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Free Course on How to Buy a Laundromat — Transcript

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0:00This is part one of a free three-part
0:02course that's going to show you
0:04everything you need to know to buy your
0:06first laundromat this year. This video
0:09I'm going to show you exactly how our
0:11team finds laundromat deals for our
0:13clients so you can do it yourself.
0:15Finding a laundromat in today's market
0:18can be very difficult, but I'm going to
0:19show you how to do it. And over the next
0:21two videos, I'll show you exactly how to
0:24value those laundromats and every step
0:26of proper due diligence so you know what
0:29you're buying before it becomes yours.
0:32[music] And here's the first big mistake
0:33most buyers make. They only look in one
0:36place for deals. That's probably best by
0:38itself. You've probably done it. I did
0:40it, too. We don't only look in one
0:42place. We find Laundermat deals in three
0:44big buckets. We have a six-step process
0:47that we go through. Bucket number one is
0:49public markets. This is looking on major
0:53buyer platforms, broker [music]
0:54websites, and even AI searches. Bucket
0:57number two is broker professional
1:00networks. These deals come from
1:01relationships that we develop with
1:03brokers, contributors, service
1:05technicians, other industry insiders,
1:08where those deals often show up early
1:10and they show up quietly. And bucket
1:12number three, offmarket deals. We have
1:15direct [music] contact with owners,
1:17landlords, vendors, and other internal
1:19signals that show us that a store might
1:21be ready for sale before anybody else
1:23knows about it. So, if you want [music]
1:25help organizing all three of these deal
1:27sources in one place, we built a custom
1:30platform.
1:31We're ourselves decided to allow you
1:34[music] to use it. It's called
1:37Laundermat DFY. Stands for done for you,
1:39but now it can be DIY. But check out
1:41laundromatdfy.com
1:44and sign up for a free account. It's
1:46free. It's a platform we can help you
1:48find that appeal much much faster. Now
1:50listen, this is only the framework, but
1:52you've got enough to go get started if
1:54you want to right now. Use those three
1:57buckets. Go to laundromat DFY and
1:59utilize that and you can get after it.
2:01But if you want more details, want to
2:05see our full sixstep process, stick with
2:07us. I'm going to bounce back to the
2:09studio here in a second and break it all
2:11down for you step by step. If you end up
2:14heading out to take some action right
2:16now, do me a favor. Before you go, drop
2:18a like. Uh cuz listen, you would have
2:20earned it. Getting after it after that.
2:23But if you're going to stick around,
2:24grab a notepad and let's jump into it
2:26right back in the studio. [snorts]
2:29Okay, let's jump into the meat of this
2:31framework. Let me break it down step
2:32[music] by step. We've got our three big
2:34buckets, our three primary channels that
2:36we utilize.
2:38uh to find these laundromat deals and
2:41then we break it down into six steps.
2:42So, I'm going to go through all of those
2:44for you. So, get ready to take some
2:45notes if you're out there and you're
2:46serious about buying your first
2:48laundromat. That's the big picture.
2:50Let's zoom it in so you know exactly
2:52what you should be doing and how you can
2:55actually do this. So, first of all, let
2:58me just introduce you to the laundromat
3:00deal finder platform that we've created
3:04here. This is we call it laundromat done
3:06for you or laundromatdfy.com.
3:09You can get a link to that uh if you're
3:11on YouTube down in the description. If
3:12you're on the podcast, those will be in
3:14the show notes. But the laundromat deal
3:18uh [music] finder platform. So, you just
3:20come to this. It's free. This is a
3:22custom platform that we built to [music]
3:24be able to work with our clients and
3:26feed them deals and move quickly on
3:29deals that are good deals. Um, but
3:30[music]
3:31we decided, hey, let's create a DIY part
3:35of this uh platform so that you guys can
3:38utilize the same tools that we're
3:39utilizing when we find deals for our
3:41clients. So, go over there. You just
3:42click sign up. It's real easy. You just
3:44create a a
3:47account with your email, a password, and
3:51I [music] think that might be it. So,
3:53um, just do that. Then you can sign in.
3:54And this is what it'll look like once
3:56you sign in. Again, this is 100%
3:59customized, built for us to for this
4:02specific purpose, and we're giving it to
4:04you for free. So, check that out here.
4:06Um, again, it's lamatdfy.com. Done for
4:09you. dfy.com. This is what it'll look
4:11like when you log in and you start
4:13getting going. Okay, just real quick as
4:15a as a quick overview, you've got your
4:18dashboard right here. This is where you
4:20can hit all the highlights of everything
4:21you need to see about a particular deal.
4:24So any deals that you've uploaded into
4:27your platform, uh you'll be able to see
4:31right here. And uh this also does have a
4:35broker CRM. You'll see how that'll play
4:37in um as we get going. But any brokers
4:39that you've connected with and added
4:41into um the the system here, the CRM
4:45here, you'll be able to see that. And
4:46then also uh one of the things that's
4:49important for us is that we know that
4:52listen it's not easy to find deals these
4:55days. So we know that we need to take
4:58action. The more action and activity
5:00that we can have the better the chance
5:03that we will be able to find a deal for
5:05our clients. And so we've created into
5:08this platform a way to track the
5:10activities that we're taking both so
5:12that we know we're doing all the right
5:14things. we can keep track of the
5:15activities that we have taken and what
5:16we need to take and so our clients can
5:19see the activities that we're taking on
5:21their behalf. Okay, so there's some
5:23quick actions you can do right here off
5:25of the platform. You can add a deal
5:27here, add a broker, log an activity, you
5:30can view the deals you've already added.
5:32Uh again, you can assign tasks yourself
5:35uh to yourself and uh date those. that
5:37way they stay tracked in the system and
5:41uh then analytics about where you're at
5:43in the process. Okay, so real quick I'll
5:45just take you through. Again, not going
5:47to go crazy deep into here. You can come
5:49play with it. Again, loanermat dfy done
5:52for you. DFY.com.
