Thinking of buying---any advice?

[Anonymous]

Hi,
I'm seriously considering investing in a laundromat and have yet to find anywhere (or anyone) that will discuss the pros and cons with me. Any feedback or advice that can be passed along is greatly appreciated. Thank you in advance!

[Kitty]

Hey Jimmy,

Lots of pros and lots of cons. Search the threads as there is tons of info within the site.

Give us a synopsis on why you want to jump in and if your considering new or purchase exsiting. What do you think you could bring to a mat business that might lead you to having a competitive advantage over the current facilities.

[Anonymous]

Thanks Kitty,
I'm looking to purchase an existing one. While not specific to the industry, I have a ton of experience in customer service and I believe a friendly atmosphere (unlike the ones around me!) and good customer service will bring repeat customers. I also have some little things I'd do differently that I think will attract customers. I'd like to be completely hands on (with my wife) and don't buy into the theory that you can just buy it and you'll make money (if only everything was that easy). I'm just nervous that there is something I'm overlooking that could be disasterous and I wanted to make sure. Thanks for the reply!

[Kitty]

Research the area of which you are searching, if it is saturated with mats? Who are the customers and what is the median income per family? Find a mat for sale and seek specific info on what you are considering to purchase or find a mat that may be worth seeking the owner out to buy his mat. Any unattended ones in good locations that have been unappreciated too long? Take a drive around the areas you would consider without going too far from home.

kitty

[mike]

jimm6gun

I think what you may be overlooking is the entrance fee: $100,000.

I know people have done it for less, but the more unencumbered capital you have, the better your chances for success.

Knowledge and hard work ethic is NOT enough, (just ask Kitty)

[Anonymous]

Thanks Mike.

I'm planning on putting 50% down and getting a loan for the other 50%. Any thoughts? Would you recommend buying the whole thing outright?

[Anonymous]

If purchasing the real estate make sure you have a survey done first.

[mike]

Jimm6gun,

Keep half of the price out, it will give you some leverage if there is
a problem with the previous owner/sale.

It will also leave you money to upgrade.

Buy the location if you can, but only if you are 100% sure this thing will fly !

Best of luck

p.s. I love San Francisco !
(I spent a summer there in 1967, growing hair, and smoki...........well, you know)
Haight-Ashbury and Potrero Hill rock !

[Anonymous]

I actually live on Haight Street! May I ask you why you think buying the real estate is so important? Thanks!!

[JBTcajun]

In my situation I purchased the lot. Building the structure myself, have good contractor friend on retainer consultant. I will wind up with about 5k more than what an average build out on leased property would be. With the low interest rates at 15 years my note will be less than the going rent is for equal size 2800/sq ft. I will be building my equity not some landlords. With th owning the land and building I could get all the equipment, including vending etc with only taxes for down payment. (wascamat) We chose not to do this as lower note make better chance or sauces.
An existing store seems to be a better bet if you can find one. It has a tract record, immediate cash flow, no wasted 6 months to get started. (thats allot lost income).
Do what is best for you.

[Gary C]

I think it's important to own if you can.

In fifteen years I will own the building out right which will add 300k or so to my assets. If you rent you have no realestate at the end.

there is no landlord that can throw you out.

Another reason no rent increases other than taxes.

I will only buy a building in a good location so I don't worry too much about weather or not the laundromat will make it. You can always rent out the building out. All that being said Sometimes the building just is not for sale and you have to rent. That would not stop me from looking at a good deal.

Gary

[Kitty]

You real estate owners with a mat biz.......How long (what year?) has it been since you purchased the real estate? Was the biz a start up, acquired or upfitted mat?

If not to personal, how much more than the mat biz was the building estimated to be at the time of sale?

[Gary C]

I leased with option to buy. That way it was my choice and it was easier to get money in stages. I financed almost 100% so it took a little longer. I got lucky the building only cost me 1/2 of the cost of the mat. I did this in 1999

Gary

[srhaz]

Owning both you have the option in the future to sell the business only and then just sit back and collect rent for your building.
Nice retirement thought.

[mike]

Well, I guess everyone gave the reasons for me !

Mats are not portable businesses. (unlike almost every other)

You build up a business, you don't want it taken away by the landlord !
(this happens all too often in this business)

You need to scope out a good location for a mat, but like Gary says, a good location for the real estate is equally as important.

Existing mat is good, if you can see improvements YOU could make.

p.s. I'm available for a personal consultation for the price of airfare & a cheap room !
(as soon as the snow hits here, I'm ESPECIALLY available !)

[Anonymous]

Originally posted by Jimm6Gun
May I ask you why you think buying the real estate is so important? Thanks!!

To me it's a no brainer.... you have much more control, more options, you are building equity rather than supporting your landlord. If you get tired of running the mat you can lease / sell the business and just collect the rent. It's easier to get financing if you own the real estate..... i could go on and on