Question on opening a new laundromat

[agilardi]

I am a real estate developer with no prior experience in laundromats but I do have plenty of experience running retail.

I own a land in Bronx, NY with no laundromats close by. There are lots of existing 5 & 6 story rental apartments around and right across from my lot they are building a 120 unit apartment building. I already have contsructions plans to build a 7 story building with a commercial space on ground floor and 21 apartments above.

I could however, change my plans and build a 4 story building with a 4500 SF laundromat and 12 apartments above. The construction of this building would cost me around 2 MIL which is around half of the cost of the 7 stroy building and the rent that I would be able to collect from the apartments would cover my entire construction financing (Since I already own the land).

I was wondering how many machines should this facility have and what type of return should I expect from it. Also if I do decide to sell this laundromat instead of running it how much would I be able to sell it for?

[ajay]

your question(s) are mouthful. I would take one step at a time. You're in the realestate business, so look at it from that prospective. You can easily make a retail area and then rent out the location for a potential MAT. Current customer are getting their laundry done some how!! It's all about convenience for penetration. So I would look at the current area of mats. since you're surrounded by apartments, this is a good sign.

Your ROI : will depend on the worth of your business when it's up and running. Typically it will cost you $100-$150/sqft. Steel has gotten expensive. Machines are not cheap.

Your equipment distributor will do the demographics for you and likely finance 100% since you will own the building.

Gold Coin (dexter) is a good distributor to work with in your market.