The Laundromat: An American Dream Business & An Entrepreneur's Playground

By Chuck Post

New laundry investors need to know what is discussed in this book. The laundry investment model is very complicated. Many people are fooled by the ease of the operating model itself, but your investment success is more complex. A laundromat uses fixed value every day. Intervention by the owner is essential to reverse that trend. Huge rewards are available to the ones that figure this out. Read this book to get pointed to the right direction. You will be forever thankful that you did. And, if you do,

The self-service laundry industry offers much more than just a sound investment; it is an American dream business. Laundry owners are everyday people fulfilling their greatest dreams. Regardless of what you do now or intend to do in your life, whether you are currently a blue-collar worker, a grocery clerk, a mechanic, retired or active military, an attorney, or an owner of other businesses, the laundry industry has a place for you. The diversity of the industry offers rewards for each investor, regardless of their background. For some, the business is run simply as a "quarter factory", with the owners using a minimum amount of their time. But for those who grasp a better understanding and have a hunger to maximize the benefits of laundry ownership, it is a challenging opportunity with rich rewards. Most laundries are independently owned and operated. However, there are individuals and families who do own in the hundreds of them.
We will be answering the biggest questions about laundromat investing and identifying issues that only the most seasoned laundry professionals understand. We are dedicated to sharing our education and experiences so that you too will have access to the secrets of this mystifying investment.
You are about to be guided along a path that will lead you towards a successful business; a future that is greater than you now realize. Laundromats are easily scaled, provide steady income and are resistant to economic and other devastating occurrences; covid, bank failure, low employment and high inflation, and the like.
I will also be answering these questions:
1. What makes the laundromat the best example of the American Dream business?
2. Can I get wealthy in the laundry business & How?
3. Understanding the various categories and styles of laundromat investing
4. How do I find a laundromat to Acquire?
5. Is financing available?
6. Can I trust the income and other information I receive?
7. How do I conduct due diligence?
8. What resources do I need to have available?
9. How much of my time will I need to put into my laundry business?
10. Is the laundry business really that easy to operate?
11. How much money do I need to get started?
12. How much money should I expect to make in my laundry investment?
13. How difficult is it to sell the laundry if needed?

• Language: English
• Publisher: BookBaby
• Release date: Apr 25, 2023
• ISBN: 9781667899046

Book preview

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THE LAUNDROMAT

An American Dream Business & An Entrepreneur’s Playground

©2023 Chuck Post

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review.

print ISBN: 978-1-66789-903-9

ebook ISBN: 978-1-66789-904-6

Contents

Foreword

About the Author

AN INTRODUCTION TO INVESTING IN THE VENDED LAUNDRY BUSINESS

THE OPPORTUNITY

THE LAUNDRY INVESTOR

WHAT ARE THE ELEMENTS OF VALUE?

LAUNDRY NIGHTMARE STORIES

THE LAUNDRY LEASE

INFRASTRUCTURE, EQUIPMENT & TECHNOLOGY

THE MODEL & CASH FLOW

THE MODEL FORWARD DISCUSSION

MODEL NUTS & BOLTS

SEE SOME OF OUR RECENT COMMUNITY MINDED LAUNDROMAT PROJECTS.

"NEVER BUY A LAUNDROMAT FROM SOMEONE WHO OPERATES IT BETTER THAN YOU WILL!

THE LAUNDROMAT SEARCH

WHAT HAPPENS WHEN A COMMUNITY LAUNDROMAT GOES ALL OUT?

HOW TO BUY A LAUNDROMAT

THE SUSTAINABILITY OF THE LAUNDRY BUSINESS

BOOK II: HOW TO BUY A LAUNDROMAT

THE LAUNDRY INVESTORS 7-YEAR PLAN TO FINANCIAL INDEPENDENCE

LAUNDRY OWNERSHIP

THE EXIT STRATEGY

MORE DISCUSSION & FINAL WORDS

IN CLOSING

GLOSSARY

Foreword

By Marc Stern

Executive VP/ Chief Lending Officer

Eastern Funding, LLC

I started in the laundry business 32 years ago working for one of the major manufacturers in the industry. After spending two years learning the business from the ground up, I became involved in sales and financing of laundromats. It was very obvious to me that the people that I was financing were entrepreneurs who wanted to be their own boss and control their own destiny. It was at this point in my career that I began to travel around the United States meeting distributors of laundry equipment and their customers. It was somewhere around 1991 that I met Chuck Post. Chuck at that time was living in Northern California. An opportunity opened up in Southern California with a local distributor who was looking for a licensed broker who knew the laundry business. I immediately thought of Chuck and introduced him to the owner of the business. The marriage was made, and Chuck moved to southern California. Since then, Chuck and I became not only business friends, but personal friends. 

