Looking at purchasing 20 year old Laundromat

[Eleanor]

Laundromat has been running for 20 years in a small town of about 7000 people.

nearest competition is 20km away

Population goes up to 20,000 in the summer months due to cottagers and camp kids.

Asking price is $200,000 includes building

All the machines are 10-20 years old

8- Huebsch top load washer
4- Maytag Large front loading washers
4- Maytag Top loading washers (2 NOT WORKING)
10- Hoyt Windsor 1 Dryers
4- Wascator washers NOT WORKING
4- ? Double Load washers NOT WORKING DUE TO LOW WATER PRESSURE


Maintenance of Equipment $2,313.59
Labour $10,886.19
Insurance $1856
Property Tax $2300
Supplies $2222
Telephone $912
Hydro $3100
Sewage $3263
Propane $13,000

Total expenses of 2006 $50,737.14
Total Gross of 2006 $69,850.00


I could eliminate the $10,886 of Labour by splitting this between my spouse and I.

I am mostly worried about the age of the machines are they worth it?

[lindhdg]

How many square feet is the building? I would find out how much the building is worth so you know how much they are charging for the business. Treat them as two separate entities. The business side of it is not worth much given your evaluation of the machines.

[pete f]

If the washers are 20 years old then some should be replaced within 5 years. Having new equipment that works is a key to running this business. They have a going business now, and mats are valued on how much they generate in income, not so much the value of the equipment. With real estate you need to find out the value of the building, and guess what it should rent for, then apply this ret to the income / expense to determine what the mat really makes. A rough estimate I use is a 10 year payback when using the price of a mat and building combined. This seems to be in that general range. If you live nearby and want a little business than it could be a nice little investment. You need to know more about the water situation.