Has anyone ever purchase a property with a laundromat in it. If so how was your experience I'm looking into purchasing a property with a laundromat as a investment. Just wanted to know if anybody has done it before.
@Keanu Wapples did you ever end up purchasing that property? I'm looking at a similar opportunity.
@William Hollis what did you end up doing? I'm looking at opportunities and this is similar.
It doesn't look like this gained any ground but I'm commenting in case anything does come of it. Currently evaluating a commercial building purchase, which also would own the laundromat, and have two residential units and a commercial fitness studio. It's a messy evaluation, and curious if anything happens to pop up on this subject.
@Mitch Brunette I own a couple of laundromats and commercial property. I have a website /YouTube /podcast for laundromat owners and prospective owners, too. I'd be glad to answer any questions and /or send you the link to the site for that part of it if you'd like
@William Hollis I own a couple of laundromats and commercial property. Glad to answer any questions in those arenas.
@Rene Doyle glad to answer any questions regarding laundromats and commercial real estate. I own a couple
@Jordan Berry man you love to give value back, sir! I just hit play on your podcast, I can’t believe you put this in your intro! Thank you!
@Mitch Brunette Haha, I'll go give an answer on the forum in a bit, but I thought it was a great question that a lot of people could benefit from! Thanks for posting it! Hopefully we'll get some good advice for you over there!
In case anyone ever needs this for help, here's where I've ended up thus far and am still forging ahead. If you've never read a detailed P&L it can be a bit daunting, but at the end of the day a laundry and real estate P&L can be fairly simple. Here's what I've done thus far:
1. Saved two copies of the existing P&L. One for the Real Estate and one for the Laundry
2. I started making assumptions about where expenses and income belonged. If it belonged to the laundry I removed it from the real estate and vice versa.
3. I found some expenses that I had no idea or thought might be more laundry than real estate and just chose a percentage and assigned some of the expense to both but totaling the original amount.
4. Figured out the debt service costs over 20 years amortized at 4% interest.
5. I had the laundry pay $1400 in rent which is comparable to what the pilates studio is paying, similar square footage, different use, seemed like a reasonable starting point.
6. Came up with a final cash flow number for both the real estate and the laundry.
They both potentially stand on their own, and the total Cash on Cash Return after all expenses and debt service divided by down payment and some small up front expenses will range between 19%-22%. We think there may be wiggle room in the price and could grow that cash on cash return.
Next: Figure out if that is a good COC or not, age of equipment, if its over 10 years how soon we'll have to figure in replacement and that might zap the cash flow pretty quickly in planning to reinvest.