5:54Um but let's just uh you know, let's add
5:56a pretend deal here. So, all you got to
5:57do is come add a deal. Uh, listen, I'm
6:01in Los Angeles. So, we'll just say I'm
6:02in the Los Angeles market and the store
6:05is uh Jordan Soapy Tub. How about that?
6:08Okay. And we'll say this is on Cr. You
6:12put the whole address in here if you
6:13want. If you're if you found this deal
6:15through a broker, you can actually
6:16assign a broker
6:19um to the deal. That way, you know, um
6:21who to, you know, keep track of. You're
6:24in California. I do broker some deals
6:26here. So, uh, throw my name and and info
6:28in here and you can, uh, you know, keep
6:30track of me as well. Uh, asking price,
6:34you know, let's just say it's, you know,
6:36$400,000.
6:37And gross revenue is doing, I don't
6:40know, let's call it $300,000. Net
6:42income, we'll say it's making 80.
6:46And the rent,
6:48I don't know, we'll just call it $3,000.
6:51Size, let's just say 2500. Okay. And
6:54then status, you can keep track of where
6:56it's at in the process, right? Open. If
6:58you get it under contract, you put it
7:00here. Closed. [music] If somebody else
7:02swoops in and buys it out from under,
7:03you can mark it as loss. That way you
7:05don't have to do anything. And then any
7:06notes you can put in here, right there.
7:09And then you just go to add deal here.
7:12All right. So now we've got Jordan Soapy
7:15Tub right here with all the relevant
7:16information. Uh you can view the sheet
7:20here. Okay. And also you can export this
7:22to PDF if you ever need to pull it out
7:24of the system or you want to keep your
7:25own file or anything like that. Again,
7:27it'll all save in here. But if you
7:29wanted a PDF, you could do that here. So
7:31you got all your highlights here, the
7:33notes that you've included. And then if
7:35you want to log an activity, so let's
7:37just say, you know, you called me cuz
7:40you wanted this deal. And then you can
7:42say what happened on the call. There you
7:44go. Didn't he didn't pick up uh he's a
7:47dead beat, right? Or whatever you want
7:49to put in here. Um, and then gives you
7:50some recommendations and stuff. And then
7:52it allows you, this is awesome, it
7:53allows you to schedule a followup. So,
7:56listen, I'll just, you know, keep the
7:58default date and time. And then we just
7:59say log activity here. Um, okay. It
8:03[laughter] all right. I got an error.
8:04We'll make sure we get that bug fixed as
8:06before this comes out. But that's how
8:07you would log an activity. Uh, right
8:10here. You can see that. No problem.
8:12Okay. And that will show up in your
8:14activity log once it's all, you know,
8:17once it's all smoothed out. Um, and
8:19again, you sign up with this and you
8:20find little bugs in here. I'd consider
8:22this beta, but uh, we're just now
8:24launching it for the, you know,
8:26do-it-yourselfers out there. So, utilize
8:28this. And I will say, too, that our, um,
8:32our done, we have done for you clients
8:34where we go out and do all this for you.
8:36We find the deals and we assign them to
8:37you and you tell us, hey, we like it or
8:39we don't like it. We also have done with
8:41you clients and they're already
8:42beginning to utilize this platform uh,
8:45as well. It's been super effective.
8:47Okay, so that's deals here. Um, our
8:50broker CRM also awesome. So, as you're
8:54searching around for a laundromat or
8:55you're calling brokers, you can keep
8:57track of those brokers here. Again, very
8:59similar, very simple. You can just input
9:02[music]
9:02uh the broker information here. Um, and
9:07uh, you know, their phone number, their
9:08email, their website, all of that. You
9:10can leave notes about them that you want
9:12to keep track of here. And then you just
9:14click add broker. This is what it'll
9:16look like here. Um, you can view broker
9:19information. And again, the beauty of
9:22this is that now we can keep track of
9:24when we're calling the brokers and when
9:26we need to call them again. Um, and I
9:29should just point out real quick that
9:31with the platform, you will get
9:33notifications here to remind you to do
9:35the things that you're supposed to do.
9:37Um, and you'll also get email reminders
9:40uh when those tasks come up. Okay. Same
9:43with the tasks. You can add these tasks
9:46uh here. You just add a task. You know
9:49what what needs to be done. Hey, I need
9:51to call Jordan. He didn't pick up. He's
9:53a dead beat. Uh you know, you can remind
9:55yourself what you need to do here. And
9:57you can assign it a priority level and a
10:00date. And then click add task. That'll
10:02all show up right here for you so you
10:05can keep track. Again,
10:07finding a deal in this uh market today
10:10is is [music]
10:12easier said than done. This is the
10:14process I'm I'm going to take you
10:16through the whole process that we go
10:17through to find deals for clients and
10:20it's a lot um but this is going to give
10:23you the best chance to get this done.
10:25Okay. So you can also see your activity
10:27log and the analytics here um as you go
10:31through that. But we are not going to go
10:34through all that uh here. Okay. So now
10:37what I want to do is I want to take you
10:38through step by step exactly what it is
10:41that we do to help you find a laundromat
10:45deal. Okay, we've got our three big
10:47buckets. Now let me break them down for
10:49you. All right, so let's start with
10:50bucket number one is our public market
10:53search. What exactly do we do when we do
10:58our public market search? Well, it we do
11:00a lot of what most of you have probably
11:02done already is we're searching the
11:04platforms online to look for what deals
11:06are available. When we find those deals,
11:09we add them into our [music] platform.
11:12We assign them to a client. You won't
11:13have to do that cuz you are your own
11:15client if you're doing the DIY. We
11:17assign them to our client. Our client
11:18says yes or no on those deals or hey, we
11:21want to talk about it some more. So, in
11:23order to find those deals, listen, we're
11:25looking at all the major platforms.
