Science Fiction or Your Future: Space-Age Laundry Room Lets Landlord Declare Tenant “Independence”

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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)

The Story

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:

  1. buy multifamily rentals in densely populated areas,
  2. operate a hyper-local service business from one of the units, and
  3. 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.

What Next?

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

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About Author

Al Williamson (G+) helps landlords increase their monthly income by sharing unique tips to save money. He blogs at LeadingLandlord.com and is also the author of Building Wealth with Inner City Rentals: Success the Catalytic Landlord Way and an active BP member.

17 Comments

  1. Al, do you have a link to anything that can substantiate this article? A quick Google search has absolutely nothing on machines like this (that use dry ice to clean clothes) existing and yet you’re claiming that Martin is doing 200 loads a day with this service. Its really interesting and absolutely amazing if its true. I just can’t find any proof of it. I’m not from Missouri however I still need you to “show me”, thanks.

  2. I would have never thought about this concept but i can see the magnitude of something like this working in the proper location. Its pretty creative and very effective i might ad. Its almost like you can’t just look at a apartment complex as just an investment. Its like an investment/business opportunity in the making. The cool thing about a concept like this is referral information. Many of the users of this service can input their information, be contacted as a follow up and can become a future renter of buyer of 1 of your future investment properties. Very interesting!
    Great Article!

  3. I think finding additional income streams is an obvious thing to do. At our self storage facility we have different revenue streams – we sell moving and packing supplies, we sell tenant insurance, and we will probably add a truck rental vendor this year. Why wouldn’t an apartment building want to do the same? it just makes sense!

    • Alison,
      Thank you for the ideas. Yep, the concept of trying to find additional revenue streams is obvious, but difficult. And when you’re struggling to shake a traditional landlord mindset, coming up with fresh concepts can be mentally exhausting (even for us creative types).

      However, when people like you share awesome tips, it make my goal of compiling innovative ideas for landlords SOOO much easier. I’m adding your suggestions to my list.

      Thanks for pulling me out of my mental rut.

      • Al,

        We’ve spent the last 18-months exploring/expanding on partnerships with other local businesses: Our “Take me Home” programme with a cab company for our students; welcome baskets containing coupons to neighbourhood cafes, pilates studios, markets and a trial programme with a local self storage operator.

        The original intent was to offer added value services to our tenants for the purpose of reducing turnover and to achieve it with little extra work and no additional costs to ourselves. We also make a conscious effort to promote other {small} local/neighbourhood businesses.

        However, outside of “alternative infrastructure” leases {roof space for cellular repeater, (possible) lot space to Canada Post for mailboxes}, we have yet to transform any of these services into additional revenue for ourselves.

        One of our long term tenants runs a cleaning service. We already engage her to freshen our units during turnover / after renovations. She and I have discussed offering an optional housekeeping service to our tenants – initially focussing on a twice monthly service to the students. We would receive a small revenue stream for our part in generating and booking the leads. It’s a small start to bridging from “value add” to “revenue creating” offerings.

        • Roy,
          Thanks for sharing. I knew you had your fingers in some innovative things but had no idea you were crazier than me.

          My next, and possibly final, post in this series will cover a landlord who tries to maximize the “housing package.” I’ll be in touch to pick your brain.

  4. Love this Al! The dry ice 3 minute laundry may be a stretch, but the concept of an onsite laundry service that also happens to server the public is not. Here in my city there’s a 6 plex for sale that also has an attached small public laundry facility. I think about 8 washer, 8 dryers. So tenants use it and the neighborhood uses it. Unfortunately, the sales price reflects that and they want a fortune for it. :(

    • Jeff, you’ve caught the essence of what I was driving at. If a landlord of a six-plex could find a way to drive up auxiliary income, they could demand a fortune for their property.

      My mission is to be the guy who does something to his property that doubles the NOI.

      It’s fiction for now BUT with the help of my BP family, the smartest people on the planet, I know it can be done.

      • yeah, i’m with you there. In a building with the right layout, and in the right location, giving up a unit and converting it to something that generates more than rent seems intriguing. Yes, you could probably make it work with one super sized washer and one super sized dryer and keep them constantly going and generating revenue.

  5. Dang, I wanna be able to mix my color and white clothes, haha!! Extremely creative, Al, and really gets the wheels turning!

    • Thanks for chiming in Ms. Tzib. Got a personal question for you? How much down time does your multifamily’s laundry room see? If you consider it untapped potential, then what should you do about it?

      Help me brainstorm.

    • Hey Aaron,
      The book will be out in 2015 if enough folks express interest in landlord fiction. It’s a new category so this is my lean start up testing grounds. The next post in this series will be about a landlord who completes for his tenants’ full paycheck.

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