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

2 min read
Al Williamson

Al Williamson is a former civil engineer with over 24 years of experience investing in real estate, including single family, multifamily, house flipping, commercial, and short-term rental properties. He’s a nationally recognized authority on short-term rentals and has been featured on many podcasts and numerous real estate conventions and REIAs since 2014.

Experience
Al worked as a professional engineer while he purchased and self-managed a small rental portfolio. His goal was to replace his engineering salary, but he got side-tracked.

Al discovered that making money without purpose was unfulfilling. So, he decided that he would only prosper to the extent he helped others. That’s how he ended up assisting an inner-city neighborhood to get back on its feet.

Al learned that landlords could provide leadership as an investment strategy. He talks about this at length on BiggerPockets Podcast episode #8 and in his first book Building Wealth with Inner City Rentals.

After Al’s neighborhood became one of the hippest places in Sacramento, Calif., he switched his focus. He realized that the majority of landlords were not collecting the cash flow they expected. In fact, most were barely breaking even before taxes. So, Al went on a five-year quest to collect ancillary income ideas to supplement his rental income. He publicly documented his journey to pay the monthly mortgage of his eight-unit apartment complex with new revenue streams that didn’t include rents.

Al accomplished this mission in 2015 and placed his findings in his book 40 Ways to Increase the Net Income of Your Rental Properties. Through writing 40 Ways, Al realized that the traditional rental business model was the least profitable way to operate a rental. This insight led him to switch his holdings into a short-term rental mode.

Upon further refinement, he optimized his operation to extended stay rentals (stay of 30+ days), because that business model yielded the same high net income with a lower hassle factor.

Al’s journey resulted in him replacing his engineering salary with income from his extended stay rentals. He “retired” at the age of 50.

Now Al coaches others through his training program, Extended Stays for Landlords, and enjoys inventing new ways for landlords to increase their income and reduce expenses.

Education
In 1989, Al Williamson graduated from the University of California – Davis with a B.S. in Civil Engineering. In 1994, Al graduated with an M.S. in Civil Engineering from the University of Illinois – Champaign-Urbana.

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Instagram @Leading_Landlord
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Al’s blog LeadingLandlord.com

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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