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Old 03-19-2016, 02:04 AM
tnsr35 tnsr35 is offline
Join Date: Mar 2016
Location: El Monte, CA
Posts: 22
Default I just opened escrow on my first mat

I'm purchasing a mat that the owner was asking for $180K which as been in on the market for just over 6 months.

I looked at two years of tax returns in which the seller is grossing $120K. After expenses he's taking home anywhere between $3K to $4K. Which is similar to other mats I have been interest selling for about the same price or higher.

The first question I started asking was why are they trying to sell their mat and a bunch of other questions and based of their answers and my research is how I factor how much I'm going to offer. For this mat the owner is older and wants to retire and he wanted to do it quickly.

So I came in and made my offer of $90K with $40K down and asked for for seller finance of $50K. Well we went back and forth and since he installed 22 new machines he had a loan he need to pay off. So we settled at a price of $120K with $60K down and he would do the seller finance of $60K for 5 years at 5%.

Well the sellers agent wanted to charge me $15K straight up interest on the $60K. Which is $3K each year at the 5% interest, amortized loan I would be paying just under $8K. I work for a bank and I soon as the sellers agent told me that I was going to be paying $1,250 a month for 5 years, I knew what he was doing. So I was like hell nah I'm going to pay all that interest since I had already done my math and my amortized payment would be just over $1,100 a month.

We were in a conference call so I told my agent that we needed end this call now and him and I needed to talk. After I told him I wasn't going to go for that rip off, but if that's the way they wanted to charge me the whack off interest then I would be counter offering the price and bring it down to $100K with only $40K down and then they can finance the $60 with their whack off interest calculation.

So my agent said OK let me call the sellers agent and tell him what you said or see what I can work out.

2 hours later he calls me back and tells me, you're ass going to love me for what I just pulled off.

So this is what I ended up agreeing to.

Selling price $120K
Down payment $60K
Seller finance $60K for 5 years with monthy payments of $1,050
So total finance amount I will be paying $63K for the 5 years
on top of that the seller will be paying the fire insurance for the next 5 years or until I payoff the loan. Which I know is not much, but if he doesn't purchase the fire insurance I get to buy my own and deduct that amount from my monthly payments as we agreed.

on top off all that all his washers are under priced. I have check other laundromats within a certain radius of the one I'm purchasing and the front loaders are lower than the other mats anywhere from 0.25 cents to $1.25. Like the 20lb front load I have never seen a mat with a price lower than $2 and he currently has it at $1.75.
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Old 03-19-2016, 08:23 AM
Coinwash's Avatar
Coinwash Coinwash is offline
Head Administrator
Join Date: Oct 1999
Location: NY
Posts: 2,967

Ok now what is the commission to your broker?

Remember this the broker does NOT buy the Mat YOU DO ....

Now this could be a Great deal, but it all up to you, and it's your money

I see you did some of this check list below which is good and smart.


Information for prospective Laundromat buyers.

You never pay more than 3 to 3.5 X the net.

Always be ready to walk away.

How far are the closest Laundromats?

You must look at the Tax returns for the past 3 yrs.
No one would lie to the taxman and say they are making more.

Everyone tells everyone they take from the top.
This is wrong and should not even be taken into consideration.

To me thats a RED flag!

Dont go into this unless you are ready to work hard. This is not an easy job. You dont just collect Quarters!

I tell people to go to the Laundromat they are looking to buy, with a bunch of towels to be washed and dried.

Dont open your mouth. Sit and watch.
Plan on staying there a while. Be a FLY on the wall.
Watch, look, and listen. Remember, no matter how hard it is dont talk to anyone there.

Its not fair to the seller or to their employees.
Now I dont mean for you to go just one time. I am telling you to do this for at least a week or two. (Maybe every third day).

If you do buy this Laundromat, believe me you will be spending more time there then a week or two.

You are spending your hard earned MONEY.

Try not to be an obvious neophyte

Good luck.

This is only my opinion. You do what you think is right; Follow your business instincts.

The Financials

Sellers stated Profit and Loss Statement
Water Bills (last 12 months)
Electric Bills (last 12 months)
Gas Bills (last 12 months)
Parts? Receipts on repairs? Service Contracts?
Tax Filings?

The Assets

Washers and Dryers / Make,Model/Yr/PriceVend
Water Heater(s)
Condition of Floors
Condition of Counters/Tables for Folding.
Vending Machines
Soda Machine
Soap Machine
Candy (Gum/Bulk) Machines
Pay Phone
Video Games
Changer Machines
# of Carts/ Baskets
Alarm System
Which Alarm Company is being used?
What type of service is in place?
Can I see the contracts?


Which machines are owned?
Which machines are leased?
Vending Lease Contracts/Agreements?


Who has been providing equipment upkeep and service?
Any Contracts/Agreements?
Who has been supplying vending goods? Soda?
Who supplies the video games?
contracts? Agreements? Whats the cut?


Liability Insurance
Hazard Insurance
Current Insurance Carrier?
Any problems with insuring the place?
Get the current insurance contract, check for clauses.

The Employees

# Of Employees
Hours and Pay
Contract Personnel? Salaried? Hourly?
Are they willing to stay on after purchase?
How long have they been contracted/employed?

The Legal and Corporate Issues
Accounting Fees
CPA Costs Annual / Quarterly Reports
Legal Fees?
Business License Cost

The Companys Contracts and Leases
Vending Contracts/Agreements?
Supplier Contracts/Agreements?
Video Game Contracts/Agreements?
Alarm/Security Company Contract/Agreements?
Any Insurance Contracts/Agreements?
Property Lease Contract/Agreements?
Equipment Service Contracts/Agreements?

Property Lease

CAM Fees cost / what is included in the CAM Fees
how are CAM fees divided amongst tenants?
Who determines CAM fees and items?
What percentage of fluctuations in CAM fees in
the past or foreseeable in the future?
Can I get a breakdown of the CAM/ RE Insurance / RE Tax?
What is personal property tax?
Current Lease
Lease Increase Rate
Lease Expiration/Options
Lease Deposit

The Suppliers

1. Vending Suppliers? Any Contracts?

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Old 03-19-2016, 03:48 PM
mike's Avatar
mike mike is offline
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Join Date: Oct 2002
Location: montreal
Posts: 2,781

I guess the $120,000. Gross is per year,

And I hope the 3 to 4k net is monthly!?
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