Jordan Berry [00:00:00]:
This is part 1 of a free 3-part course that’s going to show you everything you need to know to buy your first laundromat this year. This video, I’m going to show you exactly how our team finds laundromat deals for our clients so you can do it yourself. Finding a laundromat in today’s market can be very difficult, but I’m going to show you how to do it. And over the next 2 videos, I’ll show you exactly how to value those laundromats and every step of proper due diligence so you know what you’re buying before it becomes yours. Here’s the first big mistake most buyers make. They only look in one place for deals. That’s probably biz buy sell. You’ve probably done it.

Jordan Berry [00:00:39]:
I did it too. We don’t only look at one place. We find laundromat deals in 3 big buckets. We have a 6-step process that we go through. Bucket number 1 is public markets. This is looking on major buyer platforms, broker websites, and even AI searches. Bucket number 2 is broker professional networks. These deals come from relationships that we develop with brokers, distributors, service technicians, other industry insiders, where those deals often show up early and they show up quietly.

Jordan Berry [00:01:11]:
And bucket number 3, off-market deals. We have direct contact with owners landlords, vendors, and other internal signals that show us that a store might be ready for sale before anybody else knows about it. So if you want help organizing all 3 of these deal sources in one place, we built a custom platform for ourselves, decided to allow you to use it. It’s called LaundromatDFY, stands for done for you, but now it can be DIY. But check out laundromatdfy.com and sign up for a free account. It’s free. It’s a platform where you can help you find that deal much, much faster. Now listen, this is only the framework, but you’ve got enough to go get started if you want to right now.

Jordan Berry [00:01:56]:
Use those 3 buckets, go to laundromatdfy and utilize that, and you can get after it. But if you want more details, want to see our full 6-step process, stick with us. I’m going to bounce back to the studio here in a second and break it all down for you step by step. If you end up heading out to take some action right now, do me a favor before you go, drop a like, uh, cuz listen, you would’ve earned it getting after it after that. But if you’re gonna stick around, grab a notepad and let’s jump into it right back in the studio. Okay, let’s jump into the meat of this framework. Let me break it down step by step. We’ve got our 3 big buckets, our 3 primary channels that we utilize, uh, to find these laundromat deals, and then we break it down into 6 steps.

Jordan Berry [00:02:42]:
So I’m going to go through all of those for you. So get ready to take some notes if you’re out there and you’re serious about buying your first laundromat. That’s the big picture. Let’s zoom it in so you know exactly what you should be doing and how you can actually do this. So first of all, let me just introduce you to the laundromat deal finder platform that we’ve created here. This is, we call it Laundromat Done For You or laundromatdfy.com. You can get a link to that if you’re on YouTube, down in the description. If you’re on the podcast, those will be in the show notes, but the Laundromat Deal Finder platform.

Jordan Berry [00:03:19]:
So you just come to this, it’s free. This is a custom platform that we built to be able to work with our clients and feed them deals and move quickly on deals that are good deals. But we decided, hey, let’s create a DIY part of this platform so that you guys can utilize the same tools that we’re utilizing when we find deals for our clients. So go over there, you just click sign up, sign up. It’s real easy. You just create a, a account with your email, a password, and I think that might be it. So just do that and then you can sign in. And this is what it’ll look like once you sign in.

Jordan Berry [00:03:57]:
Again, this is 100% customized, built for us to— for this specific purpose, and we’re giving it to you for free. So check that out here. Again, it’s laundromatdfy.com, done for you, dfy.com. This is what it’ll look like when you log in and you start getting going. Okay, just Real quick, as a quick overview, you’ve got your dashboard right here. This is where you can hit all the highlights of everything you need to see about a particular deal. So any deals that you’ve uploaded into your platform, you’ll be able to see right here. And this also does have a broker CRM.

Jordan Berry [00:04:36]:
You’ll see how that’ll play in as we get going. But any brokers that you’ve connected with and added into the, the system here, the CRM here, you’ll be able to see that. And then also one of the things that’s important for us is that we know that, listen, it’s not easy to find deals these days. So we know that we need to take action. The more action and activity that we can have, the better the chance that we will be able to find a deal for our clients. And so we’ve created into this platform a way to track the activities that we’re taking, both so that we know we’re doing all the right things. We can keep track of the activity activities that we have taken and what we need to take, and so our clients can see the activities that we’re taking on their behalf. Okay, so there’s some quick actions you can do right here off of the platform.

Jordan Berry [00:05:26]:
You can add a deal here, add a broker, log an activity. You can view the deals you’ve already added. Again, you can assign tasks to yourself, to yourself, and date those. That way they stay tracked in the system. And then analytics about where you’re at in the process. Okay, so real quick, I’ll just take you through. Again, not going to go crazy deep into here. You can come play with it.

Jordan Berry [00:05:50]:
Again, laundromatdfy.com. But let’s just, uh, you know, let’s add a pretend deal here. So all you gotta do is come add a deal. Uh, listen, I’m in Los Angeles, so we’ll just say I’m in the Los Angeles market, and the store is, uh, Jordan Soapy Tub. How about that? Okay, and we’ll say this is on Crenshaw You put the whole address in here if you want. If you’re— if you found this deal through a broker, you can actually assign a broker to the deal. That way you know who to, you know, keep track of. You’re in California, I do broker some deals here, so throw my name and info in here and you can, uh, you know, keep track of me as well.

Jordan Berry [00:06:32]:
Uh, asking price, you know, let’s just say it’s, you know, $400,000. And gross revenues doing, I don’t know, let’s call it $300,000. Net income, we’ll say making $80,000 and the rent, I don’t know, we’ll just call it $3,000. Size, let’s just say $2,500. Okay, then status, you can keep track of where it’s at in the process, right? Open. If you get it under contract, you put it here. Closed. If somebody else swoops in and buys it out from under you, you can mark it as lost.

Jordan Berry [00:07:04]:
That way you don’t have to do anything. And then any notes you can put in here, right there. And then you just go to add deal. Here. All right, so now we’ve got Jordan Soapy Tub right here with all the relevant information. You can view the sheet here. Okay, and also you can export this to PDF if you ever need to pull it out of the system or you want to keep your own file or anything like that. Again, it’ll all save in here, but if you wanted a PDF, you could do that here.

Jordan Berry [00:07:30]:
So you got all your highlights here, the notes that you’ve included, and then if you want to log in activity— so let’s just say you know, you called me because you wanted this deal, and then you can say what happened on the call. There you go. Didn’t— he didn’t pick up, uh, he’s a deadbeat, right? Or whatever you want to put in here. And they give you some recommendations and stuff, and then it allows you— this is awesome— it allows you to schedule a follow-up. So listen, I’ll just, you know, keep the default date and time, and then we just say log activity here. Okay, it— all right, I got an error. We’ll make sure we get that bug fixed before this comes out, but that’s how you would log in activity. Uh, right here you can see that, no problem.

Jordan Berry [00:08:12]:
Okay, and that will show up in your activity log once it’s all, you know, once it’s all smoothed out. Um, and again, you sign up for this and you find little bugs in here, I’d consider this beta, but, uh, we’re just now launching it for the, you know, do-it-yourselfers out there. So utilize this. And I will say too that our, um, our done— we have done-for-you clients where we go out and do all this for you. We find the deals and we assign them to you and you tell us, hey, we like it or we don’t like it. We also have with you clients, and they’re already beginning to utilize this platform as well. It’s been super effective. Okay, so that’s deals here.

Jordan Berry [00:08:49]:
Our broker CRM, also awesome. So as you’re searching around for a laundromat or you’re calling brokers, you can keep track of those brokers here. Again, very similar, very simple. You can just input the broker information here and their phone number, their email, their website, all that. You can leave notes about them that you want to keep track of here, and then you just click Add Broker. This is what it’ll look like here. You can view broker information. And again, the beauty of this is that now we can keep track of when we’re calling the brokers and when we need to call them again.

Jordan Berry [00:09:29]:
And I should just point out real quick that with the platform, you will get notifications here to remind you to do the things that you’re supposed to do. And you’ll also get email reminders. Uh, when those tasks come up. Okay, same with the tasks. You can add these tasks, uh, here. You just add a task, you know, what, what needs to be done. Hey, I need to call Jordan, he didn’t pick up, he’s a deadbeat. Uh, you know, you can remind yourself what you need to do here, and you can assign it a priority level and a date, and then click Add Task.

