Potential Purchase of Laundromat

[John Diggers]

Can anyone offer feedback on the below potential off-market purchase for an unattended laundromat for sale? Any holes or concerns? How do I know if I have a really good deal or a so-so deal with delayed retooling of aged machines. Other broker listed laundromats in the area are listed for about 95k, with about 100k revenue and 35-37k cashflow. I see risks with having to replace many of the machines in the near future and end of lease that could lead to increase lease costs for the 5 year lease options. Feedback appreciated!

Asking Price: $75,000
Proforma Cashflow: $35,000/year
Acquisition: 25% down owner finance ($18,750 with 7% interest for 15 year loan) or all cash purchase (not yet negotiated offer)
Town in Maryland- 1 hour outside of DC
Town Population ~30,000
Pre-analysis Scorecard: 25 (Result: worth Further review)
Seller: retiring after 16 years. growing old and bad back.

1400 Sq foot Laundromat in Strip mall (leased. year 3 of 5 year lease. With 5 year lease option renewals expected. Owners have been in operation 16 years)
Anchor tenant: Grocery store
other neighboring smaller stores: take out shops, pawn shop, nail spa, Tax place, laundromat next to pawn shop

Laundromat:
22 washers
20 dryers
(all 20 year old wascomats)
(two of the larger 40 lb washers are non-repairable, and 2 are out of order but fixable)

Currently unattended. Owners unlock and lock daily 9-830pm operations. Coin-Op

Proforma income (calculated, not owner provided):
Assumption: 20 washers and dryers are in operation
3 turns a day
$9300/month Revenue

Value-add proposal:
-replace 2 non-fixable machines with 30 or 40 lb washers: monthly revenue increase to $10,300 ($1000 increase)
-Renovated dated interior (retrofit lighting fixtures to LED, paint walls and washer stands)
-Add Payrange dongles and convert entire facility to Pay by app (credit card or google/Apple pay enabled)
-Remove coin hoppers. Facility entirely coin free.
-Retool with replacing 10-16 of the 20 year old machines (potential once stabilized)

Post ownership plan:
-Unattended during the day
-part-time employees to open and close daily, perform daily checklist (lint traps, sweep, light cleaning of machines, lockup)
-consider full-time employee with wash and fold services once stabilized after 2-3 months. Look for other leased vended machines refilled by vending route (profit sharing).

Any holes or concerns? How do I know if I have a really good deal or a so-so deal with delayed retooling of aged machines.

• This topic was modified 9 months, 3 weeks ago by Alvin Espino.

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