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  #1  
Old 03-25-2017, 02:43 PM
briskar5 briskar5 is offline
 
Join Date: Jan 2016
Location: Clearfield Pa
Posts: 8
Is this worth looking into

Current business
I was approached last week about possibly buying the following business. Any information at all would be greatly appreciated.
The gentleman built this business from scratch 14 years ago. This place is extremely clean and no competition for nearly 10 miles. The guy is a neat freak who washes and waxes his machines on a regular basis. He currently runs a fluff and fold out of the building where he charges 1.2 per pound for drop off and 1.4 per pound for pickup/delivery. The guy is pretty straight forward and has given me his returns and his profit loss statements. He seems to be 100% honest with me. The numbers that he has given me so far all line up. I know nobody can justify the amount of money he is taking from the top but based upon what he has told me I believe him. He claims he is taking roughly 15k a year off the top. His numbers for the past 3 years are all real close.
I do a lot with residential buildings in the area and I value the building at 80k. The building is nice with a good paved parking lot.

Showing 41k(reported) + 15k cash)=56k total cash flow


He is showing roughly 41k gross on his taxes. Which for him is 19k operating costs and 22k net.
So his net on paper is 22k and he claims he is doing 12k cash off top.
My operating costs (payment, water,sewage,gas, electric)=2300 a month
He spends 9k a year utilities (water,sewage,gas, electric) which averages to 750 a month
I was offered business, building and land for 155k.

His machines are all 14 years old but in impeccable shape this guy is a neat freak and takes care of everything. He also obviously has boiler and all needed materials to run the fluff and fold.
11 stacked Maytag MLG32pdbww
20 Maytag Neptunes (THINK they are mah21) if that makes sense
3 stainless steel 35lbs
1 stainless steel 50lbs
1 new soda machine
1 new change machine
1 small soap vending machine
Tables and chairs

I have the water bills and statements which is roughly 35,000 gallons per month. I found that the machine mah21 averages 15 gallons per cycle. So if I take 35,000 divided by 15 gallons I get 2333 cycles in a one month period. Take that times 2.00 a cycle. Will give me 4,666.00 gross on my machines alone. Then multiply that times. 1.5 (for washer and dryer gross). Would yield me 7,000 a month gross.

The demographics formulas have been run with the following information.

2500 population
House Holds<15k=267
House Holds 15-25k=210
Rentals =336
Average number of people per house hold =2.3


Demographic formulas
1.
(#House Holds<15k *.5 + #House Holds 15-25k *.2) *32
(267 *.5 + 210 *.2)*32
(133.5 +42)*32
5,616 Gross Monthly

2.
(Rentals *.3)*32
(336*.3) *32
100.8 *32
3,225.60 Gross Monthly

3.
((Population *.15)/(#people per house hold))*32
((2500 *.15)(2.3))*32
(375/2.3)*32
5,217 Gross Monthly
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  #2  
Old 03-25-2017, 03:26 PM
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Coinwash Coinwash is offline
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Can you work on these machines yourself ????

YES / NO

What kind of hot water system does it have ???

Are you ready to put in LARGE hours ?

Where is your business PLAN ????? Do you have one....?

The Seller is 100% honest with you -- Why is he selling?

How many machines are down???

How many machine need bearing job ???

Remember you DON'T just collect Quarters?

How old is the change Machine???

Does the owner keep a book of what has been repaired ????

The LIST goes on...
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  #3  
Old 03-25-2017, 09:00 PM
briskar5 briskar5 is offline
 
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Location: Clearfield Pa
Posts: 8
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Can you work on these machines yourself ????
The current owner has offered to stay on and help me learn the machines. I am capable of working on machines, but never worked on laundry equipment.


What kind of hot water system does it have ???
Natural Gas hot water

Are you ready to put in LARGE hours ?
I am a school teacher I drive past the business 2 times a day and I live 7 miles from the business. I have some flexibility and some time to dedicate to the business.

Where is your business PLAN ????? Do you have one....?
My plan is to take it over and continue to run in a very similar manner. I would have someone at the business approximately 7 hours a day running a fluff and fold. All of the numbers are there for a nice monthly profit and nest egg.

The Seller is 100% honest with you -- Why is he selling?
He is older and wants to leave during the winter. His help is in her 40's but doesn't claim much money and was offered a higher paying job.

How many machines are down???
As of the other day 0 machines are down. He usually sends his boards out to be rebuilt and does a lot of the work on his own. He has offered to teach me and walk me through these machines.

How many machine need bearing job ???
He told me that 3 or 4 would need bearings and offered to do them with me helping and learning.

How old is the change Machine???
All equipment is 14 years old.

Does the owner keep a book of what has been repaired ????
Yes he has kept very good records on his machines.

What can I expect from these machines?
Are they work horses?
How long will they last if they continue to be taken care of?
What would we value the equipment at?
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  #4  
Old 03-25-2017, 09:33 PM
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Coinwash Coinwash is offline
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Can you work on these machines yourself ????
The current owner has offered to stay on and help me learn the machines. I am capable of working on machines, but never worked on laundry equipment.

OK after that????

What kind of hot water system does it have ???
Natural Gas hot water

Make and how OLD????

Are you ready to put in LARGE hours ?
I am a school teacher I drive past the business 2 times a day and I live 7 miles from the business. I have some flexibility and some time to dedicate to the business.