Jordan Berry [00:10:02]:
That’ll all show up right here for you so you can keep track. Again, Finding a deal in this market today is, is easier said than done. This is the process. I’m going to take you through the whole process that we go through to find deals for clients, and it’s a lot, but this is going to give you the best chance to get this done. Okay, so you can also see your activity log and the analytics here as you go through that, but We are not going to go through all that, uh, here. Okay, so now what I want to do is I want to take you through step by step exactly what it is that we do to help you find a laundromat deal. Okay, we’ve got our 3 big buckets. Now let me break them down for you.

Jordan Berry [00:10:50]:
All right, so let’s start with bucket number 1, is our public market search. What exactly do we do when we do our public market search? Well, it’s— we do a lot of what most of you have probably done already, is we’re searching the platforms online to look for what deals are available. When we find those deals, we add them into our platform, we assign them to a client. You won’t have to do that because you are your own client if you’re doing the DIY. We assign them to our client, and our client says yes or no on those deals, or, hey, we want to talk about it some more. So in order to find those deals, listen, we’re looking at all the major platforms. I’ll name off a few of them: BizBuy BizQuest, BizBin, all the biz websites. Some slightly less common websites that we utilize are Facebook Marketplace, Facebook groups, Craigslist, LoopNet is another one.

Jordan Berry [00:11:47]:
We just Google laundromat for sale in whatever city that you’re in. These brokers that we input into our CRM, we’re checking their sites. A lot of times they have businesses listed on their websites that maybe don’t get into some of the big ones. And then we’re utilizing AI as well to help us find deals. So that’s what we’re looking for. The cadence of what we’re looking for these things is about 3 times a week. We’re going through each market that we’re working with clients with 3 times a week and seeing if anything new pops up. You can also do things like, uh, add Google Alerts.

Jordan Berry [00:12:22]:
That’s a hot tip right there. Add Google Alerts for laundromat for sale in your city or your area or your state, wherever you’re looking., and that way Google will just feed you those if they come out. But I wouldn’t rely solely on that, but that can be a really great tip. We’ve talked about our public market search. The next bucket that we have is our broker and professional network that we tap into. I’ve kind of showed you in the laundromat DFY our broker CRM. So our objective when we onboard a client, the first thing we do is we make a list of all the— we actually have a list, but we narrow it down and get specific about all of the laundromats that are in the area in general. Then what we do is we look for all of the deals that are on any of— anywhere on the internet that are for sale, just like we talked about before.

Jordan Berry [00:13:15]:
So we want to know all the laundromats in the area, then we want to know specifically which ones are currently for sale. And again, we do that about 3 times a week where we’re, we’re re-analyzing those deals. And then What we do is we create a master list of all the brokers that we can find in the area. So that’s laundromat-specific brokers, that’s small business brokers. If our clients are open to or interested in buying real estate, we’re looking at commercial real estate brokers as well. We’re making a full list of them and putting them into the CRM. And let me tell you what we’re doing with those. So we’re going to add them all from public listings.

Jordan Berry [00:13:52]:
We’re going to check, you know, all the sites. If anybody is listing a laundromat in the area, they’re automatically going into the CRM. Even if the laundromat that they’re listing is not one that we’re interested in. That’s one way to get them. Another thing that we do to, to build this broker, you know, comprehensive broker list is we conduct Google sweeps. So we’re looking for laundromat brokers in your city, business brokers in your city, commercial real estate brokers in your city, and we’re just making a comprehensive list. And then we utilize AI as well to help us discover brokers, find brokers. And when we do find them, We’re putting as much information as we can find about them into that CRM.

Jordan Berry [00:14:32]:
So what bare minimum we’re looking for is their name, their phone number, their email address, and their brokerage website. That’s a bare minimum of what we’re looking for. And again, when they have deals for sale that may or may not fit our client’s buy box, we’re going to assign those deals to that broker so that way we can keep track of when we call those brokers, we can ask them about you know, the deals that they have. In terms of the cadence, so here’s where we get a little, uh, we listen, we get a little extreme here, but in terms of the, the, the cadence, our goal is to have 2 touches per week per broker. So we’ve got our whole list in the market, we’re trying to connect with those brokers 2 times a week. Some of what we do again is referring deals or referring somebody from our network to them to to help them out. We try to create tools specifically for them, uh, to help them out. Like for example, this course that they can say, hey, you know, go check this course out, you’re going to know exactly how to buy a laundromat.

Jordan Berry [00:15:36]:
And we’ll just say, hey, share this with any clients you have so you don’t have to answer all their pesky questions, we’ll do it for them, right? We’ll try to give them some insights on the industry, on the market, you know, every quarter or so, just to, you know, just to offer them something that’s useful for them. That’s what we’re doing with our brokers. We’re making sure they get in there. Then 2 times every week, we’re trying to make some sort of contact, whether that’s asking for deals or offering something to help them out. Bucket 3 is off-market deal generation. We’re on step 3 right now of our 6-step process of finding deals for clients. So our objective in this, uh, this bucket here, this category of what we’re doing, is to access opportunities unavailable to the general market. Again, I mentioned before, one of the first things we do is we build a list of all the laundromats in the area.

Jordan Berry [00:16:28]:
Here’s how we do it, is we collect all the zip codes within the buy radius for a client. So we’re, you know, if you’re in Dallas, we’re gonna look at all the zip codes. You know, if a client says, hey, I’m willing to drive 45 minutes, we’re going to look at all the zip codes within around a 45-minute to an hour radius, and we’re going to pull those laundromats and create a list specifically for that client. Now we have the advantage of we already have a list of all the laundromats in, uh, in America that are at least the ones that are listed online. And, uh, so we can create that list pretty quickly and easily. For you, if you’re in a market, it’s actually not that difficult to just go on Google Maps and say, hey, laundromat near me, if you’re in, you know, within your radius, and then just kind of make a spreadsheet or make a list of you know, all the laundromats that are in that area. You can check Google Maps, you can do the same with Yelp or one of the other maps like Bing Maps or Apple Maps or whatever you prefer. And then also, you know, if, if you’re in an area where you’re like, hey, maybe some of these laundromats don’t have websites or not online, you can also just drive around and make a list of laundromats there.

Jordan Berry [00:17:36]:
So what we’re trying to put into— again, you know, we have that, the, the Deal CRM there, and they don’t necessarily have to be deals to put them into the, uh, the Laundromat DFY platform. Platform, but we want to keep track of those laundromats. So what we— bare minimum of what we want from a laundromat is we want laundromat name if they have one. Might just be laundromat or coin laundry or whatever, but laundromat name if they have one. We try to be a little more descriptive in the name, by the way, so we can keep track of what’s what. But laundromat name, the address, if we can get like a phone number or an email address or something like that, we try to get that as well. And that sets us up to be able to reach out to them and find out if they’re interested in selling. So once we have that master list of all of the Laundromats in the area, it’s time to execute.

Jordan Berry [00:18:22]:
Uh, we’ve got a 3-touch outreach, uh, system that we utilize, okay? And then we’re going to execute that 3-touch outreach. Number 1, direct mail. Soft, low-pressure message. In fact, if you go to laundromatresource.com/resources, you can actually download a template of the exact letter that we mail out to laundromat owners when we’re looking to buy, uh, that laundromat. Okay, so go check that out if you need it. Number 2 is phone call. If we can get a phone number, then we’re just, you know, looking to have a conversation with them just to see, you know, if they might be interested in selling, or if not, if they know anybody who’s interested in selling. That’s a hot tip right there too, because multiple times we have spoken with a laundromat owner who’s not interested in selling but who knows someone who is and been able to strike up some deals that way.

Jordan Berry [00:19:13]:
So it’s a great way to go about it. And then number 3 is email or text follow-up messages. We try to keep a cadence. If they, if they’re interested, we try to touch base with them every 3 to 4 days. If they say, hey, I’m not interested in selling, we still try to keep in touch with them about once a month because we want to be there when they are ready to sell. All those touch points though are logged in the LaundromatDFY platform, and any potential deal information that we can glean from those direct mail, phone calls, emails, text messages. All of that is going into that, into the deal on the LaundromatDFY platform. In addition to that, we’re looking for distress signals that we prioritize.

