Newbie needs HELP

[eoffiong]

I am interested in getting into the coin laundry business and have found an opportunity that I am not 100% sure on .. Any comments or input is greatly appreciated.

The numbers are
Gross Income = 10-12K monthly
Expenses = 8k
rent is the highest expense ( 2.4 k + 800 CMA )
Net = 2-4k monthly

It has 24 dryers ( 7 yrs old) and 31 washers ( average age = 5 yrs)
Lease has 7 yrs left .
There is an obvious need for updated dryers ? maybe a couple larger washers
Owner is asking 75k for the business or a partnership that will involve about 30k deposit and the ability to finance about 100k in updated equipment .. since his situation does not currently allow him to obtain reasonable financing terms on his own..

The partnership does sound interesting, but I am worried about the long-term results of a partnership. Any thing in particular I should look out for in a partnership deal ?

What about the purchase price ? Over priced ?

[mike]

More specifics needed about equipment.

Why are you saying 7 year old dryers need to be replaced.
(unless they are NOT stacks)

The difference between net of 2k or 4k a month is large
(even assuming those are based on correct gross)

If the store was making money, he wouldn't have any trouble getting financing to replace equipment from the manufacterers

You need someone with NJ experience
(although $75,000 doesn't usually buy much in NJ, maybe a hit or two;-)

[eoffiong]

The dryers are not stacks ...so I was thinking of replacing a couple with stacks to maximize the space ..

I am using a net of 2k for my calculations .. You do have a good point about the financing aspect .. The seller told me that it was due to his current high debt to income ratio ...since he has other businesses.

Any thoughts on the partnership deal ?

[Coinwash]

Is you partner going to wash- dry- fold as you're going to do too??
Are you willing to split profits? Maybe your help will take home more than you at first??
Remember this is not an easy job, where you just collect quarters.
You and your partner are going to fix, clean, wash and stay up late nights.
Now again why is this person selling?
I happen to enjoy this but then again I'm not married and I just have a dog--LOL ;)

Good luck

Coinwash Staff

All or nothing.

[Rich]

From what you have said the price sounds good to me, if you have verified income. The lease is a little short to be going in there and dumping a lot of money in it though. When I bought my store there was only 5 years left, first thing I did was get new lease 10 + 2 5's. Then put money in it. Similar setup as yours , 32 Washers 24 Dryers. Replaced 7 singles with stacks. Has worked out well. And replaced some washers.
As for partners, no way for me. All or nothing.

[pete f]

I agree with Rich on the partner thing, though it can work in some situations.

The store, not enough info for me, and really, it may be more a local situation that is good for you but bad for me.
Rents more than 25% of gross tend to be to much, that I can say, but a higher volume store it is not so much an issue tha a lower volume one.
5 year old washers and 7 yr old dryers should have much life yet, though again, I do not know what you are dealing with. The price at about 3 times net is not to bad in overall perspective.