AMA

[Ronald Morris]

Hey everyone,
I have an interesting idea; well I think its interesting. I am looking to buy a laundromat this year and I feel like I have done enough due diligence. Here is the interesting idea part, please ask me anything you can think of as it relates to the laundromat. A few to get started might be mind set, opportunity cost, growth, demographics, ROI or if I am terrified. I would like to compile all questions asked into an accompanying sheet to Jordan’s accounting for any overlap of course. Ill put in basic information below.

Cost: 300k needs new machines estimated at 250-300k
Total on the high end 600k
Location: Southern California, well populated city with many upscale apartments nearby that have little to no onsite laundry
Next closest laundromat is just over 1 mile away.
Financing: In an ideal world I will put 30% down for the acquisition and get 100% of the new equipment finance, however, were prepared to put down 30% for the whole loan.

[Bryan Adams]

I am very interested in this I think it would be a valuable resource for anyone wanting to get started. Here are some of my questions?

How much time do you plan on spending at your laundromat?

What will your break even point be?

What is your projected ROI?

What services do you plan to offer?

[Ronald Morris]

Hey Bryan thanks for responding!

How much time do you plan on spending at your laundromat?
I plan on working there near full time for the first 6 months or so. I want to learn every aspect of running the business boot on the ground. I will then go part time and train an attendant to work a few days a week.

What will your break even point be?
We will be profitable from day one of buying the business. If all the machines weren’t 15+ years old and we kept things as is, we would reach profitability after about 4 years. My math says it will take about 3.5 years but there will be growing pains and I learn the hard way.

What is your projected ROI?
Depending on financing were thinking between 18 and 24%. The biggest factor is whether we can get 100% financing on the new equipment.

What services do you plan to offer?
Currently there are no services offered beside the laundromat. There are high end apartments all around I plan on offering a pickup and drop off service. There are also plenty of hotels in town without many laundromats. We will also offer drop off and pick up to them for linens.

[MarkS]

Hello Ronald,
I am curious as to how you are financing the acquisition portion of the deal. I see you are looking to put down 30% but I am wondering how the other 70% will be financed.

[Author]

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