Jordan Berry [00:19:59]:
So we definitely want to make note of in the, in the platform, we want to make note if we find a laundromat that has multiple broken machines, bad reviews that keep trending downward, reduced hours. Like, you know, we see laundromats all the time that are open like whenever it’s convenient for the owner. Maybe because they can’t do more hours or they just don’t need to or don’t want to do more hours. A lot of times that’s a sign that, hey, maybe they’re getting close to being ready to sell here. You know, if there’s— if it’s like a zombie, you know, dirty or unstaffed and just not being run well, if there’s, you know, out of order signs all over the place, empty parking lot consistently, these become a higher priority for us. If we’re working with a client who is like, hey, I’m looking for a value-add opportunity, we also have clients who just want turnkey done for you. Obviously, we prioritize other things when we’re doing that. You might think like, hey, that pretty much covers the 3 buckets, but within these buckets, there’s some more things that we do.

Jordan Berry [00:21:02]:
So number 4, so we’re at number step number 4, is our insider industry insider network that we tap into. So for us, we’re super blessed, right? Because we have a platform that’s been around a really long time. We’ve created a ton of value, and we know a ton of people in the industry because they’ve been on the podcast or we’ve just met them at events and things like that. So you can still take advantage of this by getting out there and starting to meet some people. Our objective here is to leverage the insider intelligence channels that we have to predict early sale behavior. That’s what we’re looking for. So let me give you some examples of who some of these industry insiders might be that you might be able to also tap into. So for example, equipment distributors, a lot of times they know if an owner needs to retool soon and/or if they want to retool.

Jordan Berry [00:21:57]:
They may not want to retool soon, or if they just put in new equipment with the intention of flipping the laundromat. Repair technicians can be a great source. Again, they know these owners, they know their levels of frustration, they know if they’re doing a good job or a bad job, and they might be able to help you assess some motivation on, on selling. We also try to talk with CPAs, even probate, divorce, business dissolution attorneys. We’re trying to tap into those networks as well because a lot of times they know before anybody else does. So we’re utilizing that and maybe some other people too. There’s different like vendors and stuff like that that we can tap into sometimes. But those are the main ones that deals might come from.

Jordan Berry [00:22:46]:
Again, one thing that we do is for some of these channels, we will offer that finder’s fee, and that will help us to, you know, be front of the line. If, if somebody knows somebody’s willing to sell and they know they’re going to make $500 for it, then they’re more likely to bring it to you first. Number 5 in our 6-step process is we’re doing some landlord and property intelligence as well. Even if our client’s not looking for the real estate as well, we’re gonna— our objective here is to discover opportunities through building owners. So here’s, here’s kind of what we’re doing is we’re identifying all the buildings we can find that are housing laundromats currently. We’re pulling the landlord ownership data from county records and we’re contacting those landlords. Here’s what we do when we contact them. We’re going to ask them about tenant performance.

Jordan Berry [00:23:40]:
We’re going to ask about potential vacancies. We’re going to ask about how much time is left on the lease and if they’re satisfied. And we’re asking if any of their owners are looking to exit. We’re looking for our, our goal there is to try to again, catch deals before they come on the market and to be a go-to solution for landlords when they find themselves in a situation where maybe they have a vacancy where a laundromat would be a good fit. We can come in and assess that and say, hey, you know what, let’s build a laundromat here, this might be a good idea. Or if they have a laundromat vacancy or they’re unsatisfied with their current tenants and they want somebody who’s going to come in and run that laundromat professionally. So that’s what we’re tapping into there. Number 6 out of our 6-step process is monitoring and signals.

Jordan Berry [00:24:31]:
We’re trying to capture real-time distress or opportunity indicators. We’ll try to use the FOIA, the Freedom of Information Act, to find expired business licenses. We’re looking for machine permit renewals. We, we, you know, check local news alerts for fires or floods. We utilize— I mentioned this before— but utilize Google Alerts. Laundromat closing in this city, business for sale in this city. Any kind of distress means that we’re going to reach out to them immediately. That might feel super overwhelming.

Jordan Berry [00:25:05]:
I need to say this right now is that, listen, I acknowledge and I realize if you’re out there trying to do all this yourself, plus you maybe are working your 9 to 5 and you have a family and you’ve got a life, this can be very, very difficult to do all of these things, if not even impossible. It’s a lot of work, but Let me just tell you, if you have to focus on a few things, number one, the easiest thing, lowest hanging fruit, is to do that public market search online. Find a laundromat online. It’s easier said than done today in today’s market, but you can find deals online, and we do all the time. So be looking there. That’s the lowest hanging fruit. After that, I would be tapping into the broker network. The broker network would And still most laundromats are sold through brokers.

Jordan Berry [00:25:57]:
And if you can find deals that are either newly on the market or even before they go out publicly on the market, you can have a much better chance of getting that laundromat deal than if you are solely relying on online listings. And then next in priority would be do direct mail. Direct mail is the best kind of bang for your buck. You know, obviously like more effective would be going to each laundromat, meeting the owners, having conversations, but so time-consuming. You can’t do that for all of them, and a lot of times they won’t answer the phone. So that direct mail tends to be a little bit more effective. And I will say, on the direct mail, it’s a numbers game. Uh, you know, most of the time when I talk to people and they say, hey, I sent out mail and it didn’t work, then I’ll ask them, well, how much did you send out? And they’ll say, well, I sent it out to 15 laundromats.

Jordan Berry [00:26:49]:
And just to give you a reference, like framework for what we do is we send them out to all the laundromats in the area. That might be 15 if you’re kind of out in no man’s land a little bit, but it might be 100 if you’re in New York or LA or something like that. Recognizing that you have a life and all that, if you’re going to do it yourself, the things that I would prioritize is that online search, then the brokers, then the direct mail, uh, and do as much of it as you can. And be okay if you can’t do more. Okay. You will find a deal if you stick with it. It might just take a little longer or maybe you’ll get lucky and you’ll find it right away. That happens too.

Jordan Berry [00:27:29]:
So, okay. That’s our entire system of what we use to help our clients find deals. So if you want to do it yourself, go to laundromatdfy.com. It’s free. You can sign up for it. You can use the platform. We’ll have that little bug fix that we found in the video at the end there. We’ll have it fixed by the time you’re up and running and Listen, if you’re somebody out there who’s like, you know what, I’d love to find a laundromat deal.

Jordan Berry [00:27:55]:
I don’t have time to do all this myself. I love if you guys just did it for us. Check out laundromatresource.com/coaching and book a, book a call over there. You’ll be able to talk to us. We’ll walk you through what options you have with us. And listen, we’re here to help you succeed. That’s what we’ve been doing for a long time now. And we’ve got a team to help do all of this stuff.

Jordan Berry [00:28:23]:
Stuff for you if you need us to. All right, all right, uh, listen, that is step 1, is finding the deal. Step 2 is coming up in the next video. That is all about once you find that deal, how do you analyze it? How do you determine how much it’s worth? And how do you make a compelling offer so that you have the best chance of getting that deal? That’s what we’re going to dig into. See you there. You overpay for a laundromat or make the wrong offer, it can take years to dig yourself out of that hole. I know because that’s exactly what I did with my first laundromat over 12 years ago. In this video, I’m going to show you exactly how to determine the value of a laundromat, make the right offer, including all the expensive lessons that I learned along the way.

Jordan Berry [00:29:17]:
So that you don’t have to learn them the hard way, the way that I did. Now, here’s the good news. This is actually a pretty simple process if you know what you’re doing. Not easy, but simple. And you can get enough information to value a laundromat with just 4 numbers. Why? Because laundromats are valued as a multiple of the net income. So if you get the net income and the other 3 factors that a multiple is driven by, that’s going to give you enough to make an evaluation of the laundromat. So number 1, age and condition of the equipment.

Jordan Berry [00:29:54]:
Newer equipment means higher value, obviously. Number 2, rents as a percentage of the gross income. High rate kills deals faster than almost anything else. And number 3, how many years are left on the lease. A strong lease protects you, and a weak one creates risk. If you want help running these numbers quickly and consistently, we’ve actually built a calculator at laundromatresource.com/calculators where there’s an analysis calculator that’ll walk you through this exact process. But this is just the overview. It’s enough to get you started.

