Laundromat opportunity question

1 Reply

Hi all,

My realtor/property manager in Houston has approached me with an interesting investment property. Someone she knows is looking to sell a laundromat. They currently own 5 total and looking to unload a couple. Im very interested in hearing from anyone thats had some experience with this type of investment. Im inquiring about more info regarding the deal and will update as i get it. Thank you!

I own 2 of them. You bio says you are in LA. Is that still true or are you in Houston? 

First question: Why are they selling? (Moving, sick, elderly, equipment is old and they want to dump it on someone else, demographic changes). Run right they cash flow great and have an ROI of about 20% - 30%.

Second: Is the LLC being sold individually (if it was set up right to start with) or just the equipment at the location? Are the books available for the location specific with all costs or is it a part of all five so accounting, admin and other costs get mixed together.
Note: many laundromat owners just add more locations and run them under one LLC so it's hard to get the true numbers.

Third: Lease length and options. 

Fourth: Demographics and Competition: Have they changed? Did a new store open up down the street? Did another store just do a big remodel and take the customer base?

Fifth: Look at the detailed utility numbers for the past 2-3 years and compare with the last few months. You can't mess with water usage unless you have a big leak or leave a hose on. Power and gas will fluctuate but water tells the real story. Look at volume not charges.

Sixth: Will you have time to be there to audit the actual cash withdrawls from the machines over 2-3 weeks. Unless it's a card store where it's all tracked electronically.

More info available at the website LaundromatHowTo , Podcast on itunes with the same name or send me a message.

Ken 

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