All Forum Posts by: Ken Barrett

There are some coin boxes that are harder to drill. There are companies that make additional guards for the machines as well.

My Laundromats are all coin and I'm converting some machines to Quarter/$1 Coin/$1 Token.

I know a few Card Store owners that would never go back to coin. In the future I will probably add the card in addition to keeping the coin to cover all customer needs and provide better tracking of machine usage.

Another way to look at a Laundry Room:

Would I make more money renting it as a single or divided storage room?

If so, why are you bothering with the headaches of a Laundry Room?

Treat a Laundry Room like the profit center it should be.

Check your local Laundromats and see what they charge for the same size washer and dryer and then set your price at least 10% above that.

Why?

Convenience. 

Coffee brewed at home costs a few cents a cup but nobody bats an eye to drop $3 for the same cup at a drive thru.

Coke at a Convenience Store $1.20. Case of the same ones at WalMart $5. That's a lot to pay for them to cool it.

Treat the washer and dryers as "doors" and charge enough rent to cover investment, repairs, interest, utilities, profit.....See where we're going.

Worst Case: Nobody uses your washer and dryer. You have the initial investment, no expense and no income.

10% of Tenants Use Machines- They are available when they want them. You have reasonable wear (similar to your home machines), utilities are covered (less then 20% of vend price), repair/replacement factor covered, profit covered.

50% Tenant Usage- All of the above with more profit.

100% Tenant Usage- Gut one apartment and make it a Laundromat.

It's done all of the time.

There are a few brands that do this  that will work wirelessly between a dedicated router and each machine. This also allows the existing coin slots to be used so if the card reader or wireless has a problem you can still run. 

The card reader will keep track of the coins deposited so you know if the coin boxes are filling up.

Some brands link everything together and eliminate the coins altogether but it may be all or nothing if it fails.

How many machines do you have? 

Send me a message and I can connect you with someone local that can get you connected.

Ken

Sorry I missed that you already had the ProForma.

I have used Eastern Funding  or Firestone Financial for my Laundromats. I'm not sure if they do Real Estate or not but they may be able to connect you with another lender and confirm the Laundromat numbers. 
Another option, and my preferred, would be to set up the Laundromat as a separate business and lease the space from the building. 
This would allow an easy sale of the Coin Laundry business if you desire and reduce the exposure of the building in a lawsuit.

Laundromats typically have 10 year leases so that would provide a good base for the building lender. 

Is the Laundromat separate and accessible and used as a community Laundromat? Do you own all of the equipment or is it a Route Operation with the distributor owning the equipment and taking a percentage?

If it's a "stand alone" ask the distributor for the Demographics and ProForma. This will probably be required for any lender. 

I own 2 Laundromats and its my main income.

Yes I do most fo the repiars myself and I would never hire a full time maintenance tech unless I had a large (4,000-5,000 ft2 store or a number of stores.

Normal returns are 25% to 30%.

It's as passive as Real Estate but if you think of each washer and dryer as a door and your tenants can move in to the next one if theirs isnt working.

Maintenance can vary based on machines and age. 

Variations include un-attended, partially attended and fully attended. My stores are 24 hours. One is unattended and the other is partially attended (7am to 6pm, 7 days a week).

They are a cash business and sale prices are based on the reported earnings. An owner selling would have a choice of taking the cash weekly or getting it in the sale. 

One thing to be careful of when buying a store is that you may be buying the business but if the equipment is too old you won't have the cash for new machines.

Successful methods I have used are to lease a closed store and renovate with new equipment. Many are in great locations but the previous owner ran it into the ground and walked away.

Or get a good deal on an operating store, have the owner hold a note. This works if there is some good equiment to keep things rolling.

There are only a few reasons to sell cash flowing laundromats. Owner ill or moving, equipment is old and the owner doesnt want to re-invest or they have just grown tired of it.

Like getting a good deal on Real Estate the more you understand abot the seller the better you can negotiate.

I bought one off of a Korean lady that ran it 12 hours a day, 7 days a week. We met a couple of times, once I had my kids with me and the another time my wife as well. This personal connection madea big difference.

If you need more info send me an email and I'll send you the link to my site with all the details.

Jack hit the main points. I'm a Laundromat guy.

Is it a public laundromat or just one for the park? Are separate records kept? Number of washers and dryers? Vend prices?

Is there a competitor nearby that is bigger, better and cleaner ?

Thanks for the link to the website. I know a couple of route guys that may want to get on it. 

I own 2 of them. You bio says you are in LA. Is that still true or are you in Houston? 

First question: Why are they selling? (Moving, sick, elderly, equipment is old and they want to dump it on someone else, demographic changes). Run right they cash flow great and have an ROI of about 20% - 30%.

Second: Is the LLC being sold individually (if it was set up right to start with) or just the equipment at the location? Are the books available for the location specific with all costs or is it a part of all five so accounting, admin and other costs get mixed together.
Note: many laundromat owners just add more locations and run them under one LLC so it's hard to get the true numbers.

Third: Lease length and options. 

Fourth: Demographics and Competition: Have they changed? Did a new store open up down the street? Did another store just do a big remodel and take the customer base?

Fifth: Look at the detailed utility numbers for the past 2-3 years and compare with the last few months. You can't mess with water usage unless you have a big leak or leave a hose on. Power and gas will fluctuate but water tells the real story. Look at volume not charges.

Sixth: Will you have time to be there to audit the actual cash withdrawls from the machines over 2-3 weeks. Unless it's a card store where it's all tracked electronically.

More info available at the website LaundromatHowTo , Podcast on itunes with the same name or send me a message.

Ken