@Noopur Bak I, myself am interested in this too down the road. I’ve looked into it a little bit but it seems like maybe you would need to find an experienced person to network with on how to value the properties you locate and potentially on how to run them long distance which is where card operations would be helpful because it would be so easy for a manager or employee to steal the cash long distance.
Perhaps you can look for a Facebook group on this. I’ve found several good ones on self storage and other subsets of property investing.
@Noopur Bak I, myself am interested in this too down the road. I’ve looked into it a little bit but it seems like maybe you would need to find an experienced person to network with on how to value the properties you locate and potentially on how to run them long distance which is where card operations would be helpful because it would be so easy for a manager or employee to steal the cash long distance.
Perhaps you can look for a Facebook group on this. I’ve found several good ones on self storage and other subsets of property investing.
Best of luck. I’ll be following this thread!
I have owned coin laundromats. This is a totally different investment than Real Estate as this is a living breathing business. The biggest issues we faced was equipment breakdown as customers routinely abuse the equipment the most common repair ws due to over stuffing the washers and using the washers to dye items. The next and this may have changed due to improvements but we had gas dryers and the ignitor glow bars would fry due to particles and lint attaching to the bar. Really easy fix if you have someone around to change it. The other important item is if you have anything that is cash driven. If cards are available to purchase for cash then the cash must be pulled from machine regularly. I did make great cash flow from mine but i did get regular calls about machines broken down on weekends. In a nut shell you need at lesst 1 person you can trust and a hood repair and maintenance process
San Francisco, CA · Member since 2017 · 11 posts · 1 vote
5y
Hi Alecia,
That’s exactly what I was looking for in this community. Someone who has done this successfully who can provide some pointers on how to get started and major pitfalls.
I see several laundromats in driving distance of where I live up for sale. The goal would be to start with something that I can supervise in person on a regular basis.
If anyone has any recommended reading around this that would be great too.
Chicago, IL · Member since 2013 · 49 posts · 12 votes
5y
Hey Noopur,
I own 2 laundries and building a third in the Bay Area.
You can checkout PWS in South City , they sometimes offer investor seminars.
just be cautious . I bet there’s only about a 10% success rate . Probably 75% of laundromats on bizben or anything listed I wouldn’t take for free. Everything listed has been passed on my dozens of laundromat owners . There’s always some diamonds if you look long enough . always ask yourself why are the other laundromat operators passing. Most own a couple stores . The most logical buyer is a competing store.
San Francisco is tough. More opportunity in East bay or Central Valley . Salinas/Gilroy is also a strong market.
San Francisco, CA · Member since 2017 · 11 posts · 1 vote
5y
Thanks Adam. That’s great insight. That is my biggest concern. The deals seem too good to be true..so what am I missing?
Question: how do you get an inside track on such sales..you know like in traditional real estate if you have the right contacts you know of properties off market before they are listed..how does it work for laundromats? Since you are invested in the Bay Area - how did you scout for the right deals? Especially since it seems you are based in Chicago?
And you said you are building a third one - as in from scratch? Like finding a location, buying equipment etc…
Chicago, IL · Member since 2013 · 49 posts · 12 votes
5y
Laundromats are probably the most difficult business for a newbie to enter .
In the business, pretty much everyone you deal with also owns store themselves
Laundromat brokers own them, salesmen for the machines own them, installers own stores and most repairmen own stores or want to . These people plus store owners get the first crack at any store . I get a couple letters a month from people looking to buy stores
easiest way is buy a strip mall with a laundromat with a short lease. Don’t renew and just take the store yourself
San Francisco, CA · Member since 2017 · 11 posts · 1 vote
5y
Thanks for all the great advice, folks! Much appreciated. @terrell - good point! I definitely don’t need a job I have a full time one already but was looking at options to diversify and expand. I have a few long term rentals I bought years ago but then life happened and I didn’t dig more into it.
With the housing market currently going through the roof, I want to explore alternate investments.
Investor · Butler, PA · Member since 2014 · 130 posts · 114 votes
5y
Be cautious. Laundromats don't require much time to operate so if one is for sale there may be a reason. Be sure to investigate thoroughly. Id recommend learning how to do basic repairs or the costs of having a repair man come out for every little thing will eat your profit.
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
5y
I own a decent chunk of laundry machines. Card is the way to go. With the coin operated machines you're constantly dealing with people breaking the machines and stealing the coins.
