Potential Purchase Advice

[remy]

I just wanted to hear from some of the veterans on his board, before delving much deeper into possibly purchasing a laundry mat. There is a small 2,000 sq ft. laundry building located directly across the street from a small regional college. In the area adjacent to the laundry, there is a mix of small apartments, rental homes, duplexes. The college has an enrollment of approximately 4,200 students. The city itself has approximately 15,000, with a mix of incomes, and has steady growth.

The owner is asking around 100,000 for the building and all the equipment. However, I have a ton of due diligence to do on the project. I am more interested in the laundry paying for the property, which in my opinion is a prime commercial piece. Also, I own a self serve car wash in the area, does anyone know if the amount of time involved is comparable?

Lastly, alot of the equipment is run down but functional, and there is zero vending. I am going to watch the laundry this weekend and do a crude customer count. Also, is three to five times gross, as in the car wash biz, applicable?

Looking forward to hearing from all of you.

[KJD]

Three to Five times gross? I will sell you mine in a heartbeat.
Maybe two to five times net.
How much time does it take to run a car wash?

[remy]

For my car wash I have a part time attendant, who puts in about twenty hours a month. I supplement the clean up and maintenance with another 10-15 on site hours.

Does that help as for as the time involved comparision?

[William]

I own 4 laundries and one carwash.

First off, the "rule of thumb" for a car wash is 2.75 times gross.

Secondly, if the property is the main attraction, then just decide if the laundry will tote the note. If so, then you can make your profit on the sale or redevelopment of the property.

Personally, I like to tote the note and make monthly cash flow.

As far as time is concerned, I would say they are similar, with the laundry requiring a bit more time on your part. Be prepared to be the repairman for not just six bays, but about 40 machines. Also, there is little, if any, overlap between the two as far as skills are concerned.

Good luck!

[remy]

William,

Thanks for the insights. While everyone touts 3-5 times gross for the value of a car wash, I think your 2.75 is more realistic of the true value. Luckily, I purchased mine for a touch under three.

[ericnyc]

I own 4 laundries and one carwash.

First off, the "rule of thumb" for a car wash is 2.75 times gross.

Secondly, if the property is the main attraction, then just decide if the laundry will tote the note. If so, then you can make your profit on the sale or redevelopment of the property.

Personally, I like to tote the note and make monthly cash flow.

As far as time is concerned, I would say they are similar, with the laundry requiring a bit more time on your part. Be prepared to be the repairman for not just six bays, but about 40 machines. Also, there is little, if any, overlap between the two as far as skills are concerned.

Good luck!

Do you have a full service or self service car wash. If you were to go into business again would your prefer car wash or laundromat? Also, did you ever consider buying gas station?