Coin Laundry Business - Is it passive income?

[Kera Covani]

I have recently sought interest in another possible income stream, the Coin Laudry business. I have found a couple in my area and am starting to analyze to determine if this would actually be a profitable and passive income business (after start up).

The current business I am looking at is one that is currently operating at about a 25K net profit. The owner is moving out of town. From what I have read, the best way to determine an offer price is the following formula net profit x 50/60 = offer price. (50 or 60 would be selected as the multiplier depending on the current state of the business and repairs needed.

The owner curtly has 2 PT emp. There is a folding service and also some nearby commercial accounts. There is definitely a value add component, such as vending machines, play are for kids and converting the coin machine to an electronic system as well as just some cosmetic updating to make the business more appealing. It is in a great neighborhood, well established area.

So, using this formula the offer price expected would be about 100K, which is the listing price. Although, after calculating the expenses, to included the loan amount, the profit would be 0, until the load is paid due. However, after that, one could expect about 2500/3000k /month profit.

Does anyone have a experience in this industry? Thoughts/comments/concerns??

Sincerely,

Kera Covani