Prime Capital’s Chris Michalek delves deep into the world of laundromat financing in today’s show. Chris answers a ton of questions about financing a laundromat purchase and laundry equipment retools. He holds nothing back.
Chris Money, as he’s also known, highlights some of your main questions about laundromat financing, including the following, and more:
- What do lenders need from you to start the lending process?
- How do you create a winning business plan to ensure your business will succeed?
- What is the entire loan process, step-by-step?
- How has the recent pandemic changed the lending atmosphere?
- How can sellers best prep their laundromat in a way that buyers can get financing?
- What states does Prime Capital lend in?
- And so many more!
Chris truly comes with the laundry owner’s best interest first in this no holds barred interview. He answers every question he is asked and answers with an obvious expertise and passion for helping laundromat owners and investors find financial freedom through laundromat ownership!
Grab a pen and paper or note-taking device because you’re going to want to take good notes on this one!
Listen To The Podcast Here
Watch The Podcast Here
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Links from the show
- Laundromat Investor Resources
- Join Laundromat Resource
- Laundromat Resource Forums
- Laundromat Resource Blog
- Be a guest on the podcast!
- Sell your laundromat
- Laundromat Resource Coaching
- Podcast Episode with Dave “Laundromat Millionaire” Menz
- Podcast Episode with Luke Williford
Connect with Chris
Prime Capital Facebook Page
https://www.goprimecap.com/
Phone- (630) 884-8900
Join The Laundromat Resource Community!
Episode Transcript
hey hey what’s up guys it’s jordan with
the laundromat resource podcast this is
show number
24 i believe 24 and i
am pumped today but before i tell you
about today because today is an
incredible
incredible show i just for those of you
guys who may
follow along with us and might be
listening to this real time as they come
out
you may have noticed that we didn’t have
an episode last week and i just want to
give you a little heads up as to why
that was that will not be a regular
occurrence
i’m very committed to getting these
things out on time however
right now i’m running this whole show
off my laptop and i dropped it
and i could not get an episode out i
tried a bunch of different things to
scramble to get it out and it just
wasn’t going to happen
and i contemplated putting out a shorter
episode from my phone or something like
that and you know what i just decided
i’m just going to wait i don’t want to
have a rushed last minute podcast
episode
waste your time um and so
i just decided to not do it so that’s
why there wasn’t an episode don’t get
used to it because we’ll be out here in
fact
we already have a couple a few of them
lined up here
um ready to go and i don’t plan on
dropping this
laptop anymore um but
i would love to line up even more and
get even more
ahead that way we can just crank these
suckers out uh
on time every week just so you know it’s
like clockwork the way it’s been
up until this last week um and again not
plan on letting that happen again
but if you’re interested in being on the
podcast this is an awesome opportunity
for you
laundromat resource dot com slash
podcast
guest laundromat resource dot com slash
podcast
guest the link for that will be in the
show notes
um and in the description if you’re
watching this on youtube down below
um uh show notes you can find at
laundromat resource dot com slash show
24
um that’ll have links to everything we
talk about in the show
today and uh just some extra goodies uh
from today’s show so make sure you check
that out
um but yeah lottomyresource.com podcast
guest if you want to come be a
guest on the podcast tell us a little
bit about your story
of owning laundromats we want to hear it
we want to hear how you got into the
business what it’s been like for you
what lessons you’ve learned what wisdom
you have to share with us
and uh man i get a lot of people who are
like i’m not sure if my story it’s not a
big deal
we still want to hear it because you
know what it’s always a big deal
if you’ve gone out and you’ve bought a
laundromat it’s a big deal
and there’s uh something really cool
about that so
get over there aladdin resource.com
podcast guest let’s get you on
my goal is to let you have a great time
telling your story
we have a lot of fun on here and i hope
that comes through
uh in the episodes um today’s by the way
is incredible i do a lot of coaching
and consulting for people who own
laundromats
and people who want to buy their first
laundromat i do a ton of that stuff
every week
almost every day i’m doing at least one
or two coaching calls
a day which is at londonmyresource.com
coaching if you’re interested
there’s a free call you can sign up for
um if you’re looking for something a
little more in-depth there’s some
options for that too
but one of the biggest questions i get
on these coaching calls both from
existing owners
and from uh newbies who are trying to
get into the business
is about financing and that is
huge because one of the biggest barriers
to entry in this industry
is the money the cost to get in so
i thought man let’s get this thing
answered i’m gonna bring in
somebody who just knows his stuff and so
i brought
chris maholick also known as chris money
he’ll tell you
and the reason for that is he’s with
he’s with prime capital if you haven’t
heard
of him or of prime capital before they
finance laundromats that’s what he does
and so i wanted to bring somebody in who
knows financing and
in particular knows laundromat financing
chris was the man to do it
he came on he is killer he did some
amazing amazing uh stuff in this episode
he’s sharing
great information so if you have
questions about financing
this is the show for you whether you’re
buying a new location
whether you are buying new equipment
this this show is going to have a ton of
value so make sure you go get a notepad
a pencil of paper uh if that is even
like a thing anymore
or you know open up evernote or your
notes app or whatever
some way to take some notes if you’re in
the car you’re exercising take some good
mental notes or listen to this again
when you can write some stuff down
because
chris just really brings a ton of good
information
and what i love about chris’s business
model is he really tries to align
his interests with our interests as as
business owners
and he knows that if we make money
buying laundromats he’s gonna make money
too
and we’re all gonna win um and i love
that and that comes through
crystal clear in this episode so make
sure you stay tuned
because we’re about to jump into that
but before we do real quick i gotta say
a huge
welcome to uh brian daniel and glenn
and all the rest who are brand new to
uh to this community the laundromat
resource community
these guys came in introduced themselves
in the introductions forum
and are just excited to be here so if
you haven’t done that yet
go to laundromat resource.com forums
again all the links are in the
description
or the show notes laundromat
resource.com forums
click on the introductions forum and let
people know who you are
tell them where you’re at in your in
your uh
laundromat journey do you own one are
you looking to own one do you own
you know 37 and you’re rivaling luke
williford
um show number 10 check that one out if
you haven’t yet
but wherever you’re at in the journey go
introduce yourself because that’s where
you’re going to start to build the
community
and once you are part of this community
you start building your network
that’s where success is really going to
ramp up get that hockey stick growth
where
you know things are just going to get a
lot better for you when we’re working
together so
man go do that introductions forum and
real quick while we’re talking about the
forums i’m not going to highlight any
new forum posts because there’s
always new forum posts kind of going in
over there
about laundromats about financing about
commercial real estate
go check those out learnmyresource.com
forums but i just wanted to highlight
there’s some really cool discussions
going right now
on pos systems on whether
or not you should add tokens because of
this coin shortage
debacle that’s happening right now um
and
so the the token question for all you
coin store owners
that’s happening over there at base
payment stuff
is uh that conversation is happening and
i think that’s a huge one right now as a
lot of people are considering going
that direction um and also uh
ronald’s asked me anything is still
cruising man people have questions for
ronald and
ronald dude you’re doing some awesome
stuff i love that ask me anything
uh posts that you made and i want to see
some more of those from some more of you
guys so go check those out
go jump into those conversations again
it’s in the midst of those conversations
that we’re gonna find growth so
go over there a lot of my resource dot
com forums jump in every week
i want you asking a question and i want
you uh
answering a question or contributing to
a discussion uh
over there because again that is where
we’re all gonna grow more
doesn’t just benefit you although it
will benefit you but it’s going to
benefit the whole community
so head over to the forums ask a
question
answer a question every single week and
you know if
if if you’re not doing it then i’m going
to have to like
record a rap song about
asking a question and answering the
question i’m gonna make you listen to it
on the podcast and it will not be pretty
so
i didn’t want to have to go there but
that’s a threat that’s a direct threat
all right nevermind okay um hey you know
what i i’m just so excited about this
episode chris
money bringing it about laundromat
financing
after this let’s jump right into it
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[Music]
chris thank you for coming on i am super
excited you’re here i appreciate it man
thank you jordan me too yeah i mean i
get
asked all the time i do like a lot of
coaching and i talk to a lot of owners
and a lot of people who want to be
owners and i get asked
all the time about financing and
met you ran into you and was like i
gotta have this guy on
uh we had one phone conversation
supposed to be like five minutes and
we talked forever and we did so i’m yeah
so i’m pretty excited
you are chock full of wisdom and uh i
think you got a lot to offer
uh these guys but but but before we get
there um because we will get there
tell us a little bit about yourself
where are you located and what’s your
background and some relevant facts about
you
sure sure i went to uh university of
illinois got a
bachelor’s degree in management
information systems so my background
originally was technology
right so of course when i walk into
these locations i love looking at the
technology the card systems everything
else
but morphed into finance i had uh not
necessarily a minor in economics in
college but i took all the classes to be
able to
get a secondary degree so that morphed
into
getting into the financing industry
ultimately and
laundry was one of those things that at
a previous organization i got
introduced to and ultimately over the
past
15 years i’ve been doing laundry
financing for entrepreneurs
more or less specializing in consulting
and helping these folks uh
start out in the business right because
if they start out in the business and
they don’t hit a home run with the first
location but done it’s over
so my background really is uh helping
folks
uh with money getting them money from
our investor
and also one of our niches at prime is
that we use our own money as well
to help these entrepreneurs put
transactions together especially in the
more challenging scenarios
so it is in my best interest to make