11:27[music] I'll name off a few of them. BIS
11:29Buy Sell, uh, Bisquest, Bisbin, all the
11:33Biz websites. [music] Um, some slightly
11:36less common websites that we utilize are
11:39Facebook Marketplace, uh, Facebook
11:41groups,
11:43Craigslist, um, Loopnet is another one.
11:47Um, [music] we just Google laundromat
11:49for sale in whatever city that you're
11:51in. Um, these brokers that we input into
11:54our CRM, we're checking their sites. A
11:57lot of times they have businesses listed
11:59on their websites that maybe don't get
12:01into some of the big ones. And then
12:03we're utilizing AI as well to help us
12:05find deals. So that's what we're looking
12:07for. The cadence of what we're looking
12:09for these things is about three times a
12:12week. We're going through each market
12:14that we're working with clients with
12:16three times a week and [music]
12:18seeing if anything new pops up. You can
12:20also do things like uh add Google
12:22alerts. That's a hot tip right there.
12:24add Google alerts for laundromat for
12:26sale in your city or your area or your
12:28state, [music] wherever you're looking.
12:30Um, and that way Google will just feed
12:32you those if they um [music] come out.
12:34But I wouldn't rely solely on that. But
12:36that can be a really great tip. We've
12:37talked about our public market search.
12:40The next bucket that we have is our
12:42broker and professional network that we
12:45tap into. I've kind of showed you in the
12:47laundromat DFY our broker CRM. So, our
12:51objective when we onboard a client, the
12:54first thing we do is we make a list of
12:57all the we actually have a list, but we
12:59narrow it down and get specific about
13:01all of the laundromats that are in the
13:03area in general. Then what we do is we
13:07look for all of the deals that are on
13:11any [music] of anywhere on the internet
13:12that are for sale, just like we talked
13:14about before. So, we want to know all
13:15the laundromats in the area. Then we
13:17want to know specifically which ones are
13:18currently for sale. And again, we do
13:21that about [music] three times a week
13:22where we're we're reanalyzing those
13:25deals. And then what we do is we create
13:29a master list of all the brokers that we
13:32can find in the area. So that's
13:34laundromat [music]
13:34specific brokers, that's small business
13:36brokers. If our clients are open to or
13:38interested in buying real estate, we're
13:40looking at commercial real estate
13:41brokers as well. We're making a full
13:43list of them, inputting them into the
13:45CRM, and uh let me tell you what we're
13:48doing with those. So, we're going to add
13:50them all [music] from public listings.
13:52We're going to check, you know, all the
13:53sites. If anybody is listing a
13:55laundromat in the area, they're
13:56automatically going into the [music]
13:58CRM, even if the laundromat that they're
14:00listing is not one that we're interested
14:02in. That's one way to get them. Another
14:04thing that we do to to build this
14:06[music] broker, you know, comprehensive
14:08broker list is we conduct Google sweeps.
14:11So, we're looking for laundromat brokers
14:13in your city, business brokers in your
14:15city, commercial real estate brokers in
14:17your city, and we're just making a
14:19comprehensive [music]
14:20list. And then we utilize AI as well to
14:23help us discover brokers, find brokers,
14:25[music] and when we do find them, we're
14:28inputting as much information as we can
14:30find about them [music] into that CRM.
14:32So, what bare minimum what we're looking
14:34for is their name, their phone number,
14:37their email address, and their brokerage
14:40website. That's bare minimum of what
14:42we're looking for. And again, when they
14:44have deals for sale that may or may not
14:47fit our client's buy box, we're going to
14:50assign those deals to that broker. So,
14:52that way we can keep track of when we
14:54call those brokers. We can ask them
14:55about, you know, the deals that they
14:58have in terms of the cadence. So, here's
15:00where we get a little uh we listen, we
15:03get a little extreme here, but in terms
15:05of the the the cadence, our goal is to
15:09have two touches per week per broker.
15:12So, we've got our whole list in the
15:13market. We're trying to connect with
15:15those brokers two times a week. Some of
15:17what we do again is referring deals or
15:20referring somebody from our network to
15:22them to to to help them out. We try to
15:24create tools specifically for them
15:26[music] uh to help them out. like for
15:29example this course that they can say,
15:30"Hey, you know, go check this course
15:33out. You're going to know exactly how to
15:34buy a laundromat." [music] Uh, and we'll
15:36just say, "Hey, share this with any
15:37clients you have." So, you don't have to
15:38answer all their pesky questions. We'll
15:40do it for them, right? We'll try to give
15:42them some insights on the industry, on
15:45the market, you know, every quarter or
15:46so, just to, you know, just to offer
15:49them something that's useful for them.
15:51That's what we're doing with our
15:52brokers. We're making sure they get in
15:53there. Then two times every week, we're
15:56trying to make some sort of contact,
15:58whether that's asking for deals or
16:00offering something to help them out.
