Laundromats for the newbie

[Leah Stuever]

So we have single family rentals. But are looking to branch out. Where we live there is one landromat. It has horrible reviews for not being clean and things not being fixed. And the owners of it, own the one in the next town over (small town living). 

We are talking about reaching out to see if they are looking to sell, or build our own. But taking that first step seems to be difficult to figure out. Form a corp? Reach out? 

It just seems like such a good time with a bunch of real estate being build. Apartments. Town is expanding. But it is a new area for us so we are stuck in analysis paralysis. 

Any suggestions on starting out/first steps?

[Dustin Lavender]

@Leah Stuever

Look into the coin laundry association website. They have great valuation metrics.

I own two laundromats and being a cash business, do not trust the current owners financial claims in my opinion. It is an extremely water dependent business, so an easy way to determine turns per day on an older mat, is to look at the water bill. The water company will actually print you the water usage amount and you can calculate usage from there, often times without the owners permission as it is just numbers.

Example:

10 washers at $2.5 that use 21 gallons per load

5 washers at $4.00 that use 18 gallons per load

So in this example:

67% of washers use 21 gallons

33% of washers use 18 gallons

Water department says avg 10,000 gallons per month

So:

67% = 6,700 gallons/21=319 loads x $2.5 = $798

33% = 3,300 gallons/18=183 loads x $4 = $733

According to coin laundry association dryer revenue is at least 50% of washers. (Mine is actually floating at a solid 75% of washer revenue) so dryers at 75% would be = 1,148

Making estimated monthly income in this scenario= $2,675

Obviously this method has flaws, such as if 50% of customers use the $4 washers, it may result in a higher or lower income, but it is a pretty easy method to quickly calculate an estimate of income, also the owner can’t claim more income than he has water usage, for example if all customers in this scenario used the $4 washers and he had a 100% dryer to washer income rate his nearly max income would be, $4,444 per month, so if he claims 6k you can check that water bill and be like “uh-uh”!