sure these people succeed
so i have been only doing on the
financing front
laundry financing uh for the last 15
years so it’s uh it’s really a nice
niche uh reception resistant type of a
business
and if done you know you do all your due
diligence up front i mean really it’s
we visit the locations and we do
everything we can to make sure that
these folks hit a home run in the first
and then obviously the goal is to
continuously expand with multiple
locations
um so you know like i said in addition
to getting the money for these folks to
be able to get into the business
it’s really consultative guidance as
well and did you think of this type of
scenario
so that’s where we are so prime capital
was formed in 2014
uh i am the 100 owner of the business so
i have a vested interest to make sure
that it succeeds and all of our
customers succeed
yeah you do yeah you do well i love that
and i i love the
uh consulting angle to it and i tell
people all the time like
hey if you find a good lender who
knows the industry they’re actually
going to be a really good
set of eyes on your deals because
they have their interests are aligned
with yours and so finding somebody like
you
who knows the industry who um but is
coming from a consulting angle
is i mean that’s like gold that’s like
finding gold when i first got into the
industry
i did not hit a home run i struck out
real bad
and it’s it’s tough man i tell people
all the time like hey
you get in get in right because if you
get in right
your options are limitless you’re going
to the moon but if you get in wrong it’s
really really hard to recover
from that so having somebody on your
team like you
to come in and not only help with the
financing aspect of it but also
somebody who knows the industry who’s
seen lots of deals who knows how to
um you know make sure these things are
successful is
invaluable so yeah no and one of the
individuals that was on your second
podcast
is dave menz who is out there as the
laundromat millionaire out there you
know and right
and we were one of the folks that helped
dave originally trying to get him into
the business and uh you know multiple
store owner now
looking to help people out he’s one of
the advocates for the business and can’t
say enough good things about dave
but if dave didn’t start out on the
right foot with the right location up
front
it wouldn’t happen so um you know also
too it’s kind of funny like
we were talking earlier jordan about
names you know my name is chris maholick
one of the things like dave calls
himself the laundromat millionaire out
there and markets himself as that
there are some folks that call me chris
money too so if the name is too too
challenging
just say let’s touch base with chris
money chris money i like that
here’s what it needs to be it needs to
be chris money with prime
capital making millionaires there you go
baby man that’s what you’re doing trying
our darndest you know trying our darkest
yeah i love that i love that yeah man i
mean
if you first of all if you haven’t
listened to dave’s episode
uh you got you need to go
laudermatresource.com
show to you have to go listen to it it
is
one of if not the most loved episodes
of uh you know of everything and then go
check out his youtube you got a youtube
channel
uh and just search laundromat
millionaire and you’ll check him out
there
he’s got a ton of great content he is
doing some awesome awesome things and
he’s an awesome guy to boot yep make
sure you check him out
um and let’s i mean let’s talk to the
man who made dave i mean the laundromat
millionaire
you’re the man who made them so i’m
giving you all the credit
i’ll tell you what dave dave work hard
for everything he has right we just
assisted him along the way and we
believe in what he was i mean guys
former lineman right for years and and
all of a sudden says he wants to get
into this business and
and that’s the passion that somebody
like dave has i would say to your
listeners out here
that’s what we’re looking for okay if
you’re somebody that says hey i want to
get into the business because i’ve heard
a lot of good things about laundry
that’s a great start
right but dave’s passion when you meet
with him and you see him and the way he
talks on the forums and the way he talks
about people that he’s met
and his ideas maybe he doesn’t hit a
home run every single time but his ideas
he’s just
he’s a wealth of ideas right so as an
investor you want to see that right you
don’t want somebody that just thinks
that they’re just going to get into the
business and sit back and make money
right it’s all about growing and
crushing the competition
right and that’s that’s dave and there’s
a lot of other folks like that that are
out there in the business as well that
are just like him so it’s
he’s just one example but but that’s
what we really like we love the passion
we love the ambition
yeah i i love that too and i
uh well hey okay enough would date i
mean dave
yeah awesome so let’s yeah he’s gonna
get a big head
because i know
all right well let’s talk financing
right okay
so i get asked all the time you know all
kinds of questions about financing so
let’s
let’s talk about it a little bit um what
do what do people need to know if
they’re looking for
financing for a laundromat i know that
there can be
a lot of challenges in financing
laundromats for various reasons
so what do people need to know upfront
about financing a laundromat
sure i think one of the biggest
misperceptions about financing in the
laundry industry is that if somebody has
good credit if they have a 700 credit
score or an 800 credit score they think
they can just get right in and they
qualify for financing
well anybody that gets into the business
is going to understand right away
that yes that is a very important part
okay
bringing cash to the table is also
another very important part because as
an investor
you don’t want to see somebody say hey
how can i get the most amount of
financing possible
right if you believe in the project and
we collectively say hey it’s a great
idea
we want to see at least some level of
skin in the game okay so liquid assets
are very important
need to be brought to the table
additionally
the financing process is holistically
a package of the credit of the
individuals
as well as the project itself so for
example if you’re going to buy a
location
that is a major part of the overall
financing package it’s just not a
i have good credit i have some money
i’ve heard that this is a good
investment
it’s hey let’s dive into this location
or locations
and see what the pros and the cons are
of these locations right
so you know there’s there’s a lot of
things that go along with that as well
when we
when we go with entrepreneurs and we’re
working with them to
to dive into this whole credit process
right
it’s very important that we understand
all of the financials that have come in
from the
existing owners and too many times i’ve
heard that the owners are selling
because they want to spend more time
with their grandkids
okay that’s normally not the case
um you know it could be it could be a
contributing factor
but there’s something else going on so
what is the big unknown so that’s our
job so
i i think you know from an investor that
comes into the business it’s not just
let me send you some bank statements let
me send you some tax returns let me send
you
you know a personal financial statement
an application it’s
hey chris i’ve got a possibility in a
location here
that really does very well here are the
numbers it’s making x number of dollars
per year
let’s get into it and that’s the
beginning of the process
jordan okay that is not the the end like
all sounds great let’s go ahead and get
you some money
all right um i would also suggest to
investors one of the biggest challenges
is when you think you want to get into
the business is that you want to fall in
love with the first location
that you see right away and most times
the first location
uh you’re going to learn the most about
your due diligence and you’re going to
learn
so much about the business as a whole
just through going through that due
diligence process
um so again it’s it’s sometimes
challenging for investors that get in
because they really think that they you
know they want to fall in love with
something
but i’ll give you a perfect example of
that right there with kovid i mean
we’ve had a lot of customers that you
would think
would never have slowed down on payments
right
you know college town laundromats for
examples i mean look what happened that
that
fully changed everything you know and
you would think oh my gosh i mean
colleges are gold mines um i mean that’s
just one example jordan but i think that
the
the perception that you’re just gonna
send in some financial information
that’s really the start of the process
really we dive in with you with the
investors with the entrepreneurs to say
hey
let’s educate you on this let’s look at
the numbers
let’s ask the seller some serious
questions and let’s see if we can make
it happen
so uh so i would say that those are a
couple of things off the bat that uh you
know should be known to any investor
that wants to get in and again
we have the same level of passion to
make sure they’re successful
we don’t want to say no we don’t want to
say no because if we say no there’s no
money for us to be made
right we want to say yes so i think
those are a couple of things that stick
out right off the top of my head
yeah but you want to say yes to the
right deal right you want to say yes to
something that’s going to do
you know that’s going to be a positive
for the owner because
again you want to make money so if you
say yes to the wrong deal
then you’re not making money the owner’s
not making money nobody wins
and it’s just not a good situation and
that’s what i like about it that you’re
you’re you’re aligned in what you’re
looking for
in that way yep so you have not
particularly our partners
yeah appreciate that that’s exactly what
we’re looking for we’re looking to make
you know laundromat millionaires out
there i mean that’s really what we’re
trying to do i mean we’re
trying to get people so they can grow
their businesses that’s it
yeah yeah well let me ask you this
question i need to take you back just
for a second because i get asked this
all the time you know people start
looking for uh laundromats to buy
and i mean i really like what you said
about uh
not necessarily jumping on the first
deal because man i
i can’t tell you how many people get
emotionally invested
in that first deal it’s exciting it’s a
little bit scary
but they’re all wrapped up in it and and
it can cause you to make a really bad
decision
and so don’t get wrapped up in it i love
what you said there
but when’s a good point in the process
for somebody to reach out and talk to
you uh about financing do they need to
have
a location in mind do you
tell tell me about that when should they
return to you right away
again we’re partners here and if they’re
going to establish a long-term
relationship with us
and or others you know that are
financiers in the business you know they
want to do so right away
so we can talk to them and look at their
level of work that they have you know on
paper in terms of dollars and cents
talk about their business mindset talk
about are they going to be super engaged
in the business meaning do they plan to
keep their existing full-time jobs if
they have them or not
um you know and come up with some level
of a high-level business plan of what
they’re looking to do
but absolutely i mean we want them to
get engaged with us right away
we want to understand their mindset and
we can obviously look at some of these
locations which some are attended some
are
not attended and cater some of these
locations and understand what they’re
looking for
