New Opportunity

[anonymous]

I have an opportunity and maybe the the only opportunity to open a brand new Wascomat Equipped laundry (2250 sq ft) and build it from the ground up in a strip mall that is owned/built by a personal friend of mine.

The problem is that there is a small old, dingy (but clean) outdated laundry not far away (approx. 1/3 mile) with no room to expand. Then there is a good size, old, dingy (but clean), outdated laundry (approx. 3/4 mile) with room for change. Neither for Sale

Question? Is their money to be made with the nearby competition? The demographics is largely Hispanic with 64% renters in a 1 to 3 mile radius. I am definitely putting in vend & games.

Please advise. Construction on the strip mall will begin in January. There won't be any construction costs to me only the finishing costs (i.e. flooring, painting, equipment, signs, etc.).

[pete f]

Make the small mat owner an offer he can't refuse.. tell him you are going to put in a new mat and would he reconsider selling.
Is a new mat going to do well? I would not know without demo and drive thrus and other reserach. Don't kid yourself about construction costs. 2250 SQ Ft still going to cost a few hundered G's to put together if you are very lucky. What about impact fees?

[anonymous]

Construction cost will be covered by my (inteligent, wealthy) friend/owner/builder. He figures that since he is building the strip mall he can supply the laundry space that he has set aside with what it needs. He is also covering the impact fees which is surprisingly small by the way.

Furthermore, he is helping me invest in this business thus buying an existing mat is an option that has been ruled out. He studied the numbers and believes the ROI will not be supported in 5 yrs. He, his wife and I have looked at several mats that were for sale. He believes that going this route would be more practical in the way of ROI.

In addition, I have brought this concern to my distributor. They believe the demographics show in favor of another mat.

So, I guess the question should be. Can money be made in a densly populated Latino neighborhood?

[Kitty]

Whats the old saying about bears and woods? :)

A densely populated area in any community that is economically challenged is the goldmine for a laundromat. If your location is superior than the older mat you will have a competitive edge, as you will with new equipment. Going into a brand new center may be a great drawing card, what other types of businesses are scheduled to go in with you?

[mike]

two caveats,

Your "friend" won't be, after the first disagreement.

Having a friend be your landlord is "iffy"

(I know, "he is your good friend, and nothing will ever come between you". Just let me remind you that 50% of marriages end in divorce, but no one thinks that on the wedding day :-)

Your landlord/friend seems to be holding all the cards, which means you will be holding few.

And your distributor thinks the numbers will support another store :-0
Color me flabbergasted :-)
(I've never met a distributor who didn't !!!)

[pete f]

A densly populated area is probably densely popualted with l'mats, you have no real edge. You have to determine if there is a need for the one you want to put in. I wonder about this line >>He studied the numbers and believes the ROI will not be supported in 5 yrs<< Why?
Also, I would worry about another line you wrote>>He, his wife and I have looked at several mats that were for sale. He believes that going this route would be more practical in the way of ROI.<< It sounds like THEY want to own a mat, what room does that leave you? This goes on Mike's questions. It may be a great place, great deal, who knows. Maybe hire a local professional to assess it for you. And definatelty a lawyer for your lease with your friend. Define who pays for the 40k worth of plumbing and electric work needed for the machines, that kind of thing.

[MichaelCa]

>Mike wrote: Color me flabbergasted :-)

...roaring with laughter over here !

[anonymous]

Thanks to everyone for their thoughts and replies. I just love this forum!

I will look at the area and see if it will support another laundry. Good point. This is the kind of advise I am really looking for.

Of course I will also have the lease checked before signing. I will be incorporating.

In addition, my friend owner is picking up the costs of construction since he feels that it will be all factored in at the time of building. He would be hard pressed to pick up the cost for electrical, plumbing, etc. if the building was already built. Plus, he understands that I do not have a huge amount of cash to put down and all I have to do is handle the equipment and finish work.

NOTE: my friend works on 5yr business plans and it hasn't failed this well seasoned multi-millionare. He is really trying to help me get my feet in the door and no he doesn't want to own a laundry mat. As he puts it he doesn't like retail.

The ROI does not work because I do not have a huge sum of cash to purchase existing laundries. If I take out a (5 yr) loan for the balance, all revenue after expenses would go toward re-paying the loan. Also, when equipment breaks down he feels there will not be enough money left. Thus, I will not see any money in my pocket until the loan is paid off and by then I will need to re-tool the store. According to him.

I hope this answers the question. PLEASE KEEP UP THE GOOD WORK IT IS TRULY APPRECIATED.

[anonymous]

friends are friends business is business, make sure everything is in writting, long lease ect. And you should get ROI in five years, also there is always compitition just make sure you are the best and take care of the customers, its that easy.