16:02Bucket three is offmarket deal
16:05generation. We're on step three right
16:07now of our six-step process of finding
16:09deals for clients. So, our objective in
16:12this
16:13>> [music]
16:13>> uh this bucket here, this category of
16:15what we're doing is to access
16:17opportunities unavailable to the general
16:19[music]
16:20market. Again, I mentioned before, one
16:22of the first things we do is we build a
16:25list of all the laundromats [music] in
16:27the area. Here's how we do it is we
16:30collect all the zip codes within the
16:31buyer radius for a client. So, we're,
16:33you know, if you're in Dallas, we're
16:35going to look at all the zip codes. You
16:37know, if a client says, "Hey, I'm
16:39willing to drive 45 minutes." We're
16:41going to look at all the zip codes
16:43within around a 45 minute to an hour
16:45radius and we're going to pull those
16:48laundromats and create a list
16:50specifically for that client. Now, we
16:51have the advantage of we already have a
16:53list of all the laundromats in uh in
16:56America that are at least the ones that
16:58are listed online. And uh so we can
17:01create that list pretty quickly and
17:02easily for you. If you're in a market,
17:04it's [music] actually not that difficult
17:05to just go on Google Maps and say, "Hey,
17:08laundromat near me." if you're in, you
17:10know, within your radius and then just
17:12kind of make a spreadsheet or make a
17:14list of, you know, all the laundromats
17:17that are in that area. You can check
17:18Google Maps. You can do the same with
17:19Yelp or one of the other maps like Bing
17:22Maps or Apple Maps or whatever you
17:24prefer. And then also, you know, if if
17:27you're in an area where you're like,
17:28hey, maybe some of these laundromats
17:29don't have websites or not online, you
17:31can also just drive around and make a
17:33list of laundromats [music] um there.
17:35So, what we're trying to put into,
17:37again, you know, we have that the the
17:40deal CRM there. Uh, and they don't
17:42necessarily have to be deals to put them
17:44into the uh the laundromat DFY platform.
17:48Uh, but we want to keep track of those
17:49laundromats. So, what we bare minimum of
17:51what we want from the laundromat is we
17:53want laundromat name if they have one.
17:55Might just be mat or coin laundry or
17:57whatever, but laundromat name if they
17:58have one. We try to be a little more
17:59descriptive in the name, by the way, so
18:01we can keep track of what's what.
18:03laundromat name, the address, if we can
18:05get like a phone number or an email
18:07address or something like that, we try
18:08to get that as well. And that sets us up
18:10to be able to reach out to them and find
18:14out if they're interested in selling.
18:16So, once we have that master list of all
18:19of the laundromats in the area, it's
18:20time to execute. Uh we've got a
18:23threetouch outreach uh system that we
18:26utilize. Okay? And then we're going to
18:28execute that three-touch outreach.
18:30Number one, direct mail, soft, low
18:32pressure message. In fact, if you go to
18:35laundromatresource.com/resources,
18:37you can actually download a template of
18:39the exact letter that we mail out to
18:41laundromat owners when we're looking to
18:43buy uh that laundromat. [music]
18:45Okay? So, go check that out if you need
18:47it. Number two is phone call. If we can
18:50get a phone number, um, then we're just,
18:53you know, looking to have a conversation
18:56with them just to see, you know, if they
18:58might be interested in selling or if
19:00not, if they know anybody who's
19:01interested in selling. That's a hot tip
19:03right there, too, because multiple times
19:06we have spoken with a laundromat owner
19:08who's not interested in selling, but who
19:10knows someone who is and been able to
19:11strike up some deals that way. So,
19:13[music] it's a great way to go about it.
19:15And then number three is email or text
19:19follow-up messages. We try to keep a
19:22cadence. If they if they're interested,
19:24we try to touch base with them every 3
19:26to 4 days. If they say, "Hey, I'm not
19:28interested in selling." We still try to
19:30keep in touch with them about once a
19:31month cuz we want to be there when they
19:33are ready to sell. All those touch
19:35points though are logged in the
19:37laundromat DFY platform and [music] any
19:40potential deal information that we can
19:42glean from those direct mail, phone
19:45calls, emails, text messages, all of
19:48that is going into that uh into the deal
19:51on the LMAD DFY platform. In addition to
19:55that, we're looking for distress signals
19:57that we prioritize. [music] So, we
19:59definitely want to make note of in the
20:01in the platform. We want to make note if
20:04we find a laundromat that has multiple
20:06broken machines, bad reviews that keep
20:09trending downward, [music] reduced
20:11hours, like, you know, we see
20:13laundromats all the time that are open
20:14like whenever it's convenient for the
20:15owner, maybe because they can't do more
20:17hours or they just don't need to or
20:19don't want to do more hours. A lot of
20:21times that's a sign that, hey, maybe
20:23they're getting close to being ready to
20:24sell here. Um, you know, if there's if
20:28it's like a zombie m, you know, it's
20:29[music] dirty or unstaffed and just not
20:32being run well. Um, if [music] there's,
20:36you know, out of order signs all over
20:38the place, empty parking lot
20:40consistently, these become a higher
20:42priority for us if we're working with a
20:45client who is like, "Hey, I'm looking
20:47for a value ad opportunity." We also
20:48have clients who just want turnkey done
20:51for you. Obviously, we prioritize other
20:53things uh when we're doing that. You
20:55might think like, hey, that pretty much
20:56covers the three buckets, but uh within
20:58these buckets, [music] there's some more
21:01things that we do. So, number four, so
21:03we're at step number four is our insider
21:06industry insider network that we tap
21:08into. So, for us, we're super blessed,
21:11right? Because we have a platform that's
21:13been around a really long time. We've
21:14created a ton of value and we know a ton
21:17of people in the industry because
21:20they've been on the podcast or we've
21:22just met them at events and things like
21:23that. So, you [music] can still take uh
21:25advantage of this by getting out there
21:27and starting to meet some people. Our
21:29objective here is to leverage the
21:31insider intelligent intelligence [music]
21:33channels that we have to predict early
21:36sale behavior. That's what we're looking
21:38for. So, let me give you some examples
21:41of who some of these industry insiders
21:44might be that you might be able to also
21:47[music] tap into. So, for example,
21:50equipment distributors. A lot of times
21:52they know if an owner needs to retool
21:55soon and or if they want to retool, they
21:57may not want to retool soon or if they
21:59just put in new equipment with the
22:01intention of flipping the laundromat.
22:04Repair technicians can be a great
22:07source. Again, [music] they know these
22:10owners. They know their levels of
22:11frustration. They know if they're doing
22:13a good job or a bad job, and they might
22:14be able to help you assess uh some
22:17motivation on on selling. We also try to
22:20talk with CPAs, even uh probate,
22:25divorce, business dissolution attorneys.