to the different people that are looking
for them right
so not every location i mean a location
that may be for sale may not be for
everybody regardless of whether the
numbers make sense or not right
and that’s something i think that’s
that’s uh to be understood as well
but we’d like to get them engaged right
away understand what their long-term
vision is for sustainability in the
business
understand whether they want multiple
stores one store five store what
are they looking for right why they want
to get in right i don’t want to hear
that they’re sitting back and
let’s just collect collect the cash
right why do you really want to get in
and what do you what is going to be your
differentiator so
helping craft those ideas with the
entrepreneurs that are thinking about
getting into the business even before
they approach a business broker to look
at a location
i think it’s very important yeah i think
that’s
huge and i think i think you’re like
absolutely right about
that why question right that why
question is key
not just for you as a lender because you
want to see that they’re going to be
you know investing in their business in
the way that you’re investing not just
financially but also
you know with their time and their
energy but it’s also important for them
to understand
why i mean because it’s a big commitment
right like laundromats are not cheap
even the cheap ones are not
cheap you know and um so
having that why pinned down is
i mean that’s huge i like well
especially in california jordan i mean
the the multipliers
and what i mean for the new investors
that are listening to this
you know the multipliers on like a net
income scenario in california
you know can be five six times if not
even more um
you know because it’s so challenging to
try to build new locations out in
california right
yeah um so it’s it’s understanding these
locations too and helping these folks
out right off the bat
um so that’s what we’re looking to do
just be partners moving forward
good well i mean let me ask you this do
you
do you okay say somebody’s wanting to
get
into their first laundromat i mean it
can be kind of intimidating to
come to a lender and say i’ve never done
this before
i mean do you work with new
new business owners people absolutely
don’t have any experience
absolutely absolutely that’s we’ve given
some uh you know presentations to
various cla investment groups
over the years we’re actually sponsoring
a couple cla seminars between now
and the end of the year so uh we’re a
manufactured member the coin laundry
association have been like i said since
prime’s incorporation in 2014
but yeah we’re absolutely all about
helping folks out so
if folks have questions contact us talk
to us
run locations past us um you know we we
love going through the scenarios and
again for the for the business brokers
too that may be listening out there
we’re looking to try to make a deal
happen
right we don’t want to try to say no but
sometimes some of the brokers in the
business don’t get all the information
from the sellers
right so so we ask some of those
questions that maybe are not brought out
up front so something in a business
broker package that may not be there
up front is how old is the roof right
you know something that may not be
documented is hey it’s a 20 year lease
remaining or 20 years of options
remaining
it’s important that we uh you know have
or try to avoid a triple net lease even
though it’s very challenging to do in
some scenarios right so but but
even if they’re going to get into a
triple note piece explain to them what
that means right
and understand the cash flows before
they get into that so uh hvac units as
well you know in california i mean it’s
super expensive especially the bigger
stores
yeah um you know when we walk into these
locations you got to look up the ceiling
you know even if it looks brand new
you know ask the questions so that’s
what we help these folks out with the
unexpected expenditures up front or
things that may not be on those original
packages that are put together
and we’re just asking for them just
because we like to do the due diligence
right
but we say get get with us new investors
absolutely we educate you on the
business
from our point of view right um you know
there’s always multiple points of view
but we love educating you because again
it’s all about developing partnerships
yeah i i mean that’s awesome i i like
i like your philosophy about how you’re
approaching
lending uh you know because it can be
such a cold industry it can be you know
just looking at hard numbers
and not it you know that personal touch
can be left out of it so often
right um but but bringing that personal
touch back in
and you know and doing it in such a way
where you’re
you know you’re looking out for these
laundry owners
um not only benefits them but it’s gonna
benefit you and your company in the long
term so
100 and i think that is the biggest
thing here right and
there’s other lenders that are in the
business just like us right it’s
you have to find who you work best with
right
and you know i’m not out there trying to
like i said
not make deals happen but again i’m the
advocate
for the seller i’m the advocate for the
buyer we’re trying to figure something
out here
sometimes i’ll look at the numbers and
i’ll say this is what i think the the
for sale price should be at the location
based on the sizes of the equipment
uh based on the ages of the equipment
based on the overall package again
and these are just some of the things
that we just talked with these these
owners looking to get into the business
about right
um so again just building that rapport
with folks um
and that’s that’s it yeah well
okay so let’s go back to that new newbie
here
and who’s wanting to get into the
industry um
who wants to give you caller or any
lender right a call
and um and kind of start that
conversation
is is there anything that they should be
doing
or anything they should have kind of in
front of them or have ready for you
that would kind of help give you a good
idea of how you can help them
any any prep work that they should be
doing
well it’s always important to uh you
know look
look at why you want to get into the
laundromat business right and understand
what what are you really looking to do i
mean there’s certain people that get
into the business that really want to
focus on the vending locations right
what i mean by the vend they want to
focus on the on-site experience right
so you know thinking about the business
plan and how you’re going to make money
and differentiate
based on your experiences in other
laundromats i think is the number one
issue
right you know up a delivery especially
with covent
that is massive right spacing in
laundromat locations is going to be a
big thing that we’re going to be talking
about in 20 you know 2021 here because
these tight spots you’re not going to be
having people that are going to pack
these laundromats anymore like they have
in the past it’s not going to happen
yeah right so so you know what what are
you going to bring to the table
uh like i said maybe maybe drop off
service okay that that is not in this
particular area what have you studied in
these areas that you think you could
bring
to the table pick up and delivery
spacing in locations i i think that that
entrepreneurs should be thinking about
hey i’ve observed this in other
laundromat locations okay
and i think that this is something that
if we did this a little bit differently
i could make you know a an argument to
have these folks come over to my
location
right because the idea jordan really is
to crush the competition okay i mean
when you go into the business
you want to put everybody around you out
of business right so how are you going
to do that so
you may get a sheet from a business
broker and look at it and you may say
hey this looks like a great deal
right but what you may not know is
there’s a you know 10 000 square foot
laundromat that’s getting ready to be
built across the street from you when
you buy that location
right and that’s yeah that’s that’s
that’s a big thing
right where were you no no no no i
needed you on my team
i’m not tarnac but that’s no jordan
that’s where we’re going right
it’s it’s these smaller locations that
are getting
crushed right i mean you get the big
spacious locations that go and
especially out in california
um and there are slews of laundromats i
mean there’s
the same thing like in in florida right
i mean there’s a lot there’s sometimes
in like southeast florida i mean there’s
a laundromat and
three of the four intersections right so
if so
and say they’re each fifteen hundred two
thousand square foot you put the eight
thousand square foot location in
you know right around the corner it’s
over so
i would just think that you know for
folks that want to get in
yes compile your your personal
information your financial information
together
but also think of a plan what are you
going to
do to put others out of business
i mean it sounds cutthroat but that is
the game here
um you know and covet introduces so many
different things you know into the new
equation here that uh
um some of the things we haven’t even
thought of yet so
just think through your business plan
and what really makes you happy and what
you think you’re going to do to be able
to put others out of business
i love that i mean i love coming in with
with a plan and
you know obviously you don’t have to
have that plan perfectly formulated you
know before you give a lender a call but
beginning that conversation uh
you know with yourself or business
partners or you know whoever kind you’re
working with
um it’s gonna go a long way to help you
and
uh you know we
uh we you know we put out a little
resource and there’s tons of stuff out
there like this but just like
we call it a value-add checklist but
basically like how can you
improve that business in a way that it’s
going to attract more customers
and expand your business whether that be
adding like a pickup and delivery or a
drop-off service
or uh or smaller things or bigger things
that
um don’t necessarily drive the bottom
line directly
but you know as in like improving your
store
you know getting new machines in there
getting new
flooring in there even the flooring you
know it’s funny jordan it’s funny you
say that so
one of my pet peeves going into a
laundromat okay that’s
again because we’re investing our own
money into these transactions okay
we walk into these locations and the
first thing i try to do is open the door
and the door doesn’t open the way that i
want to
so i’m standing there watching folks
trying to butt up into the door with
their laundry carts and the door doesn’t
open the right way okay i got to pull it
open
you know having the door that swings
both ways is something simple
okay that people aren’t at the sliders
like you talk about the intangibles too
like the sliders
i mean sliders are expensive there’s no
doubt about it
um but hugely you know beneficial
potentially
um you know we even talk about locations
that don’t have air conditioning right i
mean there’s plenty of locations that
don’t have it you know have the doors
open
simple things like air conditioning make
all the difference so again to your
point it’s not necessarily thinking
through this
holistic business plan up front but the
little things that could potentially
make the difference
in getting people to come into your
locations i mean we go in too i mean we
have some
some entrepreneurs that have contests
okay um
you know free bike giveaways every week
so they put the bikes on the top of the
washers and the dryers right
um you know the the loyalty on the uh on
the card systems right
um especially with coven something else
for your listeners to think through we
thought dollar coin was going to be this
massive hit