@Noopur Bak Hi Noopur. I own a couple of laundromats and host the Laundromat Resource Podcast (often described as the Bigger Pockets Podcast of laundromats haha). We have a ton of useful information, resources and tools, including a free live weekly webinar (this week is How to Buy Your First Laundromat).
I’m glad to answer any questions, as well.
Hi, Jordan,
This town is divided by a river and river crossings are five+ miles apart. There is no laundromat south of the river despite having many rental units in the area which likely do not have in-unit laundry.
There is a business space of some 2700 sq ft for sale at the river and the state route through town. It's listed on Loopnet, but no asking price is given. The 2020 property taxes are $7300. The taxes are current, per the County. It's owned by a local senior's personal trust and is FSBO (signs in the window).
How has your experience been with start-ups and build-outs?
I'll be getting with Dexter (Commercial laundry equipment mfr.) to explore acquisition / installation. I'd have to check with the city about available water supplies and with the gas and electric utilities.
I've never "bootstrapped" a business like this, so I'm looking for all the input I can get. Will BP let you post a link to your resources? If not, can you PM me?
Real Estate Agent · Fullerton, CA · Member since 2016 · 140 posts · 103 votes
5y
@David Dachtera
Hi David, here are a couple of quick things based on what you shared.
1. Major dividers like rivers, highways, etc do tend to divide up customers naturally, so that’s good. You’ll want to run a demographics report focusing solely on south of the river to see how many people are there, percentage of renters to buyers, median household income, and average number of people per household to make sure the area will be able to support that laundromat.
2. The distributor should be a great resource for you. I always recommend talking with a couple of them to make sure you have a good one and they’re giving you a fair quote.
3. Make sure you do some research on impact fees in your area (a fee to get permission to connect to the water/sewer). The fees can vary widely (I had a 3,200 square foot store here in So Cal that was going to be $390,000 in impact fees alone) and sometimes there aren’t any, but you definitely want to know what they are early in the process.
4. Plenty of people have great success building out their first store (the most recent podcast guest for example). You do need a solid plan for attracting and retaining customers, however. With a build out you’re in the business of customer habit interruption and retraining do have a plan on how to do that.
Baltimore, MD · Member since 2018 · 432 posts · 281 votes
5y
Coinwash.com has the biggest laundromat forum. From what I've read (no experience), it boils down to three things:
1. Location. Do you have people who will use it?
2. Maintenance. Can you learn the basic repairs yourself?
3. Additional revenue streams. A lot of people are making an additional $150-300/month on 1 to 5 other things, from vending machines to arcade games. Arcade games aren't cool enough to get teens hanging around anymore, but they do draw money of people who are bored and hanging out.
Real Estate Agent · Fullerton, CA · Member since 2016 · 140 posts · 103 votes
5y
@Genny Li I agree that location is important but would argue that if you’re spending that much on repairs it’s probably time to buy new machines. Also, an extra $300/month is not going to move the needle for a laundromat that’s bringing in $15,000-$20,000/month. It’s nice to have it, but definitely not one of the main factors of success.
@Genny Li I agree that location is important but would argue that if you’re spending that much on repairs it’s probably time to buy new machines. Also, an extra $300/month is not going to move the needle for a laundromat that’s bringing in $15,000-$20,000/month. It’s nice to have it, but definitely not one of the main factors of success.
Point taken.
To be clear, I meant $150-500 a month for each category. :) If you have a per-visit-expense edge over others, then you can do things that attract more customers and then make more overall (in areas with competition). If you have Johnny Jr nagging mom to go to the Tekken laundromat, then you can boost both the per-visit and the total number of visits numbers. In areas with no competition, you only get the per visit benefit, but those areas often have really low grosses, so it matters more.
Some people are concerned about the service charges directly and some are more concerned about the amount of time their machines are down and their priority level for the tech.
It all probably depends a lot on the scale of laundromat that you have, where you are, what rents are, what water rates are.... I've been fascinated by laundromats for some time, but there's such a wild variability in both the gross and net that it's hard to generalize. Those were just the three things that kept coming up time and time again in the forums.
Lots of people swear by the cards and their loyalty programs, but others want people to have the coins to feed into their other money makers.
Other people go a totally different direction and add wash and fold and more intensive services to boost income. That market is pretty much locked up by the dry cleaners everywhere I've lived, so I find it curious.
I've only ever used a laundromat a couple of times in my life, so I guess it is a kind of foreign fascination with them that I have!