Wannavend3 Posted March 1, 2013 Share Posted March 1, 2013 Hey guys! I just came across a laundromat for sale. I called the guy who is trying to sale it and it appears that he is asking a little more than twice the high end of his gross profit for a year. The high end is about $2800 per month and he is asking about $70,000. Is this a reasonable price. I am fairly sure that with a few adjustments this opportunity could be turned into a money maker, but I was wondering if his selling price is reasonable or not. Thanks for your input. Link to comment Share on other sites More sharing options...
dogcow Posted March 2, 2013 Share Posted March 2, 2013 Hey guys! I just came across a laundromat for sale. I called the guy who is trying to sale it and it appears that he is asking a little more than twice the high end of his gross profit for a year. The high end is about $2800 per month and he is asking about $70,000. Is this a reasonable price. I am fairly sure that with a few adjustments this opportunity could be turned into a money maker, but I was wondering if his selling price is reasonable or not. Thanks for your input. sort of, the magic number is 2x gross revenue, not "the high end" ...gross revenue, its not something thats open to interpretation unless the guy is admitting he cheats taxes in which case RUN away. look at his tax returns and go with that as real gross revenue, because no one will ever intentionally pay more tax than they're supposed to. theres other ways to figure gross revenue based on utilities but most of those methods can be cheated by the owner trying to pump the #s up to make it look better. i spent a few years researching the biz sadly most laundries for sale are a bad deal, even ones that are an OK deal they are very very long term investment and not real "easy money" like u might think. now if you own the real estate, thats different, it changes the math quite a bit. but the fact is laundromats are kind of over saturated industry , if u find one where there isnt another laundry in a close radius it is either that very rare great deal, or the neighborhood cant support the laundry and thats why its for sale. the only people i have seen who make great money are people who go thru this place here in FL that builds laundries on spec, because they understand how to find the right locations for them. but they are very expensive because ur buying it brand new. kinda like buying a mcdonalds vs opening ur own hamburger stand Link to comment Share on other sites More sharing options...
ronsidney Posted March 2, 2013 Share Posted March 2, 2013 I think rentacenter type stores killed the laundry business.. There are very few laundromats in tn now because most people have their own machines.. The ones that are going good are making it because they have those giant machines for conforters etc..or they are near a high transient population(mexican farm workers etc) or apartments that dont have hookups. I have rentals and there are hookups in there, every time i get new tenant the rentacenter truck is not far behind! I never understood that, but its just a matter of a person's thought process,, some people could be making good money but will rent forever everything, leased car,rented furniture,rented house,"I voted for Obama"sticker on the car etc... I just never understood such things!! lol ron Link to comment Share on other sites More sharing options...
dogcow Posted March 2, 2013 Share Posted March 2, 2013 I think rentacenter type stores killed the laundry business.. There are very few laundromats in tn now because most people have their own machines.. The ones that are going good are making it because they have those giant machines for conforters etc..or they are near a high transient population(mexican farm workers etc) or apartments that dont have hookups. I have rentals and there are hookups in there, every time i get new tenant the rentacenter truck is not far behind! I never understood that, but its just a matter of a person's thought process,, some people could be making good money but will rent forever everything, leased car,rented furniture,rented house,"I voted for Obama"sticker on the car etc... I just never understood such things!! lol ron with craigs list i have no idea how anyone ever would buy or rent a new washer/dryer u can get a pick up for $20 from home depot and get a washer dryer for $100 off craig list other things i would never buy new because of craigslist, pool table,hot tub/spa, range oven and exercise equipment seems like people will almost give it away free if they have to move but yeah in this day and age i would not consider investing in ANY laundromat that uses top load washers ur laundry needs to be 100% big front loaders because that is what people come to the mat for either doing comforters or minority families that have like 6 or 7 people doing the wash all at once, they need the big double , triple loaders...any mat with top load washers has one foot in the grave and i would factor replacing those with frontload in to my biz plan Link to comment Share on other sites More sharing options...