Jordan Berry [00:30:27]:
If you’re itching to go take action right now, leave a like and go get after it. But if you want to see exactly how we analyze analyze deals, pressure test them, and advise our clients whether they should walk away or make an offer. Let’s head back to the studio and I’ll walk you through the exact process that we utilize to value a laundromat and to create a compelling offer for our clients. Okay, I told you the 4 numbers that you need to be able to value a laundromat. Let’s go through it in depth so that I can show you exactly what to do with those numbers to determine the value and how to craft a compelling offer to give you the best chance of getting that laundromat deal locked up and, and getting in the game here. That’s the whole goal, right? Okay. So let me explain to you kind of how this works because it can be a little confusing and maybe even a little bit frustrating if you’re not familiar with it. Generally speaking, this is not always the case, but typically when you go to buy a laundromat, a lot of times you’re going to get very little information up front and then you get more information after you make your offer and get it accepted.

Jordan Berry [00:31:37]:
So when we analyze a a laundromat deal, we kind of analyze it two different times. The first time, well, we analyze it a bunch throughout the process, but two main times, right? The first analysis, we utilize the numbers the seller gives us to determine the value of the laundromat. Okay. A lot of times those numbers are very round numbers, a lot of zeros. A lot of times, a lot of times they’re, you know, they’re averages, they’re unverified numbers. And that can be a little scary to make an offer based off of that. But a lot of times that’s what you’re making your offer based off of. And you don’t get more in-depth numbers until after you get your offer accepted and start the due diligence, which will be the next video, by the way, of what exactly to do once you get that laundromat under contract.

Jordan Berry [00:32:27]:
But before we get there, we’ve got to talk about how do we value it based on the numbers the seller gives us and how do we craft a compelling offer that also protects us from making an offer that turns out to be a bad offer because the information was bad or wrong or whatever. That’s what we’re going to talk about today. Let’s dig into this again. We’re using the numbers the seller gives us most of the time. Now, again, quick overview. We need 4 numbers to determine the value of a laundromat. There’s other things that play into it, but initially all we really need is these 4 numbers to be able to make an offer, a compelling offer. Okay, so we need the net operating income.

Jordan Berry [00:33:10]:
We need the age and conditions of the machines. We need the rent amount and we need the number of years remaining on the lease. Now the question then is, what do we do with these numbers once we get them? How do we translate those into a value for the laundromat? Okay, so let me show you exactly how to do that, what to do with these numbers. To do that, I’m going to show you our analysis calculator that we have here at laundromatresource.com. So check out laundromatresource.com, go to the calculator, page and go to the analysis calculator. We’ll link that. If you’re on YouTube, that’ll be down below. If you’re on the podcast, we’ll have that in the show notes page.

Jordan Berry [00:33:48]:
But again, laundromatresource.com, navigate to resources and calculators, go to the analysis calculator. This is what will pop up. It is our analysis calculator. Now you can input information about a particular laundromat. You can add a photo. Let me see if I have a photo even. That I can upload. Do I have a picture of a laundromat somewhere? No, but I do have a picture of this rainbow out in front of my house.

Jordan Berry [00:34:15]:
I’ll put that there and just pretend like that’s a laundromat. And you can put the business address and a Google Maps link if you want. The reason you might want to do this is because this calculator will spit out an analysis of the laundromat and you can actually download it as a PDF. I utilize those PDFs for 3, and the calculator for 3 main things, right? Number 1, obviously, is to determine the value of a laundromat. But that PDF, I will keep it for my own files just so I can keep track of the laundromats that I’m looking at. Again, I will upload this actually to the deals in the Laundromat DFY platform. We talked about that in the last video. If you’re not familiar, check out Laundromat DFY, done for you, dfy.com, and create an account over there.

Jordan Berry [00:35:03]:
It’s absolutely free. It’s the platform we utilize to help clients find laundromats. You can upload that analysis of the laundromat, the PDF, up to your CRM over here at laundromatdfy.com. Keep track of everything. And also we— so that’s the first thing, keep track of things for you. The second thing is we, if you have a business partner, for us it’s our clients, but if you have a business partner or somebody else at your work, a spouse maybe, it’ll have a breakdown of all the numbers. I’ll show you one at the very end of this process. And that way you can present it to them and they can ask their questions, but it’ll have everything they need to determine the value for themselves.

Jordan Berry [00:35:44]:
And number 3 is if you’re working with a lender, you can send this over to the lender and just say, hey, here’s a quick analysis of this, you know, from the Lawn Mower Resource Analysis Calculator. So you can actually add a whole lot more details here too to kind of keep track of all the stuff. You can actually include every single machine if you want to, that way you have a list of all that and all the info about it if you want. That’s there for you if you want to use it. We’re not going to mess with any of that today. You just click add more, by the way. But you can put that in there and that’ll be on the PDF. Okay? So now we know the 4 numbers.

Jordan Berry [00:36:20]:
So the first one is what we call the net operating income. Just so everybody’s on the same page, net operating income is how much money’s coming in the laundromat minus how much money’s going out of the laundromat before things like loans, taxes, things like that. Like that. Okay. So that’s your net operating income. That’s the cornerstone of the value of a laundromat. And another way to think of it is that’s the performance of the laundromat. That’s how the laundromat’s performing and how we know if it’s performing well or not so good.

Jordan Berry [00:36:52]:
Okay. So let’s do a sample deal. I’m just going to make it up, but it’s based on a lot of deals that we look at over here. So, you know, the numbers will, they’ll make sense even if they’re not the same numbers as your deal. That’s why the calculator’s here. Okay. So let’s just say this one’s making $15,000 per month in gross income. That’s total income.

Jordan Berry [00:37:16]:
And let’s say its expenses, including everything like rent, utilities, any labor, insurance, kind of all that is maintenance, you know, is about $9,000 per month. That would leave us with a monthly net operating income of $6,000 a a month or annually $72,000 a month. Okay. So the question then is how do we determine the multiple that translates this $72,000 into the value of the laundromat? Okay. That’s where the other 3 numbers come into play. So let’s say in our target laundromat here, we’ve got equipment that’s around 6 to 9 years old. You know, it’s not new, but it’s also not old. It’s pretty good equipment.

Jordan Berry [00:38:05]:
So you can see that that affects the multiple over here a little bit. These multiples, we do adjust them here and there because the market fluctuates. So if you use the calculator down the line and these numbers are a little different, just know that the market has fluctuated a little bit and that’s why the numbers are different. Okay. And again, we look at hundreds of deals every single, like maybe thousands of deals every single month. So we’re, we’ve got our finger on the pulse kind of across the nation and even in Canada and Australia, a little bit in Europe even. So we got our finger on the pulse pretty good here on what the multiples are looking like. Okay.

Jordan Berry [00:38:47]:
So, so that’s age of the equipment here. Again, during due diligence, we’re going to have this stuff inspected, make sure that it really is this and the owner’s not just telling you it’s younger than it is, or the owner maybe doesn’t know. Right. We’re going to, you know, verify all this and then we’re going to inspect the equipment to make sure they’re in good shape or to at least know what kind of shape they’re in so that we can make a decision going forward. Okay. But that’s in due diligence. We’ll talk about that in the next video. Okay.

Jordan Berry [00:39:16]:
Now let’s talk about rent amount. Okay. So let’s say in our example, rent is $3,000 per month, right? Now the question is, is this a good rent for a laundromat or a bad rent for a laundromat? And I will say up front, up front that a bad lease or high rent, that might be the number one cause of laundromat failure. So it’s really important that you get your lease right. Again, we’ll talk about that in the next video, but it’s really important. But for now, the question is, is this a good rent or a bad rent? Well, the way that we determine if this rent amount is good or bad is we want to look at this number, this $3,000, as a percentage of the gross income. Okay. So you can see for our example here, it’s 20% of the gross income.

Jordan Berry [00:40:09]:
So now the question is, is that a good percentage or a bad percentage? Well, let me tell you, uh, what we’re targeting is 25% of gross income or less. So you might look at this and be like, whoa, hey, we’re doing pretty good. We’re at 20%. That’s really good. Or maybe it was above that, maybe the rent’s $5,000 a month and now we’re at 33%. Does that mean we shouldn’t buy it? No, not necessarily, but it does start to affect the multiple, right? That’s when it starts, the multiple starts dropping after about 25% of gross, okay? Now you can see we’re in pretty good shape here. However, many leases have one of two additional expenses as opposed to base rent. This is what we call base rent.

Jordan Berry [00:41:06]:
This is what most people just look at. Oh, my rent’s $3,000 a month. But a lot of times these leases have one or one of two different expenses in addition to that base rent. The first one being what we call the common area maintenance expense. We might see CAM, CAM, common area maintenance expense. It’s exactly what it sounds like. If you’re a laundry Apartments in like a strip center or something, there’s some common areas that need to be maintained. And so the tenants split the cost of maintaining the common areas.

