Hello, and thank you for the honest content you are putting out on laundromats. If it's okay, I have some questions for you (sorry for being long winded). 1. In one of your previous videos you mentioned that you brought in ~$80k in net (SDE) cash last year, which seems to be very good as a percentage of the acquisition price. I have looked for laundromats up here in the Portland area (rarely come on the market), and the advertised return on investment is typically 15-20% ($22-$30k net annual on an acquisition price of $150k). The ones I see in the suburbs are smaller, and unattended. The owners typically say they work about 5 hours a week, mainly to collect money and deal with maintenance. I see you have the drop off and full services. My question is did you add this service after you bought it, or was this happening with the previous owner? In your opinion does the add-on of these services grow profits enough to warrant the additional staff? 2. When you bought your laundromat, how long was the lease? I have been told it's good to have at least 10 years remaining on the lease to put off the risk of a massive spike in lease rates. 3. Would you do it all over again? Would you consider buying another laundromat considering the success you have seen with this one? 4. Was it difficult to ascertain the condition of the washers and dryers during the due diligence stage? As you stated, these washers are very expensive if a few go down at once and need to be replaced. I am a long way off from retiring (15+ years), but I am looking for businesses like this, that can be worked part-time while I still work a full job, with the idea I can expand services when I decide to slow down towards retirement. Thanks again!
I created a video answering question 1 that I plan to post at least by next week, and question 2 I just answered in response to another comment on this thread. Question 3 I think I will answer more fully in another video, but the short answer is yes, absolutely would do it over again! Question 4 - yes it was difficult as I didn't know anything about machines. If I were to buy another laundromat I'd contract my tech to do a run down of the place. If you don't already have someone you trust that could be tricky, but how I found my guy was through Craigslist. I posted asking for someone who knew laundromat equipment and I found a guy who's owned a laundromat for 20 years and charges a super reasonable rate. I hope that's helpful and thank you for asking those questions! Let me know if you have any more.
Love your content. Im looking to purchase a laundromat what do you recommend in terms of the lease? I read somewhere to not buy a business that has a lease less than 10 years available on it. I would be afraid to purchase and then find out that the rents will be too high where it makes sense to stay
Thank you so much! If you are buying a business using SBA then a 10 year lease will be especially important as most SBA loans for business acquisition without real estate are 10 years and lenders generally want to see a lease that will last as long. However, if there are options to renew that total to 10 years then that can work too. When I bought my laundromat there were about 6 years left on the lease with 2 5 year renewal options and that worked for me. I think if you limit yourself to only looking at businesses with 10 years left on the lease you may limit your options too much. However, there can be risk, as you mentioned, with a short lease. You could always try to use that to your advantage as part of the negotiation. Depending on how competitive the buying process is, you could make the purchase contingent upon signing a new lease.
Keira, you are doing a great job with these videos. Probably the most realistic laundry content on here.
Hello, and thank you for the honest content you are putting out on laundromats. If it's okay, I have some questions for you (sorry for being long winded).
1. In one of your previous videos you mentioned that you brought in ~$80k in net (SDE) cash last year, which seems to be very good as a percentage of the acquisition price. I have looked for laundromats up here in the Portland area (rarely come on the market), and the advertised return on investment is typically 15-20% ($22-$30k net annual on an acquisition price of $150k). The ones I see in the suburbs are smaller, and unattended. The owners typically say they work about 5 hours a week, mainly to collect money and deal with maintenance. I see you have the drop off and full services. My question is did you add this service after you bought it, or was this happening with the previous owner? In your opinion does the add-on of these services grow profits enough to warrant the additional staff?
2. When you bought your laundromat, how long was the lease? I have been told it's good to have at least 10 years remaining on the lease to put off the risk of a massive spike in lease rates.
3. Would you do it all over again? Would you consider buying another laundromat considering the success you have seen with this one?
4. Was it difficult to ascertain the condition of the washers and dryers during the due diligence stage? As you stated, these washers are very expensive if a few go down at once and need to be replaced.
I am a long way off from retiring (15+ years), but I am looking for businesses like this, that can be worked part-time while I still work a full job, with the idea I can expand services when I decide to slow down towards retirement.
Thanks again!
Thanks so much for the questions! These are great. I will be sure to answer them in a video within the next week!
I created a video answering question 1 that I plan to post at least by next week, and question 2 I just answered in response to another comment on this thread. Question 3 I think I will answer more fully in another video, but the short answer is yes, absolutely would do it over again! Question 4 - yes it was difficult as I didn't know anything about machines. If I were to buy another laundromat I'd contract my tech to do a run down of the place. If you don't already have someone you trust that could be tricky, but how I found my guy was through Craigslist. I posted asking for someone who knew laundromat equipment and I found a guy who's owned a laundromat for 20 years and charges a super reasonable rate.
I hope that's helpful and thank you for asking those questions! Let me know if you have any more.
@@Keira_Hamilton Thank you very much for taking the time to respond to my questions. It is very much appreciated!
Love your content. Im looking to purchase a laundromat what do you recommend in terms of the lease? I read somewhere to not buy a business that has a lease less than 10 years available on it. I would be afraid to purchase and then find out that the rents will be too high where it makes sense to stay
Thank you so much! If you are buying a business using SBA then a 10 year lease will be especially important as most SBA loans for business acquisition without real estate are 10 years and lenders generally want to see a lease that will last as long. However, if there are options to renew that total to 10 years then that can work too. When I bought my laundromat there were about 6 years left on the lease with 2 5 year renewal options and that worked for me. I think if you limit yourself to only looking at businesses with 10 years left on the lease you may limit your options too much. However, there can be risk, as you mentioned, with a short lease. You could always try to use that to your advantage as part of the negotiation. Depending on how competitive the buying process is, you could make the purchase contingent upon signing a new lease.