May 26, 2020 at 3:35 am #1643AnneMarie GillanParticipant
I’m new to all of this, but I was wondering how I know if a laundromat is a good deal or not. It’s so hard to tell sometimes. Are there certain things I should be looking for? Thank you!
May 28, 2020 at 1:02 pm #1672Jordan BerryKeymaster
Awesome question AnneMarie!
With laundromats, it’s all about the numbers. I always tell people you need to look at 4 things to make sure a laundromat is a good deal.
1. The amount of money coming in
2. The amount of money going out
3. The likelihood that the business will continue to do just as well, if not better than it’s currently doing
4. Are there ways that you can improve the business and bring in more revenue and/or reduce expenses?
Hope that helps!
June 4, 2020 at 12:46 pm #1718
I hope this isn’t a thread hijack. To me they are related.
What was the multiple you mentioned laundromats generally sell at? How does the condition and equipment in place impact the price? I’m interested in buying a laundromat?
I did reach out to the owner of the one closest to me and have not received a reply yet. I have a couple of sites in mind I think would make good locations for laundromats, but these would be ground up builds. Where can I find more info on building and designing a laundromat?
I’ve heard of retrofitting a building, and I’m open to that but wonder how difficult that would be given the utility situation ie high capacity gas, water and drainage lines? Maybe it’s not that big of a deal?
June 4, 2020 at 1:35 pm #1726Jordan BerryKeymaster
All awesome questions! Here’s my input on them.
Laundromats typically are selling at a 3.5-5 multiple of NOI right now. The higher end of the multiple are laundromats that have newer equipment, solid cash flow, established systems, great locations, etc. The lower end are laundromats that have older equipment, need some work, aren’t running optimally, etc.
I don’t know of any great sources of building and designing a laundromat (yet :)). The place to go to ask would be a distributor, probably. They can help with the layout and equipment mix.
Retrofitting a building is definitely possible, but there are complications, such as some of the ones you mentioned. It can be done as long as the landlord signs off, but it can get expensive. The numbers just need to make sense.
Hope that helps some!
June 4, 2020 at 2:14 pm #1727
Thank you Jordan. I appreciate all you do for the industry. I’ve been soaking in all the podcast and everything I can learn as I try to find one to buy. I think this would be the smart way to go (buy then build) to learn a bit as I go, but I’m open to starting off with a build with some good mentorship to help me out!
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