After writing this book Chuck approached me to write the forward for it. I told him I would only after I had read it and made sure that the book would be something that would be helpful, informative and true about our industry. Having read the book, I can state positively that it has met all my requirements. For those of you who want to be an entrepreneur, are interested in the self-service laundry industry, or want to own a business that is a crucial necessity of life, this book is for you. In the book Chuck talks about how to start a laundry, how to be successful in the business and most important how to serve the community once you open your business. Topics covered are everything from picking the correct location, lease negotiations, store layout and modeling projections. The book contains many true-life examples of successful owners in the business as well as examples of mistakes made and how to avoid them.

Today Chuck continues to refer both new and existing laundry customers to my company, Eastern Funding. We have found his modeling, which is detailed in the book, to be very useful in our due diligence process when approving a new loan. In the twenty-five plus years of us doing business together, we have been successful in assisting hundreds of people to get into the laundry business and expanding their business. If you are an entrepreneur and are interested in the laundry business or are in it and want to expand your business, I strongly encourage you to read this book. It is my pleasure to write this forward and I hope you enjoy the book.

Marc Stern

Executive VP/ Chief Lending Officer

Eastern Funding, LLC

A Master in the art of living

The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his education and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing. To him he is always doing both.

Author Unknown

About the Author

Chuck Post started in the self-service laundry business in 1985 following a twelve-year career in the bicycle business. Previously, Chuck was the head of marketing and sales for Gitane Bicycles, USA, a Renault Automobile subsidiary and later joined in partnership with Lotus Bicycles, an independent designer and bicycle importer. Chuck handled the design and development of the product lines, consisting of sixteen models of bikes in various colors and modified specs. He managed a sales force of up to twelve people nationwide, and traveled extensively throughout the USA, Asia, and Europe.

Chuck came to Gitane Bicycle Company from working in bicycle retail and was solution-minded, becoming known as the person to turn to if you were a struggling bike shop owner. This aid became a brand for our vision and a point of focus. Like the laundromat, owning a bike shop was a dream business to many people. It was also once a very good way to earn a living, make friends, and be involved in a business that was generally upbeat.

Following many changes in the distribution of bicycles, Chuck looked for something that seemed to have a broader path. When the opportunity came for me to represent the Maytag brand to commercial laundry equipment users in Northern California, consisting primarily of coin laundromats, he researched the opportunity by visiting laundries. Many were poorly operated. These businesses ranged from being void of care or character to downright disgusting. He felt that the laundries were under-servicing the market, and worse, not making the income that they should. There was just so much room for improvement. Chuck believed that he had just discovered an industry where he could contribute and make a difference. That was exciting.

For over thirty-five years, Chuck has built more than 40 new laundries and has brokered and retooled the hundreds of existing laundries, laundries that came in all kinds of conditions. He is now operating PBI Laundry Consulting, Inc, with his son in law, Chris Mason and is considered to be a leading consultant in the industry. Throughout his journey, he has owned a laundry distributorship with twenty employees, and has been a broker throughout his career, over 35 years. I have been licensed and or recognized as a Licensed CA Real Estate Broker since 1985, a general licensed general contractor, licensed for several years and an expert witness, recognized by California courts. Since the 2008-2009 and the financial collapse, which caused the shutting down of the distribution business, Chuck has worked with new laundry buyers and progressive laundry owners in working to make each laundromat a more viable and rewarding business. Scores of investors have benefited from Chuck’s and his team’s entrepreneurial guidance.

