Laundromat in Wyoming

[Christina Linn]

Investment Info:

commercial investment investment.

Purchase price: $180,000
Cash invested: $110,000

This investment has tons of potential and started making us money on day 1. It's an old outdated laundromat turned new, comfy and cozy laundromat.

What made you interested in investing in this type of deal?

I was interested in freedom and this seemed to have some answers towards that goal. I hated the idea that it was in Wyoming, because I didn't want to live there again, but I realized I could easily manage a laundromat with my one-year old in tow. The huge office helped, because my husband wants to work on his own software and that is an excellent place to do it; it means we could easily be on-site while accomplishing other things as well. The 4-plex across the street made it more interesting.

How did you find this deal and how did you negotiate it?

Like most of our investments, it just so happened that we found it accidentally. We were not looking for a laundromat, but it was interesting. One of the things I love the most about us is that we are open-minded and that is what allowed us to explore and ultimately go through with this deal.

How did you finance this deal?

We needed to tap into equity for this deal, so we refinanced all our SFH and financed the laundromat in a portfolio loan. It was the most exhausting loan I have closed to date. We are thorough and very particular about our numbers, so it was surprising that the bank wanted even more than I did on this deal. We got it done on a loan at 5.15% with a 5/5 ARM on a 25 year amm and 10 year balloon. On this deal I got to call some shots on terms (5/5 instead of 5/1 ARM and lower int than quoted).

How did you add value to the deal?

We mostly gutted the laundromat. We bought brand new washer extractors, took out the horrible floor (we painted it), added a play area, and carpet/paint to office. We are still working on the laundromat every chance we get, as it's not even close to done; however, customers are in love! We bought recliners, table and chairs, offer high-speed wifi, and carpeted a play area for kids. It's a hit! The washers are the most amazing part to me, but customers love the atmosphere.

What was the outcome?

I guess I already answered that. Our customers can wash AND dry their clothes in under an hour or less than the competition; they can lounge in the recliners or work on their laptop with our wifi; their children can play with toys instead of ask when they get to leave every 3 minutes. The outcome is relaxed customers who are thankful that we listened to their suggestions from the survey we put out before we closed on the laundromat.

Lessons learned? Challenges?

Sometimes even conservative numbers can be low. We don't cash flow as much as our very conservative numbers said we would, but we also only have a total of 12 washers (4-4 load washer extractors, 2-6 load washer extractors, 4-4 load washers and 2-1 load top-load washers). It is an excellent investment and we hope to grow in the coming years. Everything was a challenge with this deal, from the asbestos tiles to the toddler who got into everything I was trying to clean/fix.