dollar coin’s still good right but we’re
seeing a major push over to card systems
because of covid now
right yeah uh and especially with the
change shortages that are happening
throughout the us so i mean geez
little things like how are you gonna
make the experience fun in the location
and to your point jordan it’s not
necessarily in our opinion about the
bigger machines or the
uh you know smaller machines or whatever
it might be not maybe not necessarily
the big things
but it’s about how do you create the
experience for the customers that
they’re not getting in the other
locations right now
yeah and i think that’s the key right
put yourself in the in the shoes
of the mom with three kids who has to do
you know laundry while they’re i don’t
know if you’ve ever tried to go to a
laundromat with kids man i
i bring my kids a little under mats
sometimes and even
oh my gosh even me i’m like jeez you
know but thinking through okay what’s
that experience like for that mom
or you know if you’re in a college town
what’s it like for that that kid who has
midterms coming up who you know has got
to do their laundry but
it’s also got a study or you know
whatever the situation might be putting
yourself in the customer’s shoes
and and really going through that whole
process yourself as that customer what
is it like to open the door what is it
like to find a parking spot
you know what is it like to transport
clothes from the car to
to the lawn going through all of that
and those little
tiny tweaks will make a big difference
yup and especially from a financing
standpoint too since this really is all
about financing and educating your
listeners about the financing process
a big part of it really is the location
itself
that is in what we think about it
collectively after we collectively do
due diligence on it
does the project make sense so i think
that the focus
in my opinion as it relates to the
financing process for new
entrepreneurs that get into the business
is really is this going to be a success
for you let’s do
everything we possibly can to help
ensure that it is
up front otherwise you walk away and you
don’t do it you go to the next one
again getting back to the hole don’t
fall in love with the project right off
the you know the first one out of the
gate
but but the due diligence on the
location jordan i can’t stress it enough
there’s a major part of the financing
process it’s also a fun part
right because sometimes you’re gonna
find hey man this really this really is
a great deal you know let’s do it this
really makes sense for me um and then
again sometimes it may not work out
right
yeah yeah well are there i mean you’ve
already mentioned like a bunch of things
um are there you know as as people start
looking for
laundromats to buy are there things that
you’re going to be looking for in a
location that they should be looking for
in a location in particular i mean i
know there’s a lot of
things are there any big ones maybe that
can that can help a location well i love
size
i love size right i mean clearly we you
know as investors we want
the bigger locations right because they
are barriers to entry
right and especially out in a state like
california and florida
trying to put together a large project
six seven
eight thousand square foot location
uh and thinking you’re gonna charge a
dollar fifty vend and a bunch of twenty
pounders it’s just
it’s gonna be challenging to try to do
right so um
we like bigger stores right we also do
like smaller stores though too because
in some of these areas you’re just not
going to be able to put
any locations in at all okay so what
should they be thinking about really i
mean the love for laundry is the first
thing the second thing is just thinking
to themselves hey
who could possibly move into this
location right
so so rather than getting like a a
checklist of information from a
a business broker that has a location
for sale you have to go visit the
locations right
so if somebody’s thinking about getting
in and saying hey what are the big
things
go to the actual location right observe
the customers
ask questions right go in and ask the
customers how they like the experience
then go into the other locations that
are the direct competitors for these
stores
and ask them what they think about you
know what would they like to see what do
they like what do they don’t like
um you know and ask the questions of the
customers
they’ll answer you know and and if
you’re hesitant to want to do that
then maybe this isn’t the right business
for you because again it has to do with
the engagement and how engaged you are
in the business
that’s in my opinion going to determine
a lot of the success
so so having a willingness to go ask
those maybe tougher questions of folks
when you walk in locations i think i
think that’s really key
especially uh uh for a location you’re
thinking about buying i think that’s
that’s
very important yeah that’s good advice
that’s good advice
well can you can you talk me through i
mean i know there’s a lot of
little things that go through so maybe
you know broad strokes but can you talk
me through
um the process of kind of what it looks
like
going through from initial conversation
with you
through you know funding funding alone
closing
closing the deal sure so let’s just talk
about a straight up
yeah let’s just talk a straight up
acquisition for a new
entrepreneur thinking about getting into
the business right so we have an initial
contribution and the first thing that
we’re going to talk to them about is
we’re going to say we need full
financial disclosure
okay and what i mean by that is we’d
like a credit application
a personal financial statement last two
years of personal tax returns
we also want to understand if they’re a
previous business owner maybe in this
particular business maybe not
okay we love entrepreneurs that want to
get into business that have some level
of
accounting expertise right so they know
the numbers a little bit or have some
kind of an idea of the numbers
of what they’re looking for um but we’ll
just talk to them up too about a cash
contribution
into the business and it varies right so
there’s sba lending that exists out
there
for startups it’s certainly challenging
to try to get an sba type of a lending
scenario
it does require the least amount of
money in to the business
uh some of these sba lenders that exist
out there
are looking at 10 to 15 in okay
on a startup scenario certainly
challenging because the sba lending
they’re most concerned with the building
so if you’re looking for
a laundromat with a standalone building
you know i would actually suggest that
sba financing through us through
somebody else
would be a way that that you could get
something done like i said the sba is
most concerned with the building and the
build-outs of the building or
leasehold improvements but we’ll talk
about their financial scenario
uh we’ll explain to them if they’re a
new owner we’re looking
especially after coving because kova did
change things
off the bat new owners that want to get
in straight up with traditional
financing are looking at some level of a
30
to 40 percent contribution into the
project
up front right so if they’re willing to
put
you know a level of money into the
project up front they’re a candidate
to talk to us right um again we’re going
to guide them through
help them understand the different
locations that they’re going to bring to
the table
and do our best to make sure that
they’re success right
so we have these conversations with them
we also try to educate them as much as
possible so
our entrepreneurs that come to us jordan
you know they may come to us with
five six seven eight different locations
as possibilities before
we pull the trigger on one or we may
never pull the trigger on one or they
think about getting into a different
business
because they’re discouraged because they
haven’t found a location yet
and yeah that can be frustrating but the
process really at that point is we’re
getting all the
the financial information from the
customers we’re getting all the
financial information from the sellers
we’re compiling the package as a whole
and what we’re doing is we’re putting a
value
in our opinion based on the competition
in the business
or in that particular location the age
of the machines
the ability of it to make money if
there’s any improvements in terms of
additional new equipment that’s going to
be going in
leaseholds that are going in we’ll put a
value of what we think is
fair on that store based on what our
evaluation is based on the information
submitted right
at that point we go into our loan
committee we go into underwriting
ultimately and we say
here’s what we have here’s why we think
this is a winner type of a transaction
we suggest that this thing move forward
and then we get to a yes or no answer
at that point we can go back to the
business broker or the owner that has a
location for sale
and solidify the purchase agreement and
ultimately work toward
finalizing uh you know funding you know
where there’s money put into an escrow
account
and the owner gets paid uh to get out of
that particular location so
it’s not a very complex process i should
say
i don’t want to make it seem complex but
the most complex portion of it
really is the due diligence that’s done
on the actual locations themselves to
try to make sure that we’re hitting a
home run
yeah thank you for walking through that
i think for a lot of people it’s
intimidating because they don’t really
know the process up front and you’re
kind of
taking one step at a time but it can
feel very overwhelming because
of course if you don’t know the big
picture of where you’re going how you’re
going to get there and
so i think it’s super helpful to kind of
have a have a general understanding of
what’s going to happen when i apply for
this loan
um because there’s something else
there’s something else to talk about too
jordan about credit
right and we’ve had some folks that have
approached us in the past that think
that they may not qualify
just because they don’t think their
credit score is high enough right
well we’ve seen it where there’s a 200
medical collection on a credit bureau
that could cause a score to go down 50
points right i mean there’s a perfectly
legitimate explanation for that right
i can say to inter you know
entrepreneurs unless you’ve been late on
a mortgage payment or
a home equity you know payment or filed
bankruptcy in the last 10 years
there’s really no barriers to get into
this business and for somebody like a
prime capital to want to help you out
so just because you may run your
personal credit score through experian
transunion or equifax those are the
three credit bureaus
and it may not be a high enough score in
your mind
don’t think that you can’t approach us
and talk to us about it
oh i mean that’s huge because i i do
think that some people get intimidated
by that credit score
and the credit the credit thing is so
mysterious to so many people right like
they’re not
really up front about what exactly is
all going into that and so
being able to talk to somebody who has a
little bit better understanding of it
who can say hey actually you just pay
this small bill
or you do these steps you know it it
won’t take very long for you to get that
credit score up
so sure 100 huge huge
well uh man that’s that’s big but you
mentioned um one of the things that came
up you mentioned
and i’m curious about you know the world
has changed now
and particularly the business world has
changed a lot
so i’m curious how has you know 2020 and
everything that that’s brought how has
that
changed the lending environment
particularly for laundromats
um is are there things that you guys are
doing differently
uh is is it harder to get lending is it
easier to get lending
