To advance the mission of finding auxiliary income streams that could exceed gross scheduled tenant rents and to promote innovative landlording, I offer another fictional story. (See my last fictional story: Science Fiction or Your Future? The Story of Tomorrow’s Landlord and the “Tenant-Proof” Apartment Complex)
Dean Martinez pushes an orange button on his smartphone as he places a bag stuffed with laundry outside his door. Fifteen minutes later he gets a text message from ICE Laundry, confirming the pick up and offering him three options for delivery. “Ahh, now this is the way it’s supposed to be. I can really get used to this!” says Martinez.
And many locals are “getting use to it” as ICE Laundry grows its customer base.
The Laundry Room That Has an Apartment Building
ICE is far from an ordinary laundry service. The business is owned by Larson Martin’s investment group. They operate ICE from a converted apartment unit inside an eight unit complex that they also own. Martin says the laundry service is simply a mechanism to get non-tenants to fund their real estate investments. And the stunt appears to be working.
Martin says they have a three part strategy to:
- buy multifamily rentals in densely populated areas,
- operate a hyper-local service business from one of the units, and
- grow the business until it can pay the entire mortgage.
“We are not going to get rich running a small business, but we can create a couple of jobs and make enough to pay the mortgage.” Martin says they love their tenants, but the hyper-local business model is what’s allowing them to scale their multifamily portfolio with confidence.
The Story Behind ICE Laundry
Martin is a big fan of Wash Cycle Laundry, a Philadelphia-based laundry service that uses bicycles couriers. So when waterless laundry machines became commercially available, he says, “I connected the dots.”
ICE is a very lean operation consisting of two employees, a virtual assistant, and one leased machine. The also rely heavily on their smartphone app, website and a lot of decision science to manage what could be a logistical nightmare.
“Getting the smartphone app right was the hardest part,” says Martin. The app is the interface that handles all the orders, collects payments, and schedules pick-ups and deliveries. We have a strong local presence and work hard at our community involvement. We also send a lot of automated text updates, so our customers have a high level of trust with us.”
ICE uses a dry ice laundry machine that processes loads in just 3 minutes. This allows them to offer same day and overnight service for $12 a load. And since fading is not an issue, a load can be a combination of both colored and white fabrics. No more separating clothes!
Martin shared that ICE is close to processing 200 loads per week, which is enough to cover employee payroll, the machine’s lease, and the apartment’s mortgage.
Besides growing their existing customer base, Martin’s investment group plans to buy other multifamily apartments in major cities. He said the hyper-local business they’ll operate may not always be laundry, but creating jobs and having the business pay the mortgage will always be cornerstone.
What Do You Think?
Should landlords be entrepreneurial and expand on auxiliary income opportunities or should they stick to property management? Please leave a comment and tell me what you think of this fictional account.
Photo Credit: ohmann alianne