Laundromat Investors

by melissamoran92. Posted on Sep 13, 2020    0    12


Hi!

Found a laundromat... wohooo. Am highly considering it. Here’s the deal, I have some concerns but I think it could be a steal.

Asking 100k Gross rev 140k Net income 66k

Current owners: husband +wife. They don’t have any employees (husband and wife run it) and husband does all the repairs on the machines, so expenses do not count for that either.

Pros: in a neighborhood with lots of buildings Cons:
1) there’s about 5 laundromats less then 5 minutes alway. The one 1/2 a block away is 3 yrs old, way more modern and has more services- same day wash and fold, organic detergents, professional dry cleaning, good marketing of their WiFi, free soap Wednesday’s and I believe longer hours. 2) the place I’m interested In has barely any services outside of dry cleaning, that is done off premises by a third party that we would have to drop off. 3) cost of repair for machines is unknown

Here are my concerns 1) cost of machine repairs/maintenance unknown (this would by my first laundromat) 2) hiring new employees 3) marketing new services 4) Random, but I’d like to have the business in a nice flow by next September

Dryers are 7 years old , Washers 10 years old

Please share any helpful tips/ POV thanks!

Do you think this is a solid investment?


Comments

  melissamoran92 1

Thanks. Yea I definitely plan on getting in touch with other laundromat owners

calemedia 1

Repair cost are crazy with the industrial washers/dryers and they also are about $5000-$10,000 new so keep that in mind

  melissamoran92 1

Thanks! How often do you repair your machines? at what cost? Would you have those numbers to share?

calemedia 2

I don’t but a friend bought a laundry mat and it’s kinda a nightmare shits constantly breaking down people abuse the shit out of the machines

  melissamoran92 1

Aah ok thanks

orbit99za 2

So I was speaking to a owner of a landromat, he uses heavy duty domestic units, speed queens ect. They have 2 - 5 year warrantys, if they break he just gets a warranty claim. Been doing this for years and it's worked out well apparently. After the warranty is up, he sells them as used on ebay or something and recovers some cash to the new one.

  melissamoran92 1

Huh that’s very interesting. Would you mind if I followed up with you if i move forward?

thealphaomar 2

I am not very intelligent on this matter but I feel if you go about this the right way and find the right people to talk to, it’s gonna be an amazing return

Masterplan1000 2

I can foresee the cost of repair and the employees you plan to hire eating into the 66k of net income heavy. Plus of course the running cost of marketing, and the improvements you’ll need to make to stay in competition with the superior laundromat down the street.

Husband and wife already account for 2 employees, one of which who can do repairs, which would add up to more or less the 66k annually with employer contribution.

If it was 66k net, with two employees, and 100k for the setup I would say that’s an amazing deal that would pay itself off in less than 2 years, but unless your planning to take their job or create more value somehow by offering extra services than I would pass.

If you do want to go forward, run the numbers accounting for every little expense with an experienced accountant. Decide based on cold hard numbers.

  melissamoran92 1

Thanks! I appreciate your detailed response. The employees would be hired specifically to sustain the new services only. I would run the existing business full time. The maintenance cost are a bit unknown and so that’s what I am most concerned about.

Masterplan1000 2

You’re welcome🙃

Okay, that changes the situation a bit. You can try to ask the owner how often he fixes it, check how much each visit would cost from a technician and make a rough estimate.

I’m honestly unsure how often they break and the cost involved - it could be a deal breaker or completely manageable. You could try visiting a laundromat outside of your area and see if a owner could give you the picture or some deep online research.

I would run the numbers conservatively adding a high rate of repair, then your projections for new services and additional ongoing expenses to support them.

  melissamoran92 1

Thanks yea. I think that’s my next step, definitely.