Today, Chuck focuses on consulting with laundry buyers and owners through PBI Laundry Consulting Inc., which also offers the premier due diligence system and Buyers Do It Yourself kit as well as offers other buying and operational services. Chuck, along with his partner, Chris Mason, and their team focus on guidance, the due diligence process, along with the model, the lease and then aiding investors in correcting these primary elements of their investment. Additionally, Chuck does Expert Witness work when business deals break down. Examining facts of a deal gone wrong and analyzing past data with sometimes only minimal documentation has taught me more than any one other aspect of this business that I have undertaken.

Hi, this is Chuck Post. Thank you for buying this book. I have left out nothing. You will now be looking at the laundry business through trained eyes. I have watched three generations of laundries complete their cycle, and boy, do I have a story for you. We will be discussing how to search for your laundry, the buying process, and the discovery issues. This is a great business, but you have to understand it, or your investment may be at risk. This book tells the whole story.

My Special Thanks goes out to the following people who were instrumental in the development of this book,

First, Debbie Oliver, our most trusted manager, who worked feverishly to head up the editing team.

Chris Mason, my partner at PBI Laundry Consulting, Inc. and is also my Son-in-Law and father extraordinaire to my three grandchildren and husband to my daughter.

A special thanks to Kimberly Long, my confidant, who has worked with me for 20 years, for her creative work and creation of the book cover.

My thanks extend to Marc Stern whose own knowledge and reputation in the laundry industry is unsurpassed, and for writing the foreword to this book, and who has also been servicing this industry for as long as I have.

To the contributors:

Jeff of Crown Laundry in San Ysedro.

Mike of Corner Wash in Normal - San Diego.

Amy, Owner of The Wild Swan Laundry Company in Pasadena.

Andy owner of Pacifica Laundry.

And a special thanks to Tom, Eric and Mike, owners of the "World’s Largest Laundromat’’ for their contributions and for the good work that they have done.

My greatest appreciation goes out to my long list of clients, who throughout my career have made this work so challenging and enjoyable. The experience I shared with each of you has greatly contributed to my education and the making of this book.

And, of course, thank you to my daughter, Candice and my grandkids, Kaya, Ely and Bella, who are forever my inspiration.

AN INTRODUCTION TO INVESTING IN THE VENDED LAUNDRY BUSINESS

The self-service laundry industry offers much more than just a sound investment; it is an American dream business. Laundry owners are everyday people fulfilling their greatest dreams. Regardless of what you do now or intend to do in your life, whether you are currently a blue-collar worker, a grocery clerk, a mechanic, retired or active military, an attorney, or an owner of other businesses, the laundry industry has a place for you. The diversity of the industry offers rewards for each investor, regardless of their background. For some, the business is run simply as a quarter factory, with the owners using a minimum amount of their time. But for those who grasp a better understanding and have a hunger to maximize the benefits of laundry ownership, it is a challenging opportunity with rich rewards. Most laundries are independently owned and operated. However, there are individuals and families who do own in the hundreds of them.

We will be answering the biggest questions about laundromat investing and identifying issues that only the most seasoned laundry professionals understand. We are dedicated to sharing our education and experiences so that you too will have access to the secrets of this mystifying investment.

You are about to be guided along a path intended to lead you to a successful business; a future that is greater than you now realize.

The following questions will all be answered:

What makes the laundromat the best example of the American Dream?

Can I get wealthy in the laundry business & how?

Understanding the various categories of laundromat investing

How do I find a laundromat to A?

Is financing available?

Can I trust the income and other information I receive?

How do I conduct due diligence?

What resources do I need to have available?

How much of my time will I need to put into my laundry business?

Is the laundry business really that easy to operate?

How much money do I need to get started?

How much money should I expect to make in my laundry investment?

How difficult is it to sell the laundry if needed?

Welcome! You will probably like the answers to the above questions but, like anything in life, there are winners and there are losers. The laundry business has long been known to offer high returns. Also, laundromats are easy to operate. It is also known to be an All-Cash-Business and a Safe Investment. All of these statements are, or rather, can be true. The coin laundry is in fact a "Necessity of Life Community Service Business." The need is there so the opportunity exists, but the reality is that each investor can and will run their laundry business in the manner that they see fit. It is dangerously easy to get lazy when you are in the laundry business. Deferred maintenance should always be expected.