22:28We're trying to tap into those networks
22:30as well because a lot of times they know
22:33before anybody else does. So, we're
22:34utilizing that. Maybe some other people,
22:36too. there's different like vendors and
22:39stuff like that that we can tap into
22:40sometimes, but those are the main ones
22:42that deals [music] might come from. Um,
22:46again, one thing that we do is for
22:48[music] some of these channels, we will
22:51offer that finder fee and that will help
22:53us to, you know, be front of the line.
22:57If if somebody knows somebody's willing
22:59to sell and they know they're going to
23:00make 500 bucks for it, then they're more
23:03likely to bring it to you first. Number
23:05five [music] in our six-step process is
23:08we're doing some landlord and property
23:10intelligence as well, even if our
23:13client's not looking for the real estate
23:15as well. We're going to our objective
23:18here is to discover opportunities
23:19[music]
23:19through building owners. Um, so here's
23:22here's kind of what we're doing is we're
23:25identifying all the buildings we can
23:26find that are housing laundromats
23:28currently. We're pulling the landlord
23:30ownership uh data from county records
23:34and we're contacting those landlords.
23:36Here's what we do when we contact them.
23:37We're going to ask them about tenant
23:39performance. We're going to ask about
23:40potential vacancies. Uh we're going to
23:43ask about how [music] much time is left
23:44on the lease and if they're satisfied.
23:47And we're asking um if any of their
23:49owners are looking to exit. We're
23:51looking for our our goal there is to try
23:55to again catch deals before they come on
23:57the market and to be a go-to solution
24:01for landlords when they find themselves
24:05in a situation where maybe they have a
24:07vacancy where a laundromat would be a
24:09good fit. We can come in and assess that
24:10and say, "Hey, you know what? Let's
24:12build a laundromat here. This might be a
24:13good idea." or if they have a laundromat
24:16vacancy or they're unsatisfied with
24:18their current tenants and they want
24:20somebody who's going to come in and run
24:21that laundromat professionally. So,
24:23that's what we're tapping into there.
24:24Number six out of our sixstep process is
24:28monitoring and signals. [music]
24:31We're trying to capture real time
24:32distress or opportunity indicators. Um,
24:36we'll try to use uh the FOYA, the
24:39Freedom of Information Act to find
24:41[music] expired business licenses. We're
24:44looking for machine permit renewals. We
24:47we, you know, check local news alerts
24:50for fires or floods. [music] Um, we
24:53utilize I mentioned this before, but
24:54utilize Google alerts. Laundromat
24:56closing in this city, business for sale
24:58in this city. Any kind of distress means
25:00that we're going to reach out to them
25:02immediately. That might feel super
25:05overwhelming. I need to say this right
25:07now is that listen, I acknowledge and I
25:10realize if you're out there trying to do
25:12all this yourself, plus you maybe are
25:14working your 9 to5 and you have a family
25:17and you've got a life. Uh this can be
25:20very very difficult to do all of these
25:22things if not even impossible. Uh it's a
25:25lot of work. But
25:28let me just tell you if you have to
25:30focus on a few things. Number one, the
25:33easiest thing, lowest hanging fruit, is
25:35to do that public market search online,
25:38find a laundromat online. It's easier
25:40said than done today in today's market,
25:42but [music] you can find deals online
25:44and we do all the time. So, be looking
25:46there. That's the lowest hanging fruit.
25:48[music] After that, I would be tapping
25:50into the bro broker network. The broker
25:53[music] network would
25:55um still most mats are sold through
25:57brokers. And if you can find deals that
25:59are either newly on the market or even
26:01before they go out publicly on the
26:03market, you're going to have a much
26:04better chance of getting that laundromat
26:07deal um than if you are solely relying
26:10on online listings. And then [music]
26:13next in priority would be do direct
26:15mail. Direct mail is the best kind of
26:18bang for your buck. [music]
26:20uh you know obviously like more
26:22effective would be going to each
26:24laundromat meeting the owners [music]
26:26having conversations but it's so
26:27timeconuming you can't do that for all
26:29of them and a lot of times they won't
26:32answer the phone so that direct mail
26:33tends to be a little bit more effective
26:36[music] and I will say on the direct
26:38mail it's a numbers game uh you know
26:41most of the time when I talk to people
26:42and they say hey I sent out mail and it
26:44didn't work then I'll ask them well how
26:46much did you send out and they'll say
26:47well I sent out to 15 laundromats And
26:50just to give you a reference or like a
26:52framework for what we do is we send them
26:55out to all the laundromats in the area.
26:57That might be 15 if you're kind of out
26:59in no man's land a little bit, but it
27:02might be a hundred if you're in New York
27:04or LA or something like that.
27:06Recognizing that you have a life and all
27:08that, if you're going to do it yourself,
27:10the things that I would prioritize is
27:11that online search, then the brokers,
27:14then the direct mail, uh, and do as much
27:17of it as you can. and be okay if you
27:20can't do more. Okay, you will find a
27:22deal if you stick with it. It might just
27:24take a little longer or maybe you'll get
27:26lucky and you'll find it right away.
27:27That happens, too. So, okay, that's our
27:30entire system of what we use to help our
27:32clients find [music]
27:34deals. So, if you're want to do it
27:36yourself, go to laundromatdfy.com.
27:38[music] It's free. You can sign up for
27:40it. You can use the platform. We'll have
27:42that uh little bug fix that we found in
27:44the video uh at the end there. uh we'll
27:47have it fixed by the time you're up and
27:49running. And
27:50>> [music]
27:50>> uh listen, if you're somebody out there
27:52who's like, you know what, I'd love to
27:53find a laundromat deal. I don't have
27:56time to do all this myself. I'd love if
27:58you guys just did it for us. Check out
28:00laundromatresource.com/coaching
28:03and uh book a book a call over [music]
28:05there. You'll be able to talk to us.