Jordan Berry [00:41:33]:
Maybe there’s some lights, so there’s an electricity bill, and maybe there’s a gardener or snow removal or things like that, painting, stuff like that. Common area maintenance expense, that’s included in your rent. Or you might— what you might have, what’s called a triple net lease. Triple net lease, if you’re not familiar with that, greatest invention ever. A commercial landlord, kind of a downer if you own a business with a triple net lease, because what this means is that the tenants pay the expenses of the, of the property. And the 3 expenses, the 3 main, the 3 nets, if you will, the triple net expense are property maintenance, property taxes, and property insurance. Okay. So that means in addition to your laundromat maintenance, your laundromat taxes, your laundromat insurance, you’ve got to pay for the properties as well.

Jordan Berry [00:42:28]:
And this number can vary quite wildly, but let’s just say for our example, it’s $1,000 a month in addition to our base rent. So now you can see our percentage of our income has jumped up above that 25% target. Again, doesn’t necessarily mean that this laundromat is you shouldn’t buy it or that it’s bad or anything like that, but it starts to affect the multiple a little bit as we go through the process. Okay. Now, real quick on this percentage, sometimes I’d say semi-often, actually, there’s an opportunity for some quick wins here because in order to get this back under, you know, the 25% mark, most of the time it’s unlikely you’re going to negotiate a lower lease. I’ll just say I’m a commercial broker. I am involved in commercial real estate a lot. I do this for laundromats a lot.

Jordan Berry [00:43:26]:
I’ll just say it’s not impossible, but most of the time it’s unlikely you’re going to negotiate a lower rent, but you may have some quick wins to improve the gross income quickly. For example, maybe the laundromat, this happens a lot, maybe the laundromat’s underpriced and you raise equipment, you know, a vend price by a quarter or more right? That could easily bring this up, this number up, which would then get this percentage in line again, right? Maybe there’s some improvements you can make. Maybe there’s some marketing you can start doing, things like that to get this back in line. So we also want to look at quick wins, but we’re buying it as it is now, not as we’re going to make it, right? Because we got to put the work and take the risk into making it like that. Okay. So for our total rent amount here, we’re at $4,000, which again is 26.7% of our gross income. Of $15,000. So that affects the multiple a little bit.

Jordan Berry [00:44:24]:
And then our fourth number that we’re looking for here is how many years are left on the lease. Now, question I get asked all the time is, well, how much time do I need on the lease? Like, what’s a, what’s a, you know, what’s the minimum, right? And here’s my answer to this is is I would say bare minimum, bare minimum, 10 years you need on the lease. But really, I’m feeling uncomfortable until you have at least 15 years on the lease. Now, that begs the question, hey, I’m looking at a laundromat, everything’s checking out, I really like it, but it has 7 years left on the lease or 3 years left on the lease. Does that mean I shouldn’t buy it? The answer to that is no. And we’re going to talk about how to craft a compelling offer here. But what you would do in that case, if everything else is checking out so far and you decide you want to make an offer, we would add a contingency to that offer. We’ll say, hey, we want to buy our laundromat at X amount of dollars.

Jordan Berry [00:45:27]:
One of the contingencies of buying this thing though is that we can add time to the lease. Um, and so I get asked the question a lot, well, should I try to get a new lease or should I try to add more time to the existing lease? Um, and I’ll I would say my perspective on this, there’s some people who disagree with this, but I think they’re wrong, genuinely. Like I think they’re smart and they’re good, but I think they’re wrong. Generally speaking, it’s better to try to add time to the existing lease. We do that by adding 5 or 10-year options to the lease, right? So you’d say, hey, we have 7 years left. We’d like to add 2 or 3 5-year options to that lease. So we’d say, hey, we want to make an offer X amount of dollars contingent one, you know, being able to add 2 or 3 5-year options to the lease, right? So then we would have to negotiate that with the landlord. The reason I say that’s generally better, now there’s nuance here.

Jordan Berry [00:46:26]:
You want to understand the lease that you’re signing up for. There may be things in that lease that you need to try to get rid of because they’re going to cripple you. Obviously that would be a better opportunity to negotiate a new lease. But again, commercial real estate background, and I do this with laundromats all the time. What I’ve found is that 97% 7 times out of 100, if you do a new lease, things are not going to go in your favor. Landlords have a lot of negotiating power right now. A lot of laundromats, because they’ve had long leases, they’re under market. So if you do a new lease, they’re going to raise the price on you.

Jordan Berry [00:47:01]:
The terms are going to be stacked in their favor. So a lot of times it’s better to try to add 5-year options to an existing lease as opposed to doing a whole new lease. Now again, it’s not across the board, and if you need help with that, uh, you know, laundromatresource.com We’ve got a team that can help you kind of navigate that and look at your lease with you and help you make the right decision. But like I said, most of the time adding options to the lease is going to benefit you. So let’s say we’ve got 12 years left on the lease here that, you know, but we’re going to add a contingency to say, hey, we want, you know, 1 to 2 more 5-year options on the lease. Now, real quick before we move on from that, one question I get asked all the time time is what’s an ideal lease? What am I shooting for? Or what if I have to do a brand new lease? What should I ask for? Okay, so here’s what I would be shooting for. If I was doing a brand new lease, I’d probably be looking for a 10-year lease with 2 or 3 5-year options to renew. That effectively gives you 20 years to 25 years.

Jordan Berry [00:48:08]:
I would want to make sure if at all possible, those 5-year options have I had the terms of those options spelled out, nothing like market rent. Landlords want to do market rent on those 5-year options. Laundromat owners want to have a consistent, like, hey, they’re going to go up 2.5% a year or 3% a year. It’s called the escalator, right? We want to know the terms ahead of time and be able to control those and negotiate those ahead of time. That’s what I would be shooting for. And I’d also want to make sure that those options are assignable or assumable so that if I decide to sell down the line, the new owner assume those and utilize those options if they chose to do so. So hopefully that gives you a quick rundown of that. There’s a whole lot that goes into that.

Jordan Berry [00:48:54]:
And I should say upfront, like, or I guess at the end here, rent and number of years on lease are not the only terms you need to pay attention to on the lease. Lease is very important. I always recommend 3 people helping you go through a lease. Number 1, you, you should read the lease. I know it’s boring. I know it’s hard to understand. They do that on purpose a lot of times, but you should read that and understand it to the best of your ability. You should have a lawyer probably look over your lease to make sure you understand all the legal gotchas that could be potentially hazardous to your business there.

Jordan Berry [00:49:29]:
And then number 3, I would recommend you having somebody who understands the laundromat industry read through that lease with you as well, just looking for laundromat-specific gotchas. Again, we have a team that can help do that if that’s something you need help with, laundromatresource.com/coaching. And then also I would utilize but not solely rely on yet, at least, AI to help you go through a lease. You can dump a lease into AI and say, hey, what are the pitfalls here? That can be a really good tool as well. Again, I don’t know that I would solely rely on that, but that is a tool that you could utilize. Okay. All right, the last thing, that factor that might, you know, might impact the valuation here is where your laundromat is located. So we’ve broken it down just to keep it simple.

Jordan Berry [00:50:21]:
If you’re in a large metro area, if you’re in a suburb or town or rural area, you can choose that. Again, I’m in like LA, so I’m in a large market. What we found, again, we look at deals all over the country, all the time, all day, every day, pretty much. What we found is that in larger metro areas, LA, New York, Chicago, some of the Texas markets, Florida markets, right, some of the bigger markets, there just tends to be more buyer competition. And so that tends to drive the multiples up. And in smaller markets, if you’re out kind of in the middle of nowhere, there’s less buyer demand. And so that can drive the multiple down there. So you don’t have to utilize it if you’re, you know, if you’re like, well, I’m not really sure, just leave I could live in a suburb town, you know, and that won’t affect the multiple at all, but I’m in a big market.

Jordan Berry [00:51:13]:
There’s a lot of buyer demand. So you can see that it pushed the multiple up for this specific location. And you can see that, listen, the value of the laundromat based on, again, this is the numbers the seller gave us, a whole lot of zeros in here. These are averages based on all of that, the valuation of this particular laundromat is $342,000. And again, it’ll give you a suggested range here. Now I will say again, we’re going to go through this in the next video, but I will say that if you have more detailed information, you can actually add a whole lot more detailed information like the monthly profit and loss or income and expense here for all the different categories of income and all the different categories of expenses here. It’ll give you some nice visual charts and stuff and the trajectory, which again, we’ll go through in the next video. You can get way more precise with this calculator, but for this first pass, typically these are the kind of numbers we’re getting and that’s what we’re going to utilize.

