Anyone have experience in buying a laundry mat?

Question

I'm thinking about buying a laundry mat, but have no idea where to start.  Any tips would be greatly appreciated.

Bianca Mendoza · Answer

Look for podcast called laundromat resource or their youtube videos. Is like bigger pocket but for laundromat. Check out Coin Laundry Association and signed up for their magazine Planet Laundry.

Henry Clark · Answer

A.  Unless your mechanically handy your maintenance costs will eat you up.  Make sure that is part of your deal analysis

B. If managed by the owner currently and you plan to hire people add in a 30% loss of revenue. This is a cash business. Move to an electronic card system even for the soap dispensers.
C. Take an inventory by age of all of your equipment. Run every machine with a load in it. If old equipmEnt you need to add $xx,xxx capex costs for the next theee years while you clean things up.

D.  Check your infrastructure.  Roof, plumbing, hvac, water heater, etc

E.  This isnt passive or a side hussle.  Quit your job and take this on.  Can do your REI while doing this.

Henry Clark · Answer

@Paul Meyer  have you answered my notes above?  It could be free and still be a bad deal.

Make a Due Diligence list.

1.  When does the building lease expire?  What happens if not renewed?

2.  What would be the Electricity/gas/water be if you had to move?

3.  Insurance?

4.  Are you mechanical?  Have you taken an inventory?  Old machines are okay if they were just purchased refurbished 2 years ago.  Or are they that old?

5.  If you don't plan to Scale this to other locations, don't learn a new business.

6.  Most of their money is walking out the door unless they are there 24/7.  If they are there, then their numbers are accurate except for cash on the side.  If you bring in temps, they will take cash off the side, unless you move to card readers for everything and cash controls.

7. Take your Home Flipping due diligence approach and apply it to this model.  But the lease is your key question.

Jeff Hassannia · Answer

What in particular are you trying to understand?  In the early 2000's I owned the highest grossing (per square foot) laundromat in Los Angeles county.  I learned a lot.

Devon Edwards · Answer

@Kevin C. owns a couple here in Anchorage. Try reaching out to him via DM.

Paul Meyer · Answer

can you give me your feedback @Jeff Hassanniaeff @Henry Clark

I'm looking at a small laundry mat 15 dryers/15 washing machines. Mostly all older equipment at least 15 years old. The place is clean not attended. Owner is motivated to sell and says expenses are $2300/month (includes lease rent 1700+600 in electricity/gas water included in rent). Says averages $7000 month income. She says she only cleans it every night and collect change 4 hrs a night. Open 7 days a week 6am-9pm.

All income is from machines only. Wash/dry/fold services could be added and are wanted by customer base. She was $130,000 for the business. This number is a low multiple if she is earning $84k year gross.

I flip homes and my business has slowed and would love to manage it full-time still self-service style but add some wash/fold/dry a few days a week for additional income and update machines and coin to card reader. A lot of things are not used in store. 2 coin machines, 1 is broken and could be replaced by a card reader, large vending machine empty, soap vending machine coins could be converted to card. And manager/wash/dry/fold office not used. Its only 15 units in around a 600sqft store. Bright and clean.

I'm just worried about a lot of maintainence on older machines and whats a good price to be firm on since I could be replacing a lot of machines. Its a nice shopping center in demographics that will continue to use the space.

Is $130k too high or what would you offer with the information provided. I want to keep this mostly self-service within minimal management/part-time employee. I'm not interested in being their 12-15hrs a day (comes out to $10/hr or less possibly)

thanks!!

Shanon Hansen · Answer

HI Jeff!

Im researching to possibly start a laundromat. Im considering buying the building instead of leasing and possibly doing a franchise. Do you have any advise around that?Thank you!

Jerry V. · Answer

As an example of an "upscale" and/or automated Laundry Mat, check out Zoom Express Laundry in Richardson, TX.  I went there to drop off something for a person working there and, stopped in my tracks!  "Modern" laundry mats are NOTHING like I remember from long ago! hahaha

Oh, looks like they've changed names (owners?) to Revolution Laundromat ... hey, it's a cash business (like car washes), this happens! (no, I have no part in their business or affairs!)

https://revolutionlaundromat.c...

Joseph Gozlan · Answer

@Anna Washburn are we talking about buying the building, the business or both?

Anyone have experience in buying a laundry mat?

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