Anyone buying retail space with laundromats?

Question

I was just curious if anyone else is buying retail space with laundromats. I'm a multi-laundromat and have greatly benefited from the cash flow laundromats can bring and the potential equity gains you can achieve by owning the real estate the laundromat is on. Anyone else going this route? I'd be curious to know how it's going for you.

Jordan Berry · Answer

@Shin Bo it's definitely viable in a variety of contexts. The big question is, are there enough people to support the business? Population size and competitor density are the biggest factors in that. Dense urban areas obviously have more people but there are typically more competitors nearby also.

I have a website with a bunch of free information and resources, and a newly released free ebook, The Keys to Buying Your First Laundromat, that should give you a pretty good idea about what it takes to own a laundromat and how to get one if you decide it's right for you.

DM me for the web address if you're interested in checking it out.

Jordan Berry · Answer

@Michael Jones I'm in LA in lower rent areas for sure. But I'm seeing close to a 30% cash on cash return, unleveraged. And as business improves, expenses rise at a much slower pace since there are high fixed costs but relatively low variable costs. So I'm seeing closer to a 70% return on the new business I'm bringing in.

Jordan Berry · Answer

@Gaspare U. I think that's probably the case for the owner that doesn't reinvest into the business. When you're trying to milk machines 10+ years past their usable life repairs end up costing an arm and a leg. But that shouldn't be the case for a well run laundromat.

Jordan Berry · Answer

@Ronald Rohde I'm doing that with one of mine. I just had it rezoned to high density residential and I'm planning on building apartments there in the future.

Greg Dickerson · Answer

I have owned buildings and strip centers with laundry and dry cleaning tenants but have never ventured into the business itself. I like them as tenants but would need more scale to own the business.

Jordan Berry · Answer

@Tucker Spillane I'm familiar with Eastern Funding. It's cool to get the perspective from the lending side. Thanks!

Tucker Spillane · Answer

@Jordan Berry

I work for a bank out of NYC (Eastern Funding) and our niche market is financing laundromats around the country. I also underwrite SBA real estate loans as well for these owners. Through what I have seen from many multi store owners is that it is an incredible way to build a great commercial real estate portfolio at the same time. Great combo for fast wealth generation.

Shin Bo · Answer

Im actually pretty interested in this topic as someone hears about this business all the time but yet has never needed to use a laundromat as I have a Washer and dryer at home? Is it a business that only applies for dense urban areas or is the business viable in more suburban areas as well?

Gaspare U. · Answer

Understood and good to know. TYVM

Steve Kim · Answer

@Jordan Berry @Tony Kim

If you’re looking to replace old machines, do a full laundromat rehab, or even considering converting a retail space into a laundromat, shoot me a message.

My father specializes in that area with over 15 years of experience working with laundromats and hotels/spas all over Southern/Central CA.

Anyone buying retail space with laundromats?

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