Middle of school day--- flood-fire-have to get to the MAT

Where is your business PLAN ????? Do you have one....?
My plan is to take it over and continue to run in a very similar manner. I would have someone at the business approximately 7 hours a day running a fluff and fold. All of the numbers are there for a nice monthly profit and nest egg.

Did you write one up (like lesson plans for your class)

The Seller is 100% honest with you -- Why is he selling?

He is older and wants to leave during the winter. His help is in her 40's but doesn't claim much money and was offered a higher paying job.

How many machines are down???
As of the other day 0 machines are down. He usually sends his boards out to be rebuilt and does a lot of the work on his own. He has offered to teach me and walk me through these machines.

I'll stop here as once said by an old timer

"If it were that easy everyone would do it"


What you should have done is work in a Laundromat during summer recess


How many machine need bearing job ???
He told me that 3 or 4 would need bearings and offered to do them with me helping and learning.

How old is the change Machine???

All equipment is 14 years old.

Does the owner keep a book of what has been repaired ????
Yes he has kept very good records on his machines.
That's very good have you looked at it???

What can I expect from these machines?
Are they work horses?
How long will they last if they continue to be taken care of?
What would we value the equipment at?

Did you read up on the Machines you have???????????????????????????????

Good luck
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  #5  
Old 03-26-2017, 01:38 AM
shad2038 shad2038 is offline
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Location: Mildura Australia
Posts: 1,241

The neptunes will be needing a lot of work @ 14YO. The dryers are possibly made by ADC, so they will need a fair bit of attention, and ADC do not seem to support older equipment.

I would estimate you would need to spend 5-6 hours a day on site, learning and repairing. You can also forget about weekends.

You will need a replacement plan from day 1 and you will make little money in the first 1-2 years.

I would probably buy it.

Good luck
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  #6  
Old 03-26-2017, 12:39 PM
KJD KJD is offline
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Location: NY
Posts: 1,350
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12k or 15k? whatever it is, is just a unverifiable imaginary number.
If he his lying to the taxman he is probably lying to you.
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  #7  
Old 03-26-2017, 01:13 PM
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Coinwash Coinwash is offline
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Quote:
Originally Posted by KJD View Post
12k or 15k? whatever it is, is just a unverifiable imaginary number.
If he his lying to the taxman he is probably lying to you.
Another old timer here
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  #8  
Old 03-26-2017, 01:14 PM
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Quote:
Originally Posted by shad2038 View Post
The neptunes will be needing a lot of work @ 14YO. The dryers are possibly made by ADC, so they will need a fair bit of attention....
Words to listen too...
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  #9  
Old 03-27-2017, 11:08 PM
grosa001
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I can tell you I've had immense problems with the MAH21 Maytag Neptune's that came in my store when I bought it. Bearings are lousy, drain pumps like to go out, coin mech's are garbage, door lock mech's are ridiculous and go out a lot. Just my $.02
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  #10  
Old 03-28-2017, 06:50 AM
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mike mike is offline
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It sounds like he is running this business very well,

That is good because: it has reached 100% efficiency,

That is bad because: YOU can't improve!

(I would almost prefer a biz that is doing badly, but I can see why, and correct.)

He knows the machines need to be replaced soon.

He MAY know of new competition planning?
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  #11  
Old 03-28-2017, 06:54 AM
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Coinwash Coinwash is offline
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Quote:
Originally Posted by mike View Post
It sounds like he is running this business very well,

That is good because: it has reached 100% efficiency,

That is bad because: YOU can't improve!

(I would almost prefer a biz that is doing badly, but I can see why, and correct.)

He knows the machines need to be replaced soon.

He MAY know of new competition planning?
Another old timer opinion
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  #12  
Old 03-28-2017, 07:52 AM
briskar5 briskar5 is offline
 
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Location: Clearfield Pa
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In a town of 2500. I don't fear a mat being better than this one. Someone would have to drop 250-300k for competition in a very small town. With a yearly net of 20k. I should pay 60-70 for the business. Keeping in mind I am buying the building(which has a value of 75-80). A purchase price of 145-155 I think should be fair with no competition and turnkey. Pair that with him staying on till this winter when I have a problem to help me out I think it's a fair value. Any thoughts from the experts?
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  #13  
Old 03-28-2017, 08:11 AM
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Coinwash Coinwash is offline
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It seems you made up your mind please keep us informed. Maybe later you'll become a Prem. member?

Just be ready to sink money in to your new venture....
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  #14  
Old 03-28-2017, 08:15 AM
briskar5 briskar5 is offline
 
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Now you have me second guessing my numbers.
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  #15  
Old 03-28-2017, 09:47 AM
grosa001
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Offer him $95,000 initially, he'll decline, with a strike price of $125k. I wouldn't go higher than that - he's not going to find many buyers in that small market. If he doesn't go for that number, let him sit for another few months with no buyers and I think you'll get it for that. I think $155k is too aggressive on his end, don't pay him that - that $12k cash off the top is VERY shaky and he's probably just guessing on that number. This advice is from someone who got grossly lied to about revenues buying their first store.

That extra room you'll get between the sale price and what he wanted, you can go finance some new machines when it's needed (which will be soon if not now)
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