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Updated over 3 years ago on . Most recent reply

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Cordell Huebsch
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Help with financing a laundromat

Cordell Huebsch
Posted

Merry Christmas my friends. I am looking at a laundromat that is on a very valuable piece of property. First option would be to buy and hold it as is and use the proceeds from the laundromat to pay for the property. This option does not cash flow very much at all, but would be a strategy to build some appreciation for a later play. The second option is to basically demolish and move the laundromat to a more reasonable location and develop the lake frontage into it's final use, most likely a 8+ unit STR on water. Neither option presents a quick way to recoup the cash invested into the down payment. I'm wondering how long private or hard money lenders would usually finance such an endeavor? Is it unreasonable to find someone that would give 2 years to clean up the short term money?

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Charlie MacPherson
  • China, ME
4,015
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Charlie MacPherson
  • China, ME
Replied

@Cordell Huebsch Most laundromats do pretty well, but many operators don't report all of the cash.  Just check to see if that's the reason they don't look good on paper.  It might be a dog, but then again, it might be a goldmine.

Fun fact: The IRS has recently gone after laundromat owners by getting a subpoena for their water bills from the municipality.  Once they see the amount of water used, they calculate the number of loads run and the resulting income. 

You can guess the result. It all comes out in the wash.  (Sorry)

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