I was wondering if I can get some advice from an experienced laundromat owner.
The laundromat that I want to purchase is only $10,000. There are currently 12 Continental girbau eh020's four of them are down, but I can fix them.
There are four 40-lb Continental girbau L1040s, one of them is down with an alarm L.
There are 24 ADC stacked dryers and about 10 of them are down.
The owner has neglected the place for about 4 years because he works 70 hours a week at another job. He overpaid for the laundromat when he first purchased it.
He claims the place makes about $40,000 a year gross income. The rent is $1,450 per month and utilities are about $800 a month. He has been very transparent with me and has given me access to the surveillance cameras in the basement to come and look at whenever I please to see how many customers come in on a weekly basis.
My main concerns are the machines. They have been used thousands and thousands of times, are they on the verge of completely needing to be replaced?
When I opened up the menus up some of the machines, I can see how many cycles the machines have gone through in their lifetime. Some of the machines have gone through twelve thousand Cycles even as high as 17,000 Cycles. They seem to be running fine, a handful of them Shake pretty violently on the spin Cycles towards the end. Do you guys think it is a good investment? How much longer can these machines last if I take care of them?
Answers
Anonymous
Bad idea Laundromat won’t bring you any profit
ibu guru
1. With that rent & utilities costs, $40k gross is eaten up with expenses. You have only $13k/yr for all your other biz costs.
2. Those machines are close to or beyond their useful life, which is why the place isn't used much. People avoid laundromats which have many machines out of order, or are dirty, or lack cable TV + free wifi, or lack a good supply of folding tables and comfy chairs to sit while waiting for wash-dry cycles to finish. Expect massive costs for new machines, upgrading facilities, staffing to keep the place clean & orderly & safe.
Obviously a really bad deal, unless you want to buy cheap & invest in a serious upgrade of facilities. Expect to at least match costs to buy a good, money-making business fixing this place up.
NONAME
laundromats seem to be a safe bet...more people..more apartments...need for laundromats are not going to die soon
Casey Y
Laundromats are very risky businesses...
Could you buy the business and liquidate for more than the purchase price? If not...don't buy these machines...
A Hunch
Transparent means he gives you copy of the tax return and other financial documents, not letting you view how many customers are there at a given time.
Gross income doesn't mean anything - what is the profit?
$10000 is not much money, as long as you aren't buying any debt.
Do you have money to make the place better - fix the appliances, clean it up (new paint/flooring/good lighting)?
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