Jordan Berry [00:52:15]:
So based on that, we can make an offer somewhere in this range, the $306,000 to $360,000. Again, listen, you can make an offer anywhere that you want to, you know, any price point. You can go under this $306,000, you can go over $360,000 if you feel like you’re in a super competitive market. But this will give you a pretty good range and a pretty good ballpark valuation based on the numbers the seller gave you. Okay, so now once we have that information, you know, the question is, what are we, what are we going to do with it to make an offer and to make it compelling? Okay, so again, we want to make a strong offer. That calculator will help you with the valuation. Oh, I should mention, and I didn’t, let me just show you real quick the— let me show you real quick the PDF that you can download. Okay, so you just click download report, it’ll create an analysis report.

Jordan Berry [00:53:19]:
And again, now you have all the information that you need right here at your fingertips. All the performance information, equipment age, all the lease information, the valuation, the offer, suggested offer range, any details you added in about the business. Business. And if you got more detail about the income and expenses, that’ll all be here on the PDF as well. And then you have it to keep yourself organized, upload it to the laundromatdfy.com platform, share it with a partner or spouse, share it with a lender, uh, and you got it there for you just to kind of keep yourself organized. Okay. Okay. Now the question becomes, Once I have that information, how do I craft a compelling offer? So I’m going to point you to laundromatresource.com/resources.

Jordan Berry [00:54:11]:
There’s some resources over there to help you, help you do that, including some templates for an LOI, which is a letter of intent, or a purchase agreement. If you’re going to do this yourself, you can utilize those templates to make those offers. There’s also— this is part of the pro community, but which you can join is pretty cheap and definitely worth it. If you’re in this part of the process and you’re trying to do it yourself, for sure worth it. It’s a no-brainer, but there’s a sample list of contingencies that you might want to offer over there as well. So you might want to include some of those into your offer. Okay. So to create a compelling offer, we want to make sure our valuation is a correct valuation, but also competitive valuation.

Jordan Berry [00:54:58]:
And you want to make sure that you have the contingencies you need you need in your offer, but not contingencies you don’t need. Okay. And the reason I say that is if you add a whole bunch of contingencies in your offer, it gets a little overwhelming. And the more contingencies you add, the less compelling your offer is. Okay. Now I say that to discourage you from adding all the contingencies in that contingency sample list. List into every single offer because not every offer needs all those contingencies. However, I want to emphasize, do include the contingencies you need.

Jordan Berry [00:55:38]:
And if you’re not sure, either get help, ask somebody, or default to including them, and you can negotiate them later if you need to. But, uh, again, crafting that compelling offer, making sure the valuation’s right, and also having the contingencies you need but not the ones you don’t need into to that offer. And again, there’s templates over there at lawnmowerresource.com/resources. You may, I can’t remember off the top of my head, you may need to be a pro member to utilize those templates. I think maybe you do, but like I said, it’s a no-brainer. If you’re at this part of the process and you’re trying to DIY this, go for it. If you’re out there and you’re like, hey, you know what? I want help finding a deal or I want help going through the analysis, head over to lawnmowerresource.com/coaching, sign up for a free strategy call. Call.

Jordan Berry [00:56:27]:
We’ll go through those with you and tell you what options we have to help you through that process. We do that for a whole bunch of clients already. We’ve done it for— I’ve done personally, I’ve done over 1,500 consulting calls now in the last 5.5, 6 years. And so our team is super experienced on doing this. We’ve got our system down and can help you whether you want us to do it for you or if you want us to do it with you and make sure that you buy it right the first time. Check out LearnMyResourceCenter.com. Coachings. Okay.

Jordan Berry [00:57:01]:
Well, that said, we’ll see you in part 3 where we’ll figure out what you’re supposed to do once you get that offer in and get it accepted. Now, how do we go about the due diligence? That part is the tricky part, and we’re going to show you exactly what we do for our clients so that if you decide to do it yourself, you won’t get burned like I did in my first deal, which I’ll tell you a little bit about in the next video. See you over there. There. All right, this is part 3 of a free course on how to buy your first laundromat. If you haven’t watched the first 2 videos yet, go back, do that first, because those are exactly how you can find a deal and get it under contract, including the tools and resources that we use on our team that we’re offering to you. This video is about what happens after that. Once a laundromat is under contract, job is simple— not easy, but It’s simple to verify the performance of the business before you close.

Jordan Berry [00:57:57]:
We want you to know exactly what you’re buying before you buy it. This could be easier said than done, especially since most laundromats are still challenging businesses. But when we help clients through this phase, everything we do falls under what I call the 4 pillars of due diligence. Pillar number 1, verify the income of the laundromat. Not what the seller says, but what the store actually earns. Pillar number 2, verify the expenses. You know how much money’s coming in, you got to know how much is going out. Utilities, rent, repairs, et cetera.

Jordan Berry [00:58:30]:
You got to know what the expenses are. Pillar number 3, determine the trajectory of the business. Who’s the lease competition, market trends, and importantly, whether the store is improving or declining. And pillar number 4, identifying the value-add opportunities. What’s the plan after You buy pricing upgrades, marketing operations. How do you make it better? If you’re itching to get started, we keep the tools and resources and checklists that support all 4 of these pillars at laundromatresource.com/resources. But this is just a framework. You can get after it right now, those 4 pillars and the tools on the website.

Jordan Berry [00:59:08]:
But if you want to see how we actually perform due diligence for our clients step step by step, stick around. Let’s head back to the studio and I’ll walk you through our 4 pillars of due diligence and what you need to do to ensure that you buy your first laundromat the right way the first time. Okay, back in the studio to break down the 4 pillars of due diligence for you. Now, if you remember from the last video, this is part 3, by the way, a 3-part course on how to buy your first laundromat. Part 1, was how to find the laundromat. We introduced you to the laundromatdfy.com, done for you, laundromatdfy.com platform that we created a DIY user type for you to be able to utilize the same platform that we use to find deals for clients, keep track of those deals, and to keep track of brokers also as you’re building relationships with brokers looking for deals. So go check that out. And then the second video, We talked about how to value a laundromat and create a compelling offer for that laundromat to get you to the point where you can do this part 3 of due diligence over here.

Jordan Berry [01:00:16]:
In part 2, in determining the value, we introduced you to our tool, the Laundromat Analysis Calculator, which you can find at laundromatresource.com under resources and calculators over there. If you’re at a point now where you’re trying to do due diligence on a laundromat, this is the video for you. I’m going to show you exactly the process that we take our clients through, our 4 pillars of due diligence, uh, to help make sure that they buy the right laundromat the first time. Uh, they don’t have to go through the expensive mistakes that I went through that I talked about. And, uh, listen, our goal here, one of our core values and our goal during this process is clarity. And the whole point of clarity is we want you to know what you’re buying before you buy it, just like I mentioned. Here’s, here’s the process that we utilize that you can take and utilize yourself. Now, if you remember from the last video, most of the time when we’re making an offer on a laundromat, we’re using the numbers the seller gives us.

Jordan Berry [01:01:16]:
That’s our first analysis. A lot of times there’s a lot of zeros. Those numbers are very average and round. They’re unverified. Well, once we get that offer accepted, we need start getting specific information from the sellers so that we can do our second analysis, which is where we use the numbers that you discover in that analysis. Our goal here is to get more precise numbers, as precise as we can, and to use those numbers to look for how this laundromat is really performing. Okay, we utilize what we call our income verification stack to do that. And here’s the, here’s the reality is that still to this day, most laundromats are cash businesses.

Jordan Berry [01:02:00]:
There’s not a lot of cash accountability. Sometimes there’s reliable collection data or profit and loss information that you can utilize. Sometimes there’s, you know, accurate taxes and bank deposit statements, but a lot of times those are missing, and it can make it tricky to really value a laundromat. So What we do is we take a few different methods of trying to determine how much money a laundromat is making and we stack them on top of each other. Okay. So let’s dive into our 4 pillars of due diligence and with pillar number 1 and determining the laundromat’s income. Okay. So we utilize that income verification stack and what we do is we stack them on top of each other and we look to see, hey, is there anything weird sticking out that shouldn’t be? Are there any anomalies here? And if there are, are, then we dig into those and we say, hey, what’s really going on here? Did the seller misrepresent something or did they not know something? Did we do something wrong? Is there something weird happening with this particular laundromat that we need to know about? Right? We don’t want to have any big surprises.