28:07We'll walk you through what options you
28:09have uh with us. And uh listen, we're
28:14here to help you succeed. That's what
28:16we've been doing for a long time now.
28:18And we've got a team to help do all of
28:21this stuff uh for you if you need us to.
28:24All [music] right. All right. Uh listen,
28:27that is step one is finding the deal.
28:30Step two is coming up in the next video.
28:33That is all about [music] once you find
28:36that deal, how do you analyze it? How do
28:38you determine how much it's worth? and
28:40how do you make a compelling offer so
28:42that you have the best chance of getting
28:44that deal? That's what we're going to
28:45dig into.
28:49[laughter]
28:52See you there.
28:54You overpay for a laundromat or make the
28:56wrong offer, it can take years to dig
28:58yourself out of that hole. I know
29:01because that's exactly what I did with
29:03my first laundromat over 12 years ago.
29:06In this video, I'm going to show you
29:08exactly how to determine the value of a
29:10laundromat, make the right offer,
29:13including all the expensive lessons that
29:15I learned along the way, so that you
29:18don't have to learn them the hard way
29:19the way that I did. Now, here's the good
29:22news. This is actually a pretty simple
29:25process if you know what you're doing.
29:27Not easy, but simple. And you can get
29:29enough information to value a laundromat
29:32with just four numbers. Why? Because
29:36laundromats are valued as a multiple of
29:38the net income. So if you get the net
29:40income and the other three factors that
29:44a multiple is driven by that's going to
29:46give you enough to make a valuation of
29:49the laundromat. So number one, age and
29:52condition of the equipment. Newer
29:54equipment means higher value obviously.
29:57Number two, rent as a percentage of the
29:59gross income. High rate kills deals
30:02faster than almost anything else. And
30:04number three, how many years are left on
30:06the lease? A strong lease protects you,
30:09and a weak one creates risk. If you want
30:12help running these numbers quickly and
30:14consistently, we've actually built a
30:16calculator at
30:17lawnmatterresource.com/calcs
30:19where there's an analysis calculator
30:21that'll walk you through this exact
30:23process. But this is just the overview.
30:26It's enough to get you started. If
30:28you're itching to go take action right
30:29now, leave a like and go get after it.
30:32But if you want to see exactly how we
30:34analyze deals and pressure test them and
30:37advise our clients whether they should
30:38walk away or make an offer, let's head
30:41back to the studio and I'll walk you
30:43through the exact process that we
30:45utilize to value a laundromat and to
30:48create a compelling offer for our
30:50clients.
30:52Okay, I told you the four numbers that
30:54you need to be able to value a
30:57laundromat. Let's go through it in depth
30:59so that I can show you exactly what to
31:01do with those numbers to determine the
31:02value and how to craft a compelling
31:04offer to give you the best chance of
31:07getting that laundromat deal uh locked
31:10up and uh and getting in the game here.
31:13That's the whole goal, right? Okay. So,
31:16let me explain to you kind of how this
31:18works uh because it can be a little
31:20confusing and maybe even a little bit
31:22frustrating if you're not familiar with
31:23it. Generally speaking, this is not
31:25always the case, but typically when you
31:27go to buy a laundromat, a lot of times
31:29you're going to get very little
31:31information upfront and then you get
31:33more information after you make your
31:35offer and get it accepted. So, when we
31:38analyze a laundromat deal, we kind of
31:40analyze it two different times. The
31:42first time, well, we analyze it a bunch
31:44throughout the process, but two main
31:46times, right? first analysis, we utilize
31:49the numbers the seller gives us to
31:52determine the value of the laundromat.
31:54Okay? A lot of times those numbers are
31:58very round numbers, a lot of zeros a lot
32:00of times. A lot of times they're, you
32:02know, they're averages. They're
32:04unverified numbers. And that could be a
32:07little scary to make an offer based off
32:10of that. But a lot of times that's what
32:12you're making your offer based off of.
32:14And you don't get more in-depth numbers
32:17until after you get your offer accepted
32:19and start the due diligence, which will
32:20be the next video, by the way, of what
32:23exactly to do once you get that
32:26laundromat under contract. But before we
32:28get there, we've got to talk about how
32:29do we value it based on the numbers the
32:32seller gives us and how do we craft a
32:35compelling offer that also protects us
32:38from making an offer that turns out to
32:40be a bad offer because the information
32:42was bad or wrong or whatever. That's
32:45what we're going to talk about today.
32:46Let's dig into this. Again, we're using
32:48the numbers the seller gives us most of
32:50the time. Now, again, quick overview. We
32:54need four numbers to determine the value
32:56of a laundromat. There's other things
32:58that play into it, but initially all we
33:00really need is these four numbers to be
33:04able to to make an offer, a compelling
33:06offer. Okay? So, we need the net
33:08operating income, we need the age and
33:11conditions of the machines, we need the
33:14rent amount, and we need the number of
33:17years remaining on the lease. Now, the
33:20question then is, what do we do with
33:21these numbers once we get them? How do
33:23we translate those into a value for the
33:26laundromat? Okay, so let me show you
33:28exactly how to do that. What to do with
33:30these numbers? To do that, I'm going to
33:32show you our uh analysis calculator that
33:35we have here at laundromatresource.com.
33:37So check out lawmmetresource.com. Go to
33:40the calculators page and go to the
33:42analysis calculator. We'll link that. If
33:44you're on YouTube, that'll be down
33:45below. If you're on the podcast, we'll
33:47have that in the show notes page. But
33:48again, lawnmatresource.com.
33:50Navigate to resources and calculators.
