDA than a one-off location. That spread is where additional value is created.

Centralized marketing, bulk chemical purchasing, standardized SOPs, and shared leadership all improve margins. When it’s time to exit, a clean, consistent portfolio with strong passive income through alternative assets characteristics appeals to larger buyers and can command a premium.

Risks (and how I mitigate them)

• Weather & seasonality: Memberships, local promotions, and diversified geographies help smooth the ride.

• Equipment downtime: Proactive maintenance schedules, vendor SLAs, and spare-part inventories keep uptime high.

• Location risk: Favor high-traffic corridors with good ingress/egress and strong household counts, not just “cheap dirt.”

• Competition: Differentiate with speed, consistency, and membership value (e.g., family plans, interior options at select sites).

• Execution risk: Align with operators who show real operating dashboards conversion rates, monthly churn, average revenue per member, and uptime not just pretty pro formas.

Where this fits in my broader strategy

Multifamily still matters America needs affordable housing. But in a high-rate world, I like blending stabilized apartments with alternative assets that have operational upside: car washes, select senior housing, and even private credit (filling the lending gap at double-digit yields when banks pull back).

The blend aims to keep cash flow consistent while giving me multiple levers for growth and optionality to refinance or exit when rates and markets shift.

Bonus synergy: funding with infinite banking

You’ve heard me talk about high-cash-value life insurance (infinite banking). Parking opportunity capital there keeps my dollars working, liquid, and tax-advantaged while I wait on the next great deal.

When the right wash or housing opportunity pops, I leverage policy loans, deploy into the asset, and keep my money doing double duty growing in the policy while the asset throws off cash flow. That’s smart liquidity management.

The bottom line

If you’re hunting for yield and diversification beyond vanilla rentals, investing in car wash businesses can be a savvy addition to your portfolio if you (or your partners) can operate.

Focus on membership growth, uptime, and disciplined site selection, and consider the roll-up path for additional upside. As always, due diligence and the operator you back make all the difference.