you know all all that stuff what’s
what’s this year brought for
questions great question so with our
investor
uh there was a direct correlation when
covet hit there was a direct correlation
with money that individuals brought to
the table and put in as it relates to
the holistic project
as a whole and delinquency rates and
because of that it has tightened
slightly and what i mean by that is that
up front
jordan we’re looking for a little bit
more of a cash contribution into the
project as a whole
than we did pre-covet credit scoring has
not changed meaning that you know if you
still have a credit score in the 600s
you can still qualify to be able to do
this
even if you have a credit score in the
500s and like i said there’s you know
you don’t have any credit and you have a
200
medical collection or whatever it might
be in your bureau talk to us
right um but but certainly certainly
the willingness of investors to bring
more liquid money to the table as it
relates holistically
as the overall project has changed
rates interest rates have gone down
significantly
since covet hit we’re seeing the 10-year
treasury at nearly an all-time low
um you know right now our best financing
rates we’re advertising out there a 4.99
fixed financing rate for 84 months fixed
right
we could go lower if we had to um you
know for challenging scenarios
uh for the stellar credits that are
going through the local banks
uh for seasoned owners um but but that
is what has really changed jordan that
from a credit standpoint and i’m not
just talking credit score when i say
credit standpoint
i’m saying from uh from a project
standpoint when you’re looking to build
a new store when you’re looking to
acquire a store we’re looking for a
little bit more money in on the front
end
just to mitigate perceived risk and the
loan portfolio
as it was uh you know during the kova
times but i can tell you though what’s
awesome is even for the stores that
we’re doing due diligence on that are
that are for sale right now
um and for our existing owners things
have definitely turned a corner there’s
no doubt about it they’re getting back
in in some cases uh more than uh
pre-coveted levels
uh but it was scary there for a period
of time i’m not going to lie to you so
we’re seeing some very positive things
out there we still have a lot of our
existing owners calling us up right now
asking advice on things
for those owners that are maybe
listening to this podcast that have
you know received ppp money for their
businesses eidl money
economic development funds from their
local uh you know counties
you know we’re suggesting they do not
use that money to
buy equipment that they still go through
an entity like a prime capital to uh
to get a loan for equipment to help
expand their businesses and just hold on
to that cash
um and use lending to help them
yeah yeah and i think that’s
i’m glad you brought those up because
that has been um
it’s been just difficult to kind of
navigate that whole stuff and to know
exactly
okay what what’s this money used for
what’s the best way to deploy
it you know how you know how can i
maximize
you know this opportunity really that it
is and so i’m glad that you brought that
up because i think
having somebody to to kind of talk you
through that
and help explain that
process a little bit i think would be
huge
yeah and i think too jordan you know you
asked earlier you know what are some of
the things that
entrepreneurs should think to themselves
as well that it’s looking to get into
the business
uh and the question really is how much
money are they willing to bring into the
project
up front you know to make something
happen and then we can tell them
based on you know their credit scenario
what we think would be
you know a store price that they should
be looking at you know
i mean some some individuals it’s a two
hundred thousand dollars
store price some individuals it’s
multi-millions right
um but having those direct conversations
up front haven’t haven’t touched face
with us i mean
absolutely talk to us uh whether it’s us
or anybody else
we’re looking to help them out right we
want to see them hit a home run up front
and cash really is king to your point
too and we’re still suggesting to these
entrepreneurs
keep the monies you’re getting from ppp
set aside eidl
local funds keep it aside use folks like
us to do your financing if you’re going
to expand your businesses
so you guys landing on equipment only or
acquisitions on acquisition portions of
things we’re looking at the equipment
valuations that are
are in the locations but to your point
or to my point earlier about five and
six time
valuations and entrepreneurs that are
listening to this right now happy to
explain all of this to you in terms of
where we’re going to value locations
when we’re looking at them with you
we do lend primarily on equipment on the
acquisition side of the fence there will
be an all-asset lien that’s filed
against that location we will be in
first position
another thing to consider too jordan for
entrepreneurs that say hey maybe i don’t
have enough cash to bring to the table
to make this
work it’s always okay to ask the sellers
if they’d be willing to hold
a portion of the note themselves so they
would be in second position
behind us ultimately but that’s okay
you know the sellers a seller that is
that’s another thing too that’s really
important for your listeners
a seller that’s willing to hold a
portion of the note say
if it’s a two 200 000 store for example
and we say hey can you hold back
25 or 50 000. we’ll pay you 150 now and
then
the entrepreneur that buys the store
will pay the remaining you know 50 000
over a period of time on your terms that
you work out with them up to us that’s a
good thing
because if they’re if the sellers are
willing to put some skin into the
to the transaction as well jordan
that’s a positive thing right um so
so for those business brokers out there
that do have on their you know sell
sheets
seller financing available that’s a very
important line item for us okay so
that’s that’s lucrative
um so hopefully that helps out the
listeners here too
yeah well i’m really glad that you
brought that up because i get asked
about seller financing
a lot and uh and and people want to know
you know do do lenders you know work
with
you know seller financing also because i
think um
you know the the question is you know so
like if you’re buying a house right you
have to have a certain
debt to income ratio and if you borrow
other money to help you know buy your
house that’s going to go against it
and you know there’s all those kind of
complicating factors so
um so i get the question all the time
you know
can i take out a loan for say 150 grand
and get seller financing for
30 40 50 grand for the rest of it um
and come with a smaller amount or even
you know very little
that that’s a great question jordan okay
so for your listeners in the old days
uh it used to be okay to borrow against
your home equity line
to use that as a down payment into a
project to personally purchase a
laundromat right
those days are kind of no longer here
anymore you know because you’re
ultimately
you’re going to have a payment now uh
your debt to income ratio certainly it’s
going to be
it’s going to be higher right so what
we’re looking for really is liquid
assets that can be brought to the table
you know for the contribution into the
project
coupled with seller financing right i
think what’s really important though
is on the seller financing side of the
fence sellers need to understand
that they are going to be in second
position behind
us right so god forbid there’s a
challenge with the transaction and a
default scenario
the seller is not going to get paid
before you know we have to make it
ultimately get paid but when those
things have happened you know our our
goal is to try to continue to keep the
locations running
you know we don’t want them to shut down
we want the cash to continue to keep
going there so we’re going to do
everything we can to try to make sure
that happens as well
yeah yeah and just in case somebody’s
not clear second position just means
you know if they have to liquidate the
asset or anything like that
you know the first position is going to
get paid first
and then from whatever’s left second
position will get paid
right yeah correct i’ll i’ll correlate
it to the mortgage industry right so for
those
entrepreneurs that have a mortgage on
their home that mortgage you know your
lender for the mortgage is in first
position
okay so if the you know there’s a
default on the home
that lender gets paid first if you then
take a home equity line out
with a different lender what they’re
doing is they’re basically lending
on the equity value of that home so
they’re giving you that money
they are in second position so they will
get paid out
after that primary lender should
something happen yeah
perfect thank you for explaining that
just want to make sure everybody’s on
the same page i’m sure everybody knew
that already but
um can can you talk to me very briefly
and
this is not your area of expertise but i
think that you do touch on this
and you have touched on this already
actually um can you talk to me about
equipment and when you’re recommending
you know say you’re looking at a
location and you’re looking at equipment
how you know how do you determine you
know
should i buy a new equipment that kind
of that is such a great question jordan
i love it okay
so on these sell sheets typically what
we’re going to see is we’re going to see
the year the equipment was made
okay and there’s nothing wrong with used
equipment
but one of the things that usually is is
not clearly put on some of these sell
sheets
is the amount of maintenance costs that
these
older machines take up okay so it’s very
important when we’re doing our due
diligence we’re putting a number in our
own minds to say okay
these pieces of equipment are from 1995
right
and there’s 50 of them right the
maintenance costs
are a thousand dollars a month that’s
not the truth
okay that cannot be the case so what
we’ll find is that some of these
uh sellers will do their maintenance
themselves right
so they’re not actually charging or
they’re not putting down
on their own p l’s maintenance costs
right so
so if you’re a do-it-yourselfer you may
be more inclined to want to go into a
location that has
older equipment reliable equipment where
you can do your own
maintenance but we’re finding that
that’s more challenging nowadays to try
to do
and it takes up so much time to do
you know if you’ve been in the business
and you’ve worked in stores before
you’ve done maintenance
and you now want to be an owner of a
store that’s great
okay get in do your own maintenance but
you know obviously some of these older
machines are just like cars uh
in general you know where there’s a
little bit more maintenance as they age
so there’s not necessarily jordan a
recommended
year you know where you want to upgrade
but that certainly is taken into when i
talked earlier about the holistic
financing process that certainly is
something that we do talk about
you know with the entrepreneurs that are
interested in stores because if
if you know like i said earlier you may
look at a sell sheet and say man this
sounds like a fantastic deal
right you may have to upgrade that
equipment because maybe one of the
competitors not necessarily because you
don’t know how to work on the machines
but maybe a competitor down the street
is already going through an equipment
upgrade
right and you need to be marketable to
that to those individuals that are going
to go to that store
so that absolutely is part of the due
diligence when we work with the owners
we look at the maintenance costs we come
up with our own reasonable maintenance
costs
uh if they’re not on the sell sheets
