Negotiating 3rd Party Laundry Vendor for Multifamily?

23 Replies

I'm looking for a 3rd party laundry vendor or laundry broker to negotiate some new laundry equipment for a couple assets in Indianapolis and Cincinnati.  If anyone has any good suggestions, or deals you've been able to negotiate, please let me know.  I'm looking to sign a 5 year deal at 60/40 split or greater for new machines, with hands off repair and maintenance.  Thanks in advance! 

The property I acquired in Indianapolis last January was using Jetz. They seem to be doing fine, but I’ve only had it for a year. 

I’ve got another property that I’m considering moving to a vendor. I’ve gotten quotes from Jetz and CSC. Both look to be very comparable. 

Not sure if either or both of these companies do business in Cincinnati?

I actually just toured a property in Cincinnati today that has managed laundry services. I didn't catch the name of the service but I'll ask the owner. This situation is a 50/50 split in return for the lease and no maintenance.

Can I ask how many units you are managing with the service? I have 3 buildings in close proximity but it is only 12 units. I'd love to transition out of managing the coin machines I have.

@Kris Wong What kind of rate do you get if you don't mind sharing? They offered me a full service rate 25/50/75 percent for each additional 1 load/day. This is a 3 unit. I've been trying to figure out if this is pretty standard. The prior agreement was straight 50% split. Seven year deal which I don't love but have heard they aren't that difficult to get out of.

@Phil Denton

The larger laundry vendor in Cincinnati is called “Cincinnati Coin Laundry”. I’ve inquired with them but they want to give me refurbished machines and a 50/50 split for a 5 year agreement. I was hoping to do better. I know individuals who were able to negotiate 70/30 splits for new modern credit card machines (164 units in Phoenix) and 60/40 split plus a signing bonus for (8 units in Orange County).

There are vendors that negotiate with companies, but across larger portfolios. My advice would be to call other management companies and ask what they use. 

@Rich Somers I am in Pleasant Ridge so we are close. 

I'm pulling in ~$100/year per unit in revenue on my laundry. Factoring in that I had to replace a dryer $900+ this year and I'm sure I've got some other machines that will have to go soon I'm thinking a 50/50 split is a decent deal. Then I can quit messing with quarters and the worry/hassle of needing to maintain anything. 

I'm guessing the 70/30 splits are bigger complexes that get a much better economy of scale.

@Justin Wilkey

Justin, I found a national company who is local to Cincinnati and (i believe) would be willing to do 60/40 with brand new machines if I can structure another investor and property into the deal. How soon are you from being ready for 3rd party? They will also haul away your old machines.

I'll be out in Cinci in March to walk a few properties and meet up with a few brokers.  I hope to connect with @John Lenhart while I'm out there with my partners and @Michael Ealy .  I need to reach out to those great gentlemen again.

Originally posted by @Lamont Marable :

I'll be out in Cinci in March to walk a few properties and meet up with a few brokers.  I hope to connect with @John Lenhart while I'm out there with my partners and @Michael Ealy.  I need to reach out to those great gentlemen again.

 Sounds good man. Email my assistant and he can put you on my calendar.

@Rich Somers a lot of us go back and forth in Cincy about whether or not to manage our coin laundry ourselves or hand it off to a third party vendor. I know of a couple places in town that will sell you used coin op machines that you manage yourself, and they'll also repair those machines (for a fee) when needed. My understanding is that Cincy Coin offers this as an alternative to having them manage the machines.

General question for everyone here, since this is an interesting topic. What's the main reason you have opted to outsource your laundry services? Convenience? Cost? I've read stories of mixed success with laundry vendors here on BP, but I guess it could be a safer bet with local companies.

Would you manage your shared laundries in house given the option? What's stopping you?

I also use Cincinnati coin laundry for a couple of my quads. The split isnt the best but laundry is not about making money it's about providing an amenity to the tenants to make the building more attractive. I've been happy with them overall.

Originally posted by @Mal Vin :

General question for everyone here, since this is an interesting topic. What's the main reason you have opted to outsource your laundry services? Convenience? Cost? I've read stories of mixed success with laundry vendors here on BP, but I guess it could be a safer bet with local companies.

Would you manage your shared laundries in house given the option? What's stopping you?

My and my partners' time is worth way more than what we would save by going to the properties, picking up the change, and taking it to the bank, as well as having the machines serviced any time there's an issue. My property manager's time is also worth more than this, and so it's a net loss to pay them for this service instead of CCL. You guys are talking about saving a few dollars a month when it comes to a 2 - 4 unit property. Find your abundance mindset.