Laundry owners all share one common trait: all are very independent. The key for you, the investor, is to understand that the laundry business is a timeline business, and your success will be largely determined by your understanding of this single fact and how you choose to handle it. Most laundry owners run their businesses too passively, minimizing the quality of service to the customers and in doing so, they are leaving a lot of money on the table. This is the stuff of a greater opportunity.

We will be discussing the successful laundry and its operations, strategies to advance it, and the very important timelines that you should understand and consider before acquiring a laundry. This book is not intended to puff up the business or to push you toward investing your money. The purpose of this book is twofold: first, to demonstrate the fantastically diverse opportunities that are available to you and how you can succeed, and second to urge you to look deep inside yourself and test your commitment before entering this business. I need to warn you that if you aren’t aware and prepared for the hazards, laundry ownership can turn into a truly miserable experience.

Let us begin by looking at a single average priced laundry and cast a realistic understanding of the returns that you should expect. A caveat, in this case, the laundry is bought without excessive deferred maintenance and operations are consistent with the market. This may help simplify the base level financial picture for you.

Understanding the Return on Investment (ROI).

Throughout this book, we will refer to the ROI, with reference to a level of 20%, cash on cash as a base buy-in level. This is completely subjective and variable to the market and location and other comparable opportunities, the current cost of money, and timing. It is important to figure out the acceptable multiplier and adjust the formulas and examples based on the current conditions. The 20% buy-in level is the most expected level of return by most laundry buyers at the base level. However, that return must be verified and also be sustainable.

With that in mind, the minimum-return at base levels that one should expect to earn in the investment of a laundromat should be something like this example,

Acquisition price = $400,000.00

Down payment = $150,000.00,

Finance $250,000.00 over 7 years with an estimated Monthly Loan Service Payment of $4,200.00

Total Discretionary Monthly Cash Flow = $6,900.00 = Annual $82,800.00 = 20.7% return of total investment

Cash on Cash return = $2,700.00 = $32,400.00 = 21.6% of cash investment.

Asset Value at end of term is the variable, but it is likely 20% or more above your original down payment.

Note that the laundry must have a reasonable lease and a path forward.

This is the promise, and this is also the fact, but don’t forget the caveat. These equations are quite typical and consistent, regardless of the purchase price. There are exceptions, of course, and various market areas and regions may differ and therefore be working on a far different valuation style. In these situations, laundries with certain circumstances will require added discovery and valuations. All this said, a greater opportunity awaits your ongoing investment.

In our example, we are using the base level investment scenario. A clean laundry, with good working equipment, free of serious deferred maintenance, with a model level lease. The primary elements of value are within preferred guidelines, which will become clear to you as we continue.

There is an added value that comes from your own efforts. There are elements that if you modify and improve them, you will increase revenues and better enjoy your business. If you were running the business with only the minimum efforts, keeping the laundry clean, the equipment running, having the laundry well-lighted and safe for your customers, then the business should continually perform and improve. You must also maintain the lease. Given all of that, then this above example represents the minimum return that you should expect.

Your first challenge is in understanding the caveat and having a plan to correct any issues related to it.

Is this investment safe? Yes. Since it is likely, looking at the above example, that the business would still be valued at or above the $150,000.00 that you originally put down; there is only minimal concern. Only the loss of the lease, which is largely within your control, or an atypical market change would hurt you. So, the fact is, that even in a situation where the owner has been neglectful of the business, the 20% cash on cash return is still likely. Quite frankly, if the full experience were less than this level, the buyer would likely have made serious errors from the beginning, possibly failing to do Good Laundry Diligence and/or have failed in discovery and been unaware of many things, including how the business works. Or possibly had been taken advantage of during the transaction. Yes, this all happens. Clarity and awareness are critical elements of the acquisition.

The laundry industry is well solidified and part of American life. It is a very stable industry. As new investors enter the business, many will do well, and others will do poorly. Only some investors will see the larger opportunity that this business has to offer. For those that do, the opportunity is huge.