that we think is you know
for the machine mix that’s in a location
right now but certainly
if if you’re talking you know i don’t
want to give an age because i don’t want
to offend anybody out there
but but it definitely is something to
consider um and with the competition too
like i talked earlier
you definitely need to go into these
competitive locations
and see what they have see what they’re
charging and know how you’re going to
compete against them so
if there’s a location down the street
from you that has brand new equipment in
it
and yes you may have older equipment and
reliable
you know you may want to think about as
part of the acquisition
let’s go ahead and throw some new
equipment in there as well or
refurbished equipment
that may have lower maintenance costs on
it yeah i mean people like shiny
new things so i mean it’s a huge deal
and the other the other factor i’ll just
throw this in uh because related
the other factor you have to consider if
you’re if you’re considering a store
with older equipment and you’re
considering
not you know upgrading it because you
maybe you want to do
you know maintenance yourself or you the
store can afford
you know that higher cost of maintenance
that’s fine but you also need to
kind of factor in it can’t last like
that forever
so you need to factor in you will most
likely be replacing that equipment
especially if it’s
20 25 years old already you’re not gonna
be able to sell that store
with equipment you know that old plus if
you run it for another
five years you know it’s getting up
there um so
all that you know to say something to
consider
you know when you’re looking at a store
older equipment
uh you know not just the immediate
benefit
of you know putting in new equipment but
also
you know you got to think long term
about your business
uh you know so just something to
consider want to throw yeah jordan
totally agree with you there
and one other thing i’d like to throw
out there too for some of these
investors that are listening is
if i see a sell sheet and the equipment
mix is you know one or two years old
i’m thinking to myself well why is the
seller selling right i mean what
what are the what’s the deal that’s
where you may have to think to yourself
huh is there somebody going in across
the street
down the street somebody else retooling
around the corner
bigger location again that’s all part of
the due diligence process and you may
not catch everything
right you may not but that’s where we we
go in and we try to make something
happen but you have to try to think
about the
unknown constantly for long-term
sustainability
yeah and i think that’s a great point
and it’s one of the reasons that i
always recommend
you know make sure that you’re talking
with people that know
the business because there’s so many
gotchas and like we’ve been talking
about this whole time
if you get in right the sky’s the limit
for you you know
laundromat millionaire is going to have
lots of company right um but
if you get in wrong if you get one of
those gotchas
and and it takes you down early it’s
really hard to recover from that
either within the business or if you end
up having to
dump the business it’s hard to recover
that financially jordan you’re still
right
i i cannot stress that enough just like
you right i mean
it is going to be frustrating
potentially for new investors that get
in right away
there’s no doubt right you fall in love
with this you think it’s a great deal
and you just want to get in so bad
because your heart’s set maybe you’ve
already thought through your business
plan
but it may not be the right thing for
you right again in our opinion
or somebody else’s opinion so again
we’re just trying to do
everything we can to make sure these
entrepreneurs hit a home run on the
first location they have to
yeah yeah and i mean it’s one of the
reasons i love
the idea of working with a lender who
you know specializes in the industry who
knows the industry in and out who
is aligned with you if when you succeed
they succeed
when you grow they grow and uh it’s just
another set of eyes
and watching for those gotchas helping
you develop that plan helping you crush
that competition
um and ultimately helping you succeed so
yep
yeah and then like i said i’m out in
locations pre-covered
i was out in locations all the time with
new investors
with seasoned investors that we already
had multiple stores with
and you know i love going i love looking
at the competitive stores too i mean
that’s what we do
post covet it’s been certainly
challenging to try to get out as much as
we did in the past
um so it’s it’s a little new now but uh
but i would say these folks have to
visit these stores and check them out
yeah um okay well i have uh
i have one or two more questions and
then we have a couple little segments
that we like to do
that i’m really curious to get your take
on um
but before that is there anything else
that we need
to be talking about right now you know
you’re you’re kind of the expert i’ve
been
i’ve been taking notes i have been
learning a lot i really appreciate you
coming on
and sharing so much already but is what
else do we need to be talking about here
what else do people need to know
entrepreneurs need to know well i’ll
tell you what about the lending process
it’s it’s sometimes not as easy as one
may think
because originally when i said you know
you’re going to send over all your
financial information
okay even if somebody’s willing to come
to the table and say i you know i’d be
willing to pay cash for this location
okay which i’ve heard before right
that’s fantastic that’s great
hold your cash all right um what they
need to understand too it’s not just
their personal
credit experience and it’s not just
their previous business ownership
experience should that be
you know part of it it’s not if they
have an existing full-time job
it’s not if they make a lot of money
currently right now
every single store is its own
project okay so the most frustrating
thing sometimes for folks that come to
the table is they have their heart dead
set on getting in
and you know they have a great credit
scenario
but the project may not be the best one
for them in our opinion
um so sometimes i would say and and
recently okay especially post covid when
we’re looking at some of these numbers
from these locations
you know sellers some sellers are not
you know coming forward quickly with you
know updated numbers
from postcovid not everybody uh
just a handful of scenarios um but you
know we want
as much information as possible to make
a rational decision on our end
uh just understand that the lending
process may take a little bit longer
uh than what it did take you know
precove it there’s certainly some things
that
we were able to do that we certainly
can’t do postcovid
and what i mean by that is you know cash
contributions in the project were
a little bit less than where they are
now um but also we’re looking at some of
these stores to your point earlier
jordan about the older equipment um
you know looking more at the competitive
environment out there with these stores
um it’s not going to be a you know week
two week long process it may be a four
week long process
once you start doing doing due diligence
on
on these locations so um you know again
great personal credit doesn’t
necessarily mean
uh you know a week-long financing
process and i know that’s frustrating
for folks out there
yeah it i mean i get that and and it is
and i
i think there’s always whenever there’s
financing involved there’s always
you know you got to go through the red
tape you got to jump through the hurdles
and you know you get you get picked over
a little bit you know because people are
looking at
your scenario your financial scenario
and the business scenario
absolutely um a question that just
popped into my head that i think would
be really
relevant uh actually is kind of on the
flip side of everything we’ve been
talking about
what about those uh what about those
owners who are thinking about selling
here in the next year
two years what can they be doing to make
it more likely
that you or somebody is going to be able
to finance
a buyer for their laundromat yeah i
think that is such a great question
um you know really what we’re looking
for is when we’re doing due diligence
we’re looking for
as much information as we possibly can
get on these locations i mean
the seller’s handwritten notes about
their you know drop-offs
uh you know love those okay um but
really like
if if you’re an owner and you’re right
now a hands-on owner and you’re not
paying yourself a salary
you’re doing all of your maintenance
yourself these are things that we
consider
when we’re looking at a location okay
because these are owner benefits
obviously
and some of the folks that may be
looking to buy these locations may not
be the ones that are going to be doing
that
okay so having your financials in line
being willing to come up with all of the
utility bills for the last 12 months i
think that’s certainly important
um uh the another thing that’s really
important to us as well is the actual
age of the machinery
the models the then prices on the
machine basically trying to back into
the profit and loss that that the
sellers are providing
so if you’re a seller out there looking
to put your store up
you know we’re looking for consistency
year over year right
we’re looking for not necessarily the
most detailed records
but we’re looking for uh the standard
things that you would see on a p
l right and like i said the owner
benefits have to be added back in
if they’re not on the p l’s right now
we’re not necessarily looking for a
balance sheet
okay i don’t need to have any balance
sheet uh quickbooks pl is just fine
right utility bills we have the ability
to back in
we know how much water these machines
are using
we have had in the old days although i
thankfully
we have not had this recently but folks
would go in that think
they’re going to sell their stores and
they run their water meters all night
right and they or they run the machines
and you know they’re trying to make it
seem as though they’re doing more
business than they have
uh we’re we don’t see that uh as much
anymore now than we did in the past but
um
uh but we’re just looking for the
information that uh
that we’re asking for right we’re
looking for uh
the last two years of profit and loss
statements for the locations
we’re looking for the last 12 months of
utility bills
we want to know if there’s any ownership
benefits that are not listed on your p
l hand written notes of drop-off and
delivery services great love those
um we want to know the age of the
machine the models of the machines and
the bend prices on the machines
and you know that pretty much covers it
but but i can tell you jordan sometimes
it’s it’s challenging
to try to get the ages of the machines
because the owners say well i don’t know
how old it is
just give us the model numbers and
approximate right um
you know so but but just getting to that
point sometimes it’s challenging for
for owners i mean there’s locations too
that some sellers say oh my gosh my
dryers are 30 years old
i mean i don’t i can’t tell them their
dryers are 30 years old yeah you can
it’s okay
you know but but full disclosure right
no secrets that’s
that’s the big thing and that goes for
the new investors that come in the
business as well
just be just be frank with us about what
you’re thinking about doing if you want
to get into laundry and you’re thinking
about something else too
great right um but but for
being willing to to do full financial
disclosure on the seller side of the
fence is
is something that i i’m trying to make
the transaction happen i’m not trying to
not make it happen again because
there’s no money to be made for anybody
unless it happens so
i’m trying to get to a yes with the