Wannavend3 Posted March 3, 2013 Author Share Posted March 3, 2013 Hey Guys!! Thanks for your input. It was much appreciated. I think that one of the biggest problems with this location is that it was allowed to run down, but I cannot be certain without looking at the numbers. The guy trying to sell it, bought it a couple of years ago from the original owners. At least that is what he told me. The asking price, I think is his attempt at getting back some of the money he pumped into it. Again, until I actually see his numbers I cannot be sure. Anyway, thanks again for your input. Link to comment Share on other sites More sharing options...
dogcow Posted March 3, 2013 Share Posted March 3, 2013 If he's selling after a few yrs id say major red flag also u need to see the lease and find out about upcoming rent hikes Link to comment Share on other sites More sharing options...
indiana Posted March 3, 2013 Share Posted March 3, 2013 If he's selling after a few yrs id say major red flag also u need to see the lease and find out about upcoming rent hikes This is very good advice. Look very closely at the lease, especially if you're in a strip mall. I owned a laundromat (probably 15 years ago) and spent a lot of time and money going over several years worth of financials, equipment being sold "as is," utilities, and everything else I could think of. I also hired a business attorney to review the lease, contracts, bill of sale and whatnot. Long story short, I purchased the laundromat and managed to turn a profit through the first year. Things were great. After the first year, my "options" to renew the lease in the strip mall expired. Despite being assured from the landlord and seller that lease terms were flexible and reasonable before purchasing the business, after the options expired, the landlord raised the rent by 50%. When I tried to negotiate, I was told there wasn't any room for negotiation, because "what are you going to do, pack up and move? You can't move the plumbing..." I was devastated, and was no longer able to generate a profit. I closed the business shortly after. So, make sure you have a well-negotiated lease with plenty of "options" to renew. Or, better yet, own the building altogether. Link to comment Share on other sites More sharing options...
Wannavend3 Posted March 4, 2013 Author Share Posted March 4, 2013 Actually, one thing I did fail to mention is that he said the building sold with business, which makes the asking price make more sense. However, I wouldn't make any final decisions on anything until I had a chance to look at all his records and verify that the building sold with the business. Again, thanks for the added input. Link to comment Share on other sites More sharing options...
dogcow Posted March 4, 2013 Share Posted March 4, 2013 if u own the property it might be a good deal since ur land cost is fixed, check over @coinwash.com and planetlaundry.com they can help with the ins and outs of laundromat biz Link to comment Share on other sites More sharing options...
Wannavend3 Posted March 4, 2013 Author Share Posted March 4, 2013 Thanks, dogcow. I'll check on that. Link to comment Share on other sites More sharing options...
shepherdsflock Posted March 4, 2013 Share Posted March 4, 2013 I managed a laundromat part time while I was in college about ten years ago. At the time, one big problem for my friend (the owner of the laundromat) was that several nearby apartment buildings remodeled shortly after he opened his laundromat (there was something of an apartment war going on). The remodeling included either washers and dryers in the apartment units, or on-site laundry facilities. It killed him. If you're thinking about getting into the laundry business, try to get a feel for where apartment development is going in your area. If all the building owners are competing heavily and upgrading facilities, they might put you out of business. If apartment development is on the decline and building owners aren't investing in upgrades, you might have a good market. Link to comment Share on other sites More sharing options...
Wannavend3 Posted March 4, 2013 Author Share Posted March 4, 2013 Thanks for the tip, shepherdsflock. Link to comment Share on other sites More sharing options...
novar2000 Posted July 31, 2013 Share Posted July 31, 2013 If you're still interested in the laundromat, they can be good investments, but take a lot more time than you would think. I own a small one & got most of my info from coinwash.com and a really informative book (can't think of the name right now, but will find it if anyone needs it). There are so many factors to look at with a laundry purchase, population, # of renters, # of lower income families, large families, convenient location, etc. Then, your equipment mix will vary depending on the local population......lots to investigate. Link to comment Share on other sites More sharing options...
mission vending Posted July 31, 2013 Share Posted July 31, 2013 If you're still interested in the laundromat, they can be good investments, but take a lot more time than you would think. I own a small one & got most of my info from coinwash.com and a really informative book (can't think of the name right now, but will find it if anyone needs it). There are so many factors to look at with a laundry purchase, population, # of renters, # of lower income families, large families, convenient location, etc. Then, your equipment mix will vary depending on the local population......lots to investigate. I'm not interested but it would be great if you could post the title and author of the book so that anyone stopping by in the future can get some good info. Thanks Link to comment Share on other sites More sharing options...
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