The opportunity to make a fortune is realistic, even for those who enter this business with minimal investment. Of course, you may make either more or less than the example given in this text. Within two, five, or maybe ten years, you could be owning and operating three or more laundries with a tremendous cash flow, without digging into your own pockets for cash and still only using a minimal amount of your personal time.

This business stands alone in its general availability to any investor because of a continuous turnover of the laundry for sale inventory. This keeps the opportunity very healthy. There are specific laundry investment timelines that must be understood. Many influences will need continuing consideration; the costs moving forward can also be very high, so the need for forward planning is essential. You are not buying the history. You are investing in your own future. History just sets the limits of the current value. Don’t purchase a laundry without an understanding of the path moving forward throughout the next ten years, and beyond. Limiting your discovery to the business’s history can be self-defeating.

For this reason, planning and projections of the Forward Model System should be done prior to closing of an acquisition of a laundry business and you should be very realistic. The laundry business is very predictable once you understand it. There are also many physical elements to consider during the transaction.

A little groundwork. A laundry is built into a location with planning and a tremendous amount of expensive groundwork; electrical and other equipment is placed, the gas meter must accommodate the volume, sewer lines are placed in the ground throughout the washer area and lots of water needs to be delivered. The equipment has a useful life of about twelve years. However, the laundry itself is intended to last fifty, seventy-five, or a hundred years; literally until the walls crumble around it. Yes, I’ve seen it happen. You need to develop good projections to predict and justify the forward position of your business and the necessary associated costs of any upcoming redevelopment.

The laundry investment lives and dies by a timeline. The life of the laundry and its model are designed to undergo continuous change and improvement. A laundry starts out fresh and grows to its best, it stabilizes and operates for seven to ten years with very little reinvestment of time or capital. At that point, without intervention and some amount of new investment and effort, the laundry will start showing signs of deterioration. If left unattended, it will eventually result in a loss of customers, increased expenses, and a growing reduction in profits. Failure to deal with aging equipment and infrastructure could result in the business’s total failure unless there is that intervention.

Laundries that are bought mainly for the cash flow are seldom rewarding investments. Eventually, deferred maintenance and the related issues will make this business burdensome. Many sell their laundry at this point; before suffering any loss of the original investment. It is largely for this reason, that bigger opportunities in the laundry business are so available. There are many procurable laundry investments because so many people buy laundromats without a sufficient understanding of the business.

The industry has always been good to those that understand it, but laundries today are now riper for advancement than at any time in history. The pay systems are changing. After seventy years, we can take credit cards, use a phone pay app, and still take the coin. This may seem like a simple thing, but it is huge. The term Coin Laundry no longer generally applies. These businesses are most rightfully known as laundromats, which disregards identification associated with the pay system. This single advancement is also a very good place to start explaining this business to you.

The current transformation of our business model has been underway for over thirty years; from coin to card or any simpler pay alternatives. The appliance industry, on which the laundry industry depends, responds well in some areas but has been very slow in the marketing advances that are specifically needed for commercially vended washers and dryers, and they have left innovation to those who specialize in this field. Fortunately, today many of the manufacturers are responding.

The laundromat industry with current projections ranging from 30,000 to 40,000 or so laundries, had not offered the volume of sales to the manufacturers, compared to the consumer market, which is enormous. The volume was just too small for them to do the research and development. In fact, until recently, it has been looked at as a two-edged sword for the manufacturers. More laundromat users equal fewer washer and dryer sales to consumers. Consider that in a laundry, you will have anywhere from a low of about ten to as many as sixty weekly users of a single machine. Compare that to the enormity of the residential market with more than a hundred and twenty million households. It is like comparing a car to a bus. However, the advances made by those that have taken this business seriously have caused much interest and competition amongst the manufacturers. Washers today are bigger, more sophisticated, and dually applicable with the larger commercial market including the hotel and medical facility applications. The average cost of a washer in a laundromat today ranges between $5,000.00 and $6,000.00, varying by the individual laundry’s chosen par capacity. So, the industry is now taking us much more seriously and results are being felt.