information i’m asking for
yeah so so work with you so i’m hearing
you know have as much information as
as possible and keep good records as
much as you can
we do have some free tools a lot of
myresource.com
resources i’ll put a link in the
description uh
you know that you can go check out
there’s a worksheet there where you can
go
and write in all the model and serial
numbers just keep everything neat tidy
organized
it’d be easy one sheet to just hand a
lender or a broker or
you know a buyer of your laundromat um
some other tools there so go check those
out
um man i mean that’s that’s super
helpful because i think that
that side of it gets left off a lot
you know in terms of how to sell your
laundromat and a lot of times when
you’re
when you’re buying it’s your first time
buying but when you’re selling it’s also
a lot of times your first time selling
and you know there’s obviously things
that you can do to
you know improve the value of your
laundromat and to make sure you have a
smooth transaction and to make sure you
can find a buyer who can actually
purchase your laundromat
you know jordan something else to to
talk about with the sellers too is that
if
if there’s a location that’s for sale
for you know 200 000
for example right and we disagree right
we are more than willing to talk to the
sellers and the sellers may not be happy
okay we may come up and say it’s we
think it’s worth 180 right
and sometimes the sellers are not too
happy and what we do is we talk to them
about our rationale for it they may want
to look for somebody else to buy the
location and that’s completely okay
but see i’m an open book i have no
qualms about holding anything back
i i want to get to a yes constantly and
my
my deal with a business broker with a
seller
is not to try to get to know ever right
it’s just
let’s try to get the information that we
can to make the best decision for this
particular entrepreneur
that’s coming to the table that wants to
buy it right now and sometimes
i’ll tell you what jordan sometimes
they’ll sell for 200 and we’re saying oh
wow this is we think it’s worth 250
right which is great so it does work
both ways but but getting
the information from a seller and if we
ask questions
don’t don’t get mad at us right we’re
not trying to get to a no we’re really
trying to make something happen for you
yeah yeah don’t yeah don’t be offended
it’s just
that’s that’s how businesses are valued
right you got to have the numbers
and you know our industry traditionally
has been
very difficult to get accurate numbers
so if you’re really looking to sell your
laundromat one of the best things that
you can do
is give accurate information accurate
transparent information
because that gives you a ton of
credibility it makes buyers feel at ease
it makes lenders abilities
everybody feels good about it because
you have accurate numbers and you can
sleep well at night too because you
you know you’re just you’re being honest
you’re being you’re having integrity and
that’s what it’s all about right you
don’t need to step on anybody or
you don’t burn anybody in order to get
ahead you know look at dave men’s
laundry millionaire
right so absolutely great guy um
awesome one quick question about
your company in particular uh where do
you guys land
do you guys land all over certain states
what do you sure
we are nationwide so prime capital lends
uh in all 50 states
uh we i know you’re in california we are
registered with the department of
business oversight as a lender out in
california so
uh you know that’s a big thing out there
right you have to be registered
in that particular state to be able to
lend money yeah um
but yeah we like to do that in all the
industries
you know i’ll tell you what once you get
signed up out there with them it was not
a big deal once we once we got it taken
care of but
uh yeah that was that was fun i’ll leave
it at that
um but yeah all 50 states and you know
we we do acquisitions we do refinancings
we do
uh straight up uh financing for
replacement equipment retools
and you asked earlier jordan what do we
finance really anything with a serial
number that goes into a location is
something that can’t be financed
awesome tables and shares obviously too
right but we typically want to have
those financed with serialized assets
right right as a as a part of a package
correct um correct yeah well i love
hearing that you do in all 50 states
you know for the listeners because we
got people all over
uh listening which is really cool but
more selfishly one of my goals is to buy
a laundromat in hawaii
so i will be calling you when i find
that because i really want to i love
my trips out there i’d love it i’m going
to be traveling out there too then
yeah that’s right that’s right we’ll all
just benefit
write those expenses off heading out to
hawaii to check out thousands of mats
and it’d be great
absolutely absolutely oh that’s another
thing too jordan really quick uh you
know you asked about the sellers too
what we find sometimes too
is you know all of us don’t want to pay
taxes okay or pay the least amount of
taxes possible
we see that sometimes sellers put
personal expenditures
in their numbers okay so the numbers may
not look as good as they do
that’s okay okay even if they’re looking
to sell just disclose to us
if there are some personalized
expenditures in there one thing i do
want to make clear is i am not an irs
agent
okay so anything that is told to me uh
is not going any further than going to
me
all right and it’s not going to the irs
so uh
you know as far as disclosure uh don’t
hesitate to let us know if some of that
stuff does exist out there
yeah awesome i think that’s good that’s
good input and sometimes that line can
be a little blurry with businesses
too so better better to
you know let let the lender know and you
know let them kind of help you decide
what’s what’s what so oh absolutely yeah
i think that’s a good
that’s a good word um all right well
i mean i still have a couple questions
for you so don’t go anywhere yet but
anything else that you feel like you
need to address
we’ll we’ll get to how people can get a
hold of you kind of at the end
but in terms of lending anything else
you feel like you need to address
i think those are some of the big things
you know i mean i did mention earlier
about
some of the intangibles for the
locations when you’re doing due
diligence you know
take a look uh don’t hesitate with the
landlords when you’re doing due
diligence to say hey i want to go up on
the roof
uh don’t hesitate to have a you know an
hvac professional go with you and check
out the hvac units on the roof
uh don’t hesitate to have structural
engineers come if there’s a building
involved and check out the building and
check out the integrity of the building
don’t hold back don’t don’t assume
throughout the process
right trust but verify and again it may
not be a seller that’s holding anything
back it may be something that they don’t
even know about
right uh i mean i’ve had sellers that
have tried to
uh you know they’ve said hey the hvac
unit was replaced
you know four years ago you go up there
it’s a 25 year old unit
right and again not their fault they
were told uh
that that it was replaced right so again
you have to really look at some of these
intangibles when you’re going into a
location
uh doing the due diligence on it and uh
and with the least two i didn’t mention
the lease enough earlier
understanding what everything on the
lease means um i’ll mention this jordan
that
i think is another important point
before we go on here
that um some of these leases have
clauses in them
that state that within 90 days should an
entity such as a walmart
come in and purchase a strip center for
example
the lessee has 90 days to evacuate the
premises
well you can’t just move a laundromat
across the street right
you’re done so i think these are some of
the things when you’re in
in i mentioned triple net lease this
morning
certainly not a deal breaker by any
means um but
really understand what the lease means
and some of these clauses that are in
the leases
ask questions about them because that in
that particular case
you could be completely out of business
especially if the uh you know strip
center is
to be sold or capacity of the strip
center is currently at 50
and has been consistently at 50 percent
um just
really just do your own due diligence
with us and we’ll do it with you
um but just some of these things that
you’re maybe not even thinking about
you’re thinking ah the
the rent not too bad you know it’s
pretty good you know we’re making
you know we’re gonna make a lot of money
a year it’s all about trying to make
more money
right yeah yeah that’s a huge
i mean that’s that’s so wise and you
know
we get fixated on the the number a lot
of times uh but you got
you know your price and you got your
terms your lease
your your rent amount and you got your
terms of the lease and both
are equally important if not terms being
more important
even absolutely so and those are the
things that can easily get glossed over
or you know you know explained away
or any of those things so it’s really
important that you do understand that
piece
yeah and something too jordan is that
the existing owner the
or the person that’s selling they may
not even know that some of those things
are even
in the lease you know it’s been assigned
over to them they didn’t do their full
due diligence so when you bring it to
their attention
they may not even know about it you know
you’ll send over a lease that’s or
they’ll send you a lease that’s 30 pages
they’re just again looking at the number
the monthly payment they may not even
know about some of these things so
that’s that’s okay too
right yep yep all good but you got to
know i mean it’s
the name of the game is you know getting
as much information as you can
before you get in before you close on
that thing it becomes yours
because you want to know what you’re
getting into as much as possible and
like you mentioned earlier
you might not catch everything but you
want to catch the big things for sure
and you want to catch as much as you can
for sure yes sir awesome well i’m
excited about this we have a little
section called
secret sauce listen up it’s the secret
sauce
[Music]
and i’m excited because you have a very
unique perspective
you know you’re you’re looking at all
kinds of laundromat deals you’re helping
all kinds of laundromat owners and
would-be owners
but secret sauce is directed towards
current owners who own laundromats and
you know the question is it
you know is there one thing that maybe
you could point to
that really helps laundromat owners
succeed thrive you know do well in the
business grow
that they can you know a lot of my
owners can implement into their
businesses or their lives or their
mindset or anything like that
right now postcovid there’s certainly a
lot of things
right spacing and laundromats that has
to be taken under consideration
card systems i was not a proponent
especially in california
florida a year or two ago jordan i’m
like i don’t believe these card systems
are going to work in these locations it
just wasn’t
right now more and more i’m seeing just
card system transactions coming across
right people want to do card right and
loyalty programs and build the brands
i think those are things to consider i
think the passion uh
is is a big thing that continues to uh
uh be big you know for laundromat owners
that are most successful
another thing is the pickup and delivery
drop-off services i think that’s
something too
that is uh more prevalent folks that
aren’t even thinking about it now should
be thinking about it
but really the secret sauce is
understanding thinking ahead okay
thinking what could be um you know for
those owners right now that are
complacent
in their existing locations okay