33:53Go to the analysis calculator. This is
33:55what will pop up. It is our analysis
33:58calculator. Now, you can input
34:01information about a particular
34:04laundromat. You can add a photo. Let me
34:06see if I have a photo even that I can
34:09upload. I have a picture of a laundromat
34:10somewhere. No, but I do have a picture
34:13of this rainbow out in front of my
34:15house. I'll put that there and just
34:16pretend like that's a laundromat. Uh,
34:18and you can put the business address and
34:20a Google Maps link if you want. Uh, the
34:22reason you might want to do this is
34:24because this, uh, calculator will spit
34:26out a an analysis of the laundromat and
34:29you can actually download it as a PDF. I
34:31utilize those PDFs for three in the
34:34calculator for three main things, right?
34:36Number one, obviously, is to determine
34:39the value of a laundromat. Uh, but that
34:42PDF I will keep it for my own files um
34:45just so I can keep track of the
34:46laundromats that I'm looking at. Again,
34:48I will upload this actually to the deals
34:51in the laundromat dfy
34:54um platform. We talked about that in the
34:55last video if you're not familiar. Check
34:57out laundromat dfy done for you dffy.com
35:01and create an account over there. It's
35:03absolutely free. It's the platform we
35:05utilize to help clients find
35:07laundromats. Um, you can upload that
35:10analysis of the laundromat, uh, the PDF
35:13up to that, uh, your CRM over here at
35:17launderdfy.com.
35:19Keep track of everything. Um, and also
35:22we uh, so that's the first thing, keep
35:24track of things for you. The second
35:25thing is we if you have a business
35:28partner, for us it's our clients, but if
35:30you have a business partner or somebody
35:32else that you're work, a spouse maybe,
35:33it'll have a breakdown of all the
35:35numbers. I'll show you one at the very
35:36end of this process. And that way you
35:38can present it to them and they can ask
35:40their questions, but it'll have
35:41everything they need to determine the
35:42value for themselves. And number three
35:44is if you're working with a lender, you
35:46can send this over to the lender and
35:47just say, "Hey, here's a quick analysis
35:49of uh this, you know, from the
35:52laundromat resource analysis
35:53calculator." So you can actually add a
35:55whole lot more details here too to kind
35:57of keep track of all the stuff. You can
35:59actually include every [snorts] single
36:01machine if you want to. That way you
36:02have a list of all that and all the info
36:04about it if you want. that's uh that's
36:07there for you if you want to use it.
36:08We're not going to mess with any of that
36:10today. You just click add more, by the
36:11way. Um
36:14but you can put that in there and
36:15that'll be on the PDF. Okay, so now we
36:19know the four numbers. So the first one
36:20is that what we call the net operating
36:22income. Just so everybody's on the same
36:24page, net operating income is how much
36:27money is coming in the laundromat minus
36:29how much money is going out of the
36:31laundromat before things like loans,
36:34taxes, things like that. Okay, so that's
36:37your net operating income. That's the
36:39cornerstone of the value of a
36:41laundromat. And another way to think of
36:44it is that's the performance of the
36:45laundromat. That's how the laundromat's
36:46performing um and how we know if it's
36:49performing well or not so good. Okay.
36:52So, um let's do a sample deal. I'm just
36:55going to make it up, but it's based on a
36:58lot of deals that we look at, uh over
36:59here. So, you know, the numbers will
37:02they'll make sense. Uh even if they're
37:04not the same numbers as your deal,
37:06that's why the calculators here. Okay.
37:07So, let's just say this one's making
37:10$15,000
37:12per month in gross income. That's total
37:16income. And let's say it's expenses,
37:18including everything like rent,
37:20utilities, any labor, insurance, kind of
37:23all that is maintenance, you know, is
37:26about $9,000 per month. That would leave
37:30us with a monthly net operating income
37:32of $6,000 a month or annually $72,000 a
37:37month. Okay. So the question then is
37:42how do we determine the multiple that
37:44translates this $72,000
37:47into
37:49the value of the laundromat. Okay,
37:51that's where the other three numbers
37:52come into play. So let's say in our
37:55target laundromat here, we've got
37:58equipment that's around 6 to9 years old.
38:02You know, it's not new, but it's also
38:03not old. It's pretty good uh equipment.
38:05You can see that that affects the
38:07multiple over here a little bit. These
38:09multiples we do adjust them here and
38:11there because the market fluctuates. Um
38:15so if you know use the calculator down
38:17the line and these numbers are a little
38:19different. Just know that the market
38:20market has fluctuated a little bit and
38:24that's why the numbers are are
38:25different. Um okay and and again we we
38:28look at hundreds of deals every single
38:30like maybe thousands of deals every
38:32single month. Uh so we're we got our
38:35finger on the pulse kind of across the
38:36nation and even in uh Canada and
38:39Australia, a little bit in Europe even.
38:41So uh we got our finger on the pulse
38:43pretty good here on what the multiples
38:44are looking like. Um okay. So uh so
38:48that's age of the equipment here. Again,
38:50during due diligence, we're going to
38:51have this stuff inspected. Make sure
38:53that it really is this and the owner is
38:56not just telling you it's younger than
38:57it is. Um or the owner maybe doesn't
38:59know. Uh right. So, we're going to, you
39:02know, verify all this and then we're
39:04going to inspect the equipment to make
39:05sure they're in good shape or to at
39:07least know what kind of shape they're in
39:09so that we can make a decision going
39:11forward. Okay? But that's in due
39:12diligence. We'll talk about that in the
39:14next video. Okay? Now, let's talk about
39:17rent amount. Okay? So, let's say in our
39:20example, rent is $3,000
39:24per month. Right? Now, the question is,
39:27is this a good rent for a laundromat or
39:29a bad rent for a laundromat?" And I will
39:31say upfront that a bad lease or high
39:36rent,
39:38that might be the number one cause of
39:40laundromat failure. So, it's really
39:42important that you get your lease right.