Over the years, the most noticeable advances have come from the increasing percentages of front-load commercial washers versus the traditional top load. These machines are generally better built, do a more thorough cleaning and offer more wash options, with a much lower amount of water consumption. Over the last thirty-five years, these machines have gotten bigger, more efficient, and are now more prevalent. These advances have set the laundromat apart from the home and apartment laundry rooms. The laundromat can now boast a better-quality wash. It also offers convenience and opens up the possibility of multi-tasking to the customer. We do not have a sense that the laundromat will become dominant over the household washer. It is typical for the laundry customer to use both the home or the apartment house washer and supplement with using the laundromat. This is the new thought being realized, as laundries improve. We have an opportunity now to expand our market.

Laundry stories. Only in the mid-twentieth century did we first see the introduction of the mechanical pay system. This was a huge endeavor. This ability to pay at the equipment allowed for the self-service laundry to become unattended. Washing machines at the time, a relatively new advancement themselves, were not designed to accommodate a pay system, and the laundry industry manufacturers were not convinced that the volume would justify the expense of the development. They were too busy building domestic use washers, which had become a rapidly growing market. So, independent entrepreneurs motivated by what they saw happening (the growth of the multi-tenant housing market), went to work and figured out how to install a meter on the washer and dryer requiring payment before washing. Once this was finally figured out, the vended washer was immediately placed in locations; one after another at an amazing rate.

Today, new coinless pay systems are a tremendous benefit to the laundry owners and their operations. Together with the modern washer’s programmability options, a laundry owner can offer multi-level pricing, varying prices by times of the day or on certain days of the week, control the water use, the actual wash times, and even monitor and correct individual machine performance. Laundry owners can now remotely change vending rates, conduct diagnostics and even make certain corrections from their phones.

What makes the laundry business an American Dream? Many fortunes are made in the laundry business and almost anyone can make it happen for themselves. This is a very unique industry and a broad-based opportunity for success and financial independence. The laundromat is the best of the American Dream because it offers an opportunity to anyone who can come up with a modest start-up investment. The opportunity to own and operate a business, while not needing to resign from a job or inconvenience yourself is a dream come true. Fortunes are being made every day in this business, with many people owning three, five, twenty, and even hundreds of laundries, in some cases. Many people I talk to are surprised to find that if done well, in five to seven years you could realistically own two or three high cash flowing laundries, with an initial cash investment of under $200,000.00. You are about to learn how to do that, right now.

What should you expect as a laundry owner? The owner of a laundry business will enjoy the benefits of free time. The laundry requires only an average of about four to six hours of your time per week at the location and in some cases less. The returns on your cash invested should start in the 17 - 22% range. This is reflective of the cost of resolving the deferred maintenance. A good operator should be able to substantially improve from this level. First, you must understand the investment model. You will need to have sufficient resources, buy wisely and then follow a good operating model. You will need to be continually diligent in the operations. If you do this and remember the most important thing, which is that you are operating a Community Service Business, your level of success will likely grow greatly, determined by how well you choose to deal with that one important thing — the community.

The laundry business is grossly misunderstood by more laundry owners than those who do understand it. Many operate a good clean laundry but fail to make the profits they deserve. Why? Through my thirty-five years of experienced observation, I can say that, of the hundreds of laundry investors that I have known and worked with, those who did not exceed the 17-22% level, failed due to a lack of understanding of the laundry model and what needed to be done to advance and go forward successfully or, they failed in doing a laundry specific diligence. Some even knew what was needed, but then failed to act. It can be true when stating If you build it, they will come but many more will come if you build it better.

The goal of this book is to share the secrets and the realities of buying, owning, and operating a successful laundry. The single most important thing to remember is that, to a laundry owner, the laundromat is first and foremost a, Necessity of Life, Community Service business.

Your success will also depend on how well you understand the investment and its operating strategies. Through the laundry model, you can learn how to manipulate the market and both act on, and benefit from this knowledge. First, you must make certain to buy the business with an understanding of the value and the forward opportunity. We will be looking at examples of laundries that in some cases succeeded and, in some cases, failed.