uh you have to be thinking about
upgrading all right especially if you
have a 1500 square foot facility
um and you know there’s not much around
you somebody may come in
and take you out right so even though
you’re doing great right now in the
locations that you’re in
always thinking ahead and having you
know your sales reps your distributor
partners
working with you um you know folks like
jordan like myself
in the business talk to us talk to
others uh talk to
your peers on you know on the cla forums
talk to the individuals that are in the
business right now
see what they’re seeing listen to what
they’re talking about
that’s the secret sauce jordan you know
trying to stay that one step ahead
because
somebody out there is trying to put you
out of business
right now right or thinking how they can
or a distributor
that’s not in a particular territory
right now is saying i’d love to get in
here
right let’s find an entrepreneur to come
in and put this in
so the secret sauce is again not being
complacent
thinking about the things that post
covid are certainly extremely important
to customers
visiting the locations visiting your
competitors you may not even know that
your competitors have upgraded their
equipment
a month ago or two months ago right some
of these equipment
you know uh retools are happening
literally in days now
uh staying ahead of the game from that
standpoint and just understand the
competitors is
really important too man well that
that was more than just secret sauce
that was secret sauces
there’s a whole host of them and i loved
it um because i think you’re right i
think
you know all those things are just so
important and particularly the thinking
ahead
because i think laundromat i mean it’s
just
it’s so easy to put it on autopilot so
easy to put it on
you know coast mode and to keep doing
the things that you’ve always done that
have always worked
and you know the world’s just changing
so fast right especially this year
oh no doubt you do need to be thinking
about you know
the future and what’s ahead and how
you’re going to adapt and evolve and
change with it
yep no doubt about it 100 cool
well we have another section that we
like to call pro tips
pro tips and pro tips is directed more
towards the people who are looking to
buy their first laundromat
and i mean you’re given a ton of tips
already
you know is there maybe one that stands
out um
for the new investor the new
entrepreneur who is wanting to buy their
first laundromat that’ll help them get
started
in the right direction okay so
pro tip in my opinion is and i’ve said
this earlier jordan
do not fall in love with the location
you think you want first
all right case in point entrepreneur
comes to the table they live
two miles down the street it’s so easy
for them to say oh my gosh this
location’s up for sale i used to go here
as a child
you know i used to work at this
laundromat ten years ago
that may be the one that’s going to be
out of business ultimately because
something else is going to come in and
take it out
okay so i think that it’s really
important not to fall
in love with a location let the numbers
do themselves
let the numbers speak for themselves
after you do the due diligence
and understand that you may not get into
the first location the first three
locations the first five locations the
first 10 locations that you do
due diligence on it may be a longer
process than that so
so don’t be discouraged if you don’t
find what you’re looking for or hear
what you think you want to hear
right away we’re here to help you
there’s a lot of resources out there
that are here to help you
and just if you really feel passionate
about getting in wait for the right
opportunity don’t fear don’t try to push
an opportunity that
could potentially be a challenge for you
down the road
yeah excellent pro tip i probably have
that exact
coaching call at least one time a week i
had that coaching call yesterday
somebody was like there was a you know
there’s a laundromat down the street
from me
and you know it seems like a good deal
and it does seem like a good deal
but it seemed there’s something going on
with it right i don’t know what it was
but i said hey look we got to get more
information on this deal because hey
it might be an awesome deal but
there’s just something that’s not quite
right about it but it was a mile down
the street from his house
you know you can easily paint that
picture paint that vision of
man i can just swing by on my way to
work and then i can absolutely
home and that’s awesome and if it works
out that’s nice
but it’s not worth buying the wrong deal
you know because
again i’ve done that and it
it’s a lot more painful to buy the wrong
deal than
to wait it out and do the work to find
the right deal
jordan 100 i mean it is crazy i hear the
same thing all the time too
and it’s so discouraging right when you
say hey we need to get more
information totally get it but it’s a
business decision so you have to treat
it
as such yeah huge huge huge
pro tip heed that advice if you’re
looking to buy a laundromat
heat it please it’ll save you a lot of
trouble and pain and money
take my word for it um the last section
that we have is called uh just
recommended resources and
and you know do you have any resources
that you recommend
uh to owners to
you know future owners um you know it
could be
a book or a youtube channel or
whatever yeah well i’ll tell you what
there’s a podcast individual jordanberry
does it’s
laundromat resource.com so obviously
that’s one resource
right somebody just booked their trip
right back on the show later
[Laughter]
no excellent resource right i mean you
know having a podcast
beautiful right uh but really the coin
laundry association’s a great place to
start for the entrepreneurs like i said
i’ve i’ve done
workshop presentations for the cla in
the past
you know the cla is is the advocate of
the business they have white papers they
have gold papers they have
a lot of things you can study to try to
learn the business
um you know they have a forum section i
always suggest i know you do too jordan
you know the forums uh are a great place
to learn from other owners
a developer poor with some of those
other owners i think i think that’s
really the best place you’re going to
understand
how people think right understand what
it’s like to be a laundry owner so
to our point a minute ago about the pro
tip
you know you may think that you’re going
to buy a location down the street you’re
going to go to it in the morning then
you’re going to go to in the afternoon
that necessarily isn’t going to be
enough to differentiate you and make
sure that there’s
uh you know barriers to entry for for
your competitors right
so understand what some of the other
owners out there
in various parts of the country are
seeing
uh and be engaged with your peers um
you know i think that’s a really good
place to start
uh if you’re thinking about getting in
and understanding what they’re seeing
and you can browse these forums
and see what these other owners are
talking about yeah
awesome awesome recommendation for
resources
man i got one more question for you but
before i ask it to you
it’s been awesome having you on i think
this is going to be super helpful for so
many people
because that you know the financing is
sort of this mysterious thing that a lot
of people just don’t understand and are
intimidated by
and you know it’s it’s hard to open up
your financial situation to
someone and so having it you know having
an idea of
who you are for one i think is huge um
and how you want to do your business
which i love you know as you know
positioning yourself as
on the same side uh interest aligned and
you know and having that kind of
consulting uh cons
consultative yeah i’m gonna go with
consultative
approach to uh lending is
it’s just it’s so helpful and it kind of
puts people at ease i think so
thank you so much for coming on my last
question for you is
i know for a fact that people are going
to want to reach out to you to get a
hold of you
to find out more information and
hopefully to work with you
so what’s the best way for people to get
in contact with you well that’s a great
question so we’re all over facebook
we’re all over twitter
goprimecap.com so go primecap.com
they can call us 630-884-8900
select the financing option and
ultimately try to do business with chris
money i mean we’re in the business to
try to make you money
so uh you know we have a lot of a lot of
fun times
we’ve got a lot of great customers over
the years and again
all i do all chris money does is finance
laundromats that’s
my that’s my job so i’m your advocate
so touch base with us give us a holler
yeah definitely do that
and uh man chris again thank you so so
much for coming on for sharing your
wisdom for sharing your insight
you came with a ton of value that i know
is going to help a lot of people
really appreciate it and uh looking
forward to having you back on since you
uh
you know you buttered me up a little bit
so ah we’re gonna go to that just trip
to hawaii soon
oh i can’t wait i’m gonna have lots of
consulting needs out there too
so what a month out there yeah all right
we will talk to you
soon all right thanks jordan all right
guys i mean
jeez chris really really came with some
amazing amazing detail about laundromat
financing
things i hope you learned something new
i know that i learned a ton you i was
taking notes during that whole interview
he really really broke things down
really well and you can tell he’s
excited about what he does
you can tell he really really wants us
as laundromat owners to succeed
and i love that and i can you know just
i can just tell he knows his stuff and
he
and he wants to put it to use so i just
want to encourage you
whether or not you’re in the market for
some financing right now if you have
financing questions
man just shoot him a a message an email
whatever hit him up on social media all
his links
um he shared them at the end there but
i’ll put them all in the show notes and
in the description if you’re on youtube
um so that you can get in contact with
him and ask him about financing
uh again he came with a ton a ton of
free information i thought it was great
and super big thanks to chris uh for for
all that you shared
guys as always i want to encourage you
to not just uh
put something into action like we do
every single week
make sure you’re you’re finding one
actionable thing that you can do
whether that’s pursuing some financing
or whether that’s
you know we talked a lot about even just
preparing your laundromat to sell maybe
you can start doing that now even if
you’re not in the market to sell
there’s just so much stuff in there that
you can pull out one thing
and put it into action so not just that
but also the other thing that i want you
to do
is go to the forums and ask a question
and answer a question all right i’m done
trying to brainwash you for this episode
but don’t make me write a rap song and
rap for you
about this because i will do it if i
have to all right
uh that wouldn’t be good for any of us
okay guys thank you so much this has
been
awesome i have been thoroughly enjoying
this entire process
i love love love making the podcast and
i just can’t wait to keep doing it for
you guys so
all right let’s uh man let’s go out and
make it happen this week and we’ll get
back together
next week for the next episode which
i’ve already recorded
and is incredible it is something way
out of left field
that is going to be not just relevant
for us but it’s going to be so
interesting it’s like it’s like so
interesting i’m not even kidding you get
excited
we’ll see you next week this is jordan
for the laundry resource podcast
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peace
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