Jordan Berry [01:03:03]:
So that’s what we’re going to do to get a, get a pretty good sense of how much money this laundromat’s bringing in. Let me give you a couple of examples of what you can do to verify quantify the income of a laundromat. Number 1, you can do what we call coin collections. That is going through with the owner, collecting coins out of every machine and counting those coins and seeing how much money actually came in for a defined period of time. Okay, just very practically speaking, here’s what this looks like. You go in the very first coin collection, you empty all of machines. Uh, you can count the coins, but the whole goal here is to start from scratch. Okay? Zero coins in the boxes so that the next collection, you’ll have a defined period of time between those collections.

Jordan Berry [01:03:53]:
Okay? One of the stipulations or contingencies that you want to make sure you have in your offer is to make sure that if you’re doing coin collections, the owner doesn’t do any collections without you. Okay? So you’re going to go through and you’re going to collect the coins with the owner. I count coins when I do coin collections. And even if I’m just collecting in a laundromat that I own, I do them by size and type of machine. Okay. So I’m not counting the coins out of every single individual machine. I’m counting and recording coins by all the top loaders, all the 20-pounders, and then I count them and record them. All the 30-pounders, count them, record them.

Jordan Berry [01:04:31]:
All the 60-pounders, count them, record them. Store, right? So all the dryers, all right, or all the 30-pound stack dryers, all the 45-pound stack dryers, right? Depending on what machines they have in there, I’m collecting them that way. And the reason I do that instead of just collecting the whole store and then counting is this gives me a little bit more data to work with in terms of, okay, what machines are popular. This is going to allow me to calculate turns per day for that collection period. And if you’re not familiar with that, turns per day is one of the KPIs that we utilize— key performance indicators— that we utilize in industry to help us decide how well we’re performing, help us benchmark our store. Turns per day is the average number of times each machine is used each day, right? So you might have a store where, hey, the 20-pounders have 4.7 turns per day and the 40-pounders have, you know, 2.9 turns per day. That just tells you that either there’s, uh, less 20-pounders and they’re popular, or maybe there’s a pricing issue, or it just gives you a more information to kind of work with to determine your strategy of how you’re going to run your store once you take over. Okay.

Jordan Berry [01:05:42]:
So that’s how I collect coins. You want to do that over a period of 2 to 4 weeks. And the goal is to get an average daily collection over that period of time and extrapolate that back out to— we use 30.4. That’s the average number of days in a month, 30.4. And we want to see that that number, the coin collection number, is pretty close to within, you know, 5 or so percent of how much money is actually coming into the laundromat or how much money that they said was coming into the laundromat before we made our offer. Right. So we want to see it being pretty close. Now, there are some things that can make it fluctuate.

Jordan Berry [01:06:22]:
There’s some seasonal fluctuality, fluctuation, fluctuations in laundromats, and we need to take that into consideration. However, we want to see that, you know, things are not drastically different there. And if they are, then we need to dig into a little bit of why, you know, maybe it’s like, hey, it’s, it’s June and June is just a slower month in a lot of laundromats, you know, or there was a big snowstorm and everybody stayed home for 2 weeks because we all got locked in. So the collection was lower or something like that, right? So we want to dig into that. Or it could be, hey, they said more money was coming in that’s actually coming in, right? That’s a possibility too. So we want to do that collection count. Now, this is not foolproof. I would not rely solely on this.

Jordan Berry [01:07:05]:
Owners could easily do what we call salt the mines, which is add quarters, or even do phantom washes, which is where they put quarters in and run washes. So in order to have a little bit of accountability on that, and also to see a little bit more what’s going on in the store, you know, a lot of people will tell you, hey, go sit in the store, you know, all day for on a weekday and on a weekend and just sit there all day. And you can do that. There’s nothing wrong with doing that at all. I don’t know about you, my time is pretty valuable, and I don’t necessarily want to sit at a laundromat all day if I don’t have to. So one thing I recommend is make it a contingency that you get access to the security camera footage. Now you can scrub through it quickly, and you can also make sure they’re not doing anything shady, uh, like running phantom washes or things things like that, right? Again, this is not foolproof, but this is one of the methods you can verify income in our stack of methods. Another one, let me pause real quick.

Jordan Berry [01:08:04]:
I want to point you to lawnmowerresource.com. Go to the resources tab and you can see guides and worksheets right there at the top. Uh, it might say something different. We’re getting ready to make some tweaks there, but it’ll say either guides and worksheets or tools and resources, something like that. And over there is a bunch of downloadable tools and resources. Some of them are free, some of them are part of our pro community. But again, if you’re in this due diligence phase and you’re trying to do it yourself, the pro community is a no-brainer over there because you get access to all these tools and resources. We have a monthly Q&A that you can jump into, and we can connect you up with a mastermind group in addition to that if you want to do that as well, which is super powerful But anyways, this is where our tools and resources live, where that can help you kind of go through this, including a collection sheet so that as you’re doing your coin counts, you can collect the information here.

Jordan Berry [01:09:02]:
You can see a collection sheet right here, right? Okay. So utilize that. Most of the tools and resources to help you go through this process are on that page and downloadable there. If you’re a client working with us, you actually get a personalized repository of these tools and resources and our a little more advanced tools and resources over there as well. If you’re interested in that, check out lawrencemattresource.com/coaching. Okay, now the second, uh, method or income stack that you can utilize that we’ll talk about today is what we call the water analysis. Okay, and that’s basically saying based on how much water is used in a store and based on how much it costs, uh, for that water and what the equipment mix is for that store and what the vend price is for that store. Based on that information, we can get a pretty good idea of how much money a store is making.

Jordan Berry [01:09:56]:
Okay, here’s the thing. I know that probably sounds very complicated to do that, but here’s the thing is that we have created, again, on the resources page, a water collection spreadsheet that’ll actually walk you through that whole process and do all the complicated math for you. I did it so you didn’t have to do it. You know what I mean? I got you. Don’t worry. So go download that water analysis spreadsheet over there. The one caveat to the water analysis spreadsheet is that almost every time, if not every time, that somebody has come to me and said, hey, the water analysis spreadsheet is giving me a way different number than what the owner’s claiming. Should I be worried? If not every time, almost every time, the reason behind it is somebody just Googled, hey, Hey, how many gallons of water does a 40-pound Speed Queen washer use? And they took that number and input it in there.

Jordan Berry [01:10:49]:
This spreadsheet depends, it’s very particular, depends on the specific model of the machine and how much water that particular model utilizes. So if you’re getting a way wrong number, you need to do some research. So let me just tell you real quick, the model numbers of most machines are either if you open up the door, if it’s a front load, if you open up the door or a top load, open up the top. Usually there’s a sticker either on the door or on the panel inside the door, or maybe on a top load it could be on the top or the back of the machine that has the model and serial number in it. So look there for the model number. You need to do that for every type and size of machine. So if they have 30-pound Speed Queens and they have 30-pound Dexters, you need to have the model number for both of them and do that for every every size washing machine in there. And once you have that data, you’re going to get a pretty good sense of how much money is actually coming into that laundromat based on that equipment, those vend prices, and how much water is being used in that store.

Jordan Berry [01:11:55]:
Okay. Again, it takes a little bit of work, but it’s totally worth it because it gives you pretty good data on how much is coming in. Okay. Again, that’s another way to stack information in our income verification stack, making sure things are just lining up. You can also utilize, you know, I, and I kind of mentioned this before, but you can also utilize your bank deposit statements, taxes, tax returns, things like that, some paperwork trail to help you verify the laundromat’s income. And most easily, if the store either is hybrid, it uses coin and a card or app payment system, or is entirely cashless or digital payment system, then you’re able to just print out a report, you know, from software things to say, here’s how much income has come in to these machines over this period of time. That makes things very simple. Okay, I need to pause real quick because one thing that we need to be aware of is that the self-serve income, that’s mostly what we’re talking about today, but many laundromats are adding drop-off wash and fold services and pickup and delivery services to their business.