The following is a list of our discussions:

Laundry Investing

The Opportunity

The Investor Profile

General Discussion Issues

Various Categories of Laundromat Investing

Understanding the Elements of Value

The Location

The Lease

Infrastructure & Equipment

The Laundry Search

The Laundry Model

Discovery & Doing Diligence

Laundry Financing & Other Resources

Return of Investment

How to Invest in a Laundry – Part 2

Operations & Management

The Management of the Investment Model

The Formula for Multiple Laundry Ownership & Expansion

The Exit Strategy

Laundry Investing

Stop! First time buyers of laundromats, it is strongly suggested that you do a deep study of this industry before beginning to conduct your search. Many new buyers begin their search by looking at one of the several online sources for business opportunities. They will see something with a price tag that looks viable and then contact the seller or broker. These meetings typically result in misconceptions about both the particular business of interest and the laundry investment model itself. Furthering this, sometimes relationships are established with brokers, who will begin sending you to various laundries. At this point, after looking at a few laundromats, things may begin to seem confusing. This can, and often does, result in an acquisition that one may later regret. It is also a fact that many likely investors end up not investing and moving on due to these misunderstood reasons.

It is highly recommended that you learn as much as possible about the business and industry before conducting a serious search.

How to buy a laundromat? Step 1-A. You need to know what laundromat investing means to you. The laundry as an investment is misunderstood, even amongst many current laundry owners. This is especially true for those first-timers entering the business. So, before going further with the step-by-step approach in buying a laundromat and before I give you all the scary stuff (we will save that for later), let me give you a guided tour through the rewarding experience of laundry investing.

I recommend that you visit as many laundries as possible during the time that you are studying the industry. Keep track of the laundries you visit and make notes. Keep this period exploratory. Gather data, learn how to figure out the age of the equipment and the income information and ask price as a point of reference until you feel more prepared. It can be too easy to get excited about some of the opportunities. Many people jump in before knowing what they are in for and later become very unhappy. Take time to get to know the laundry brokers, the distributors, and owners. Once you know the players and know what you are looking at and looking for, you can get as aggressive in your search as you like. Begin by giving yourself an education. Look at a half dozen laundries or more, while studying this book and making notes. Making an offer before knowing what you are looking at can cause you to miss opportunities. You may pass on the best opportunity for all the wrong reasons. Worse, you may buy one and realize later that you made a serious error.

In your search, remember this. A laundry doesn’t need to be listed for sale to be available for acquisition.

THE OPPORTUNITY

What should you expect from your Coin Laundry Investment?

The laundry business offers many things to its investors. The most favored advantages include the free time that owning a laundry business affords. The cash-flow is also very good, potentially extremely good, especially considering the minimal amount of time and capital that its owners are required to invest into the operations. These businesses are very easy to operate so long as you understand that the laundry you purchase is more likely to be headed in the wrong direction than the right. It is very likely coming from its best days and is now facing the issues associated with aging equipment and a tired operating model. To enjoy the well-touted benefits of laundry ownership, you must investigate and discover the deteriorating elements, and know how to correct them and what it will cost. Then you must commit to doing the work. This is how you create the laundry that will carry you into your future.

The reality of the cash returned by a laundry investment is generally anticipated to be about 20% Cash-on-Cash ($100,000.00 invested returns = $20,000.00 annually). This is true in most larger markets. This level of return is quite realistic. In fact, this should only be the beginning. It is only the starting point of the available earnings. If you are buying correctly and perform a good laundry diligence, plan well, and implement a solid and sustainable operating model that backs up your investment, you should be looking forward to much higher returns.

If you follow some simple guidelines, you will experience a far greater return on your investment than you might now imagine possible. You will probably discover that you, like other investors that have come into this business and really do get it, will never leave it. Fortunes are made, families are given security, and the discretionary cash is generous. The amount of free time afforded to a laundry owner is enviable. In times of economic disaster and other difficulties, the laundry investor will have greater stability than more vulnerable industries, a continuing cash flow, and even an increase in growth. This was true during both the Covid-19 pandemic in 2020 and the financial collapse in 2009. Laundry owners that took care of their customers during those times continue to flourish. After all, the laundromat is a "Necessity of Life" business.

Many laundry owners buy and sell several laundries throughout their career while others will stick with the