Jordan Berry [01:13:06]:
Usually, if you’re unlucky, they’re going to have a paper ticket model where they just write up all the paper receipts and they have all those. You’re going to have to go through them all, put them in a spreadsheet and all that to verify all that. But if you’re lucky, they’re going to have a software system that’s helping them manage that business, that side of the business. And again, that you’ll be able to just print off reports for that. The one thing I’ll say there is you’ve got to make sure they’re not double dipping, which means they’re not counting income from the Caution fold and counting it as self-serve income, something we see a lot. If you need help with that, lawnmowerresource.com/coaching. We’ve got a team to help you kind of go through that and make sure that things are as they seem. We’ve done that plenty of times.

Jordan Berry [01:13:48]:
Okay, so that’s pillar number 1, determining the income can be very tricky. Again, we’ve got people that can help you through this whole process if you need it. Listen, if you’re going to spend tens or hundreds of thousands or more, or even 7 figures on a undermat and you’ve got questions or you’re feeling like you don’t exactly know, it’s a no-brainer. Get somebody in there to help you. We’ve got a team that can help, but we’re not the only ones in town. Find somebody that you trust, that you feel confident working with. I would much rather see you go get help with somebody else and make the right decision than not get any help at all. So again, we’ve got a team that can help you, but also go find somebody if you don’t like that I wear a backwards hat and hair, uh, that’s long, because I get that a lot sometimes for some reason.

Jordan Berry [01:14:35]:
But anyways, I don’t own a business because I want somebody else to tell me what I have to wear and what I have to look like. You know what I mean? That’s what I’m talking about. That’s the freedom we’re looking for, right? Okay, let’s jump into pillar number 2. That’s determining the laundromat’s expenses. And we know how much money’s coming in. We got to know how much money is going out. Typically, most expenses have some sort of paper trail, so that makes things a little bit easier to deal with. However, we want to make sure that we’re accounting for all of the expenses that we’re looking for here.

Jordan Berry [01:15:06]:
Okay, listen, we’re going to do things like requests, utility bills, any kind of invoices or things like that. Obviously we need a copy of the lease. And, uh, here’s a little hack again. If you’re DIYing this, here’s a little hack. You go to lawnmowerresource.com, go to the resources, go to the calculators, go back to the analysis calculator that we utilized in the last video. That’ll pop up here. And if you go to that performance section, uh, remember there’s, you know, the very first analysis kind of performance numbers. If you click the add more details button there, you’ll see a list of income sources and the most common laundromat expenses.

Jordan Berry [01:15:47]:
You can actually just use this as a checklist to make sure you don’t miss any expenses. Now, not every laundromat is going to have everything in this, you know, in this expense list here. Okay. Not every, every laundromat is going to have that, but use it as a checklist and rule it out. For example, maybe a laundromat is a self-serve, unattended laundromat and the owner’s taking care of it. There’s no payroll. You just want to verify that and make sure that’s the case, or there’s no phone bill because they don’t have a phone. They only, you know, only online or whatever, right? Just use it as a checklist to make sure you’re not missing any, uh, any expenses.

Jordan Berry [01:16:26]:
And just to tell you like why this is so important, I had a client who missed, Initially, we missed that there was a sewer bill. And the reason was the sewer bill was going to the landlord and the landlord was not forwarding it over to the laundromat owner. And so we discovered it and it ended up being about $500 a month of a sewer bill that the seller didn’t know about. And so when we found, we went through this checklist, when we found that if we had made the offer, if we had gone through with the offer we had originally made, This laundromat was at a 5X multiple. So that $500 a month is $6,000 a year cashflow they wouldn’t have had, but it’s also $30,000, 5 times that $6,000, $30,000 of equity they would have lost in the business right away. So very important you don’t miss any expenses. Little hack for you is to, you know, use this as a checklist and just rule out anything that’s not an expense for them. And, uh, and make sure you log anything that is an expense and make make sure that it is accurate and appropriate.

Jordan Berry [01:17:34]:
Okay? And then the other thing that I’ll just say is, hey, if there is any questions about it, get help. Okay? Find somebody you trust who knows the business, who can help you go through that. I made a very big, a few very big expensive mistakes early on. I can tell you it’s not pleasant. It’s not fun. And it would be well worth whatever the investment is. If you find another owner who will do it for free, Awesome. If you find another consultant that’s better than us, you’re probably wrong, but awesome.

Jordan Berry [01:18:02]:
And if you utilize us, it’s totally worth it. I’ll just say that upfront. It’s very, very easy for us to make up the value of the investment in our consulting just by making sure you’re doing everything right. Okay. Pillar number 3 is skipped by a lot of people, but determining the laundromat’s trajectory. And let me just quickly tell you what I mean by that. We want to look at the performance of the laundromat over time. Okay.

Jordan Berry [01:18:27]:
We want to see, is business generally trending up? And if so, why? How do we keep that train rolling? Is business plateaued? Everything’s flat. It’s about the same for the last year or two. We want to know why that’s happening and how we can increase that business. And we want to know, you know, is it dropping off a cliff here? Is that the trajectory we’re on? And what’s it Like, don’t catch a falling knife. We want to know that. And if it is dropping off, we need to adjust our valuation accordingly. And we need to make sure we have a game plan on how we can level that off and then begin that growth process again for that laundromat. This is what we’re looking at in terms of trajectory.

Jordan Berry [01:19:04]:
We want to know the, the laundromat’s income over time. We want to know the laundromat’s expenses over time. Have there been significant changes in either of those? Importantly, we want to know the laundromat’s utility usage over over time, definitely the water, also gas and electric. And then we want to guard against loss of income or value over time. Okay. So the other ones were kind of looking backwards. Now we want to also look forward. So that’s going to mean a few different things.

Jordan Berry [01:19:34]:
Okay. So number one, that’s where we really want to dig into the lease, make sure you understand the lease and make sure that it is all all set up to be good to go. You have enough time on it. The terms are good on it, all of that stuff for you so that when you take over, you don’t get hit by any lease surprises. We want to beware of decreasing revenue. So, you know, we want to make sure there’s no big problems or no new competitors or things like that that are really going to affect the, the income coming in. We want to beware of increasing expenses. We want to make sure there’s not going to be any big, like, if you have to have a lease with like a CAM, common area maintenance, or triple net lease, so there’s not going to be like a big roof repair or something like that coming up.

Jordan Berry [01:20:21]:
And you want to be aware of any other sudden big hits to the net operating income, right? So like the new competitor coming in or retooling or some kind of unknown problem, we want to make sure we get all those during the, you know, during, during the due diligence period, we want again, clarity. That’s what we’re looking for. Okay. Okay. And then pillar number 4 is our value. We call it our value add pillar. Really what we’re doing is we’re making sure we have a plan and a path forward after you take over the laundromat. We want to look for ways to improve the business, to increase income, decrease expenses, improve efficiency, do any repairs, maintenance, anything like that, add revenue streams, anything like that we want to be looking for during the due diligence period so that we can hit the ground running once we take over the store.

Jordan Berry [01:21:20]:
Okay. That was a lot. We went through a whole lot in this course. If you hung through all 3 of those, kudos to you. I hope you crush it. And hopefully the tools that we provided you and the resources we provided you help you through that process. But if you decide, hey, I’d love help going through all this, this sounds very overwhelming, we understand, we help a lot of people do this. We have a done-with-you model that we will help you through the process.

Jordan Berry [01:21:47]:
We will be looking over your shoulder, making sure you’re doing the right things, asking all the right questions, looking for the red flags, looking over your shoulder, making sure you’re not making any big mistakes to get that laundromat the first time, the right the right way. Or if you’re like, hey, I don’t have time to go out and find a laundromat and, uh, you know, do all this on my own, we want you to help. Uh, we’ve got a team that does that as well. And again, our, our Laundromat DFY platform is custom built specifically for that. We added on a DIY user type for that so that you could do that, but that is custom built for that. It’s, uh, and designed for that on the done-for-you side. So we can show you more about that side of things. If you’re interested in that, check lawnmowerresource.com/coaching and, you know, book a free strategy call and we will talk you through exactly what those packages look like and what you can expect.

Jordan Berry [01:22:43]:
Okay, hope you found this, hope you found it helpful. All right, hope you found it and I hope this is a nudge in the right direction, helping you achieve financial freedom or whatever your goals are, leaving that 9 to 5. I hope that this helps you.. If it does, very least drop me a like, maybe a, maybe a subscribe. And I would love to hear from you in the comments too. And if you have any other questions, throw those in the comments, love to answer those questions as well. If I can do anything else to help you hit us up, lawnmowerresource.com, and we’ll see you in the next video. Peace.