39:45Again, we'll talk about that in the next
39:46video, but it's really important. But
39:48for now, the question is, is this a good
39:50rent or a bad rent? Well, the way that
39:52we determine if this rent amount is good
39:55or bad is we want to look at this
39:57number, this $3,000 as a percentage of
40:00the gross income. Okay? So, you can see
40:04for our example here, it's a 20% of the
40:08gross income. So, now the question is,
40:12is that a good percentage or a bad
40:15percentage? Well, let me tell you. Uh
40:18what we're targeting is 25% of gross
40:23income or less. So you might look at
40:26this and be like, whoa, hey, we're doing
40:27pretty good. We're at 20%. Um that's
40:30really good. Um or you know, maybe it
40:33was above that. You know, maybe the
40:34rent's 5,000 a month. Uh and you know,
40:38now we're at 33%. Does that mean we
40:40shouldn't buy it? No, not necessarily.
40:42But it does start to affect the
40:45multiple. All right. That's when it
40:47starts the multiple starts dropping
40:50after about 25% of gross. Okay. Now, you
40:55can see we're in pretty good shape here.
40:57However,
40:59many leases have one of two additional
41:02expenses as opposed to base rent. This
41:04is what we call base rent. This is what
41:06most people just look at. Oh, my rent's
41:08$3,000 a month. But a lot of times these
41:10leases have one or one of two different
41:13expenses in addition to that base rent.
41:16The first one being what we call the
41:17common area maintenance expense or you
41:20might see CAM CAM common area
41:22maintenance expense. It's exactly what
41:24it sounds like. If your laundromat's in
41:26like a strip center or something,
41:28there's some common areas that need to
41:29be maintained. And so the tenants split
41:31the cost of maintaining the common
41:32areas. Maybe there's some lights, so
41:35there's an electricity bill and maybe
41:36there's a gardener or snow removal or
41:40things like that, painting, stuff like
41:41that. Common area maintenance expense
41:44that's included um in your rent. Or you
41:47might what you might have what's called
41:49a triple net lease. Triple net lease, if
41:51you're not familiar with that, greatest
41:53invention ever
41:55if you're a commercial landlord. kind of
41:57a downer if you own a business with a
42:00triple net lease because what this means
42:03is that the tenants pay the
42:07expenses of the of the property. And the
42:10three expenses, the three main the three
42:12nets if you will of the triple net
42:13expense are property maintenance,
42:16property taxes, and property insurance.
42:18Okay? So that means in addition to your
42:21laundromat maintenance, your laundromat
42:23taxes, your laundromat insurance, you've
42:25got to pay for the properties as well.
42:28And this number can vary quite wildly,
42:30but let's just say for our example, it's
42:33$1,000 a month in addition to our base
42:35rent. So now you can see our percentage
42:39of our income has jumped up above that
42:4325% target. Again, doesn't necessarily
42:46mean uh that this laundromat is you
42:51shouldn't buy it or that it's bad or
42:53anything like that, but it starts to
42:54affect the multiple a little bit as we
42:57go through the process. Okay. Now, real
42:59quick on this percentage, sometimes I
43:02I'd say semi often, actually, there's an
43:06opportunity for some quick wins here
43:08because in order to get this back under
43:11uh you know, the 25% mark,
43:15most of the time, it's unlikely you're
43:16going to negotiate a lower lease. I'll
43:18just say I'm a commercial broker. I am
43:21involved in commercial real estate a
43:23lot. I do this for laundromats a lot.
43:25Uh, I'll just say it's not impossible,
43:28but most of the time it's unlikely
43:30you're going to negotiate a lower rent,
43:32but you may have some quick wins to
43:36improve the gross income quickly. For
43:38example, maybe the laundromat, this
43:40happens a lot, maybe the laundromat's
43:42underpriced and you raise equipment, you
43:45know, event price by a quarter or more,
43:48right? uh that could easily bring this
43:51up uh this number up which would then
43:53get this percentage in line again,
43:56right? Maybe there's some improvements
43:57you can make, maybe there's some
43:58marketing you can start doing, things
44:00like that to get this back in line. So,
44:02we also want to look at quick wins, but
44:04we're buying it as it is now, not as
44:07we're going to make it, right? Because
44:08we got to put the work and take the risk
44:10into making it like that. Okay? So, for
44:12our total rent amount here, we're at
44:14$4,000, which again is 26.7%
44:18of our gross income of $15,000. So, that
44:21affects the multiple a little bit. Um,
44:24and then our fourth number that we're
44:27looking for here is how many years are
44:29left on the lease. Now, [clears throat]
44:33question I get asked all the time is,
44:35well, how much time do I need on the
44:37lease? like what's a what's a
44:40you know what's the minimum right and
44:44here's [snorts] my answer to this is I
44:46would say bare minimum bare minimum 10
44:50years you need on the lease but really
44:53I'm feeling uncomfortable until you have
44:55at least 15 years uh on the lease now
45:00that begs the question hey I'm looking
45:02at a laundromat everything's checking
45:03out I really like it but it has seven
45:06years left on the lease or 3 years left
45:07on the lease. Does that mean I shouldn't
45:09buy it? The answer to that is no. And
45:12we're going to talk about how to craft a
45:13compelling offer here. But what you
45:15would do in that case, if everything
45:17else is checking out so far and you
45:19decide you want to make an offer, we
45:21would add a contingency to that offer.
45:23We'll say, "Hey, we want to buy our
45:25laundromat at X amount of dollars." One
45:27of the contingencies of buying this
45:29thing though is that we can add time to
45:32the lease. Um, [snorts] and so I get
45:35asked a question a lot, well, should I
45:36try to get a new lease or should I try
45:40to add more time to the existing lease?
45:43Um, and I'll say my perspective on this,
45:45there's some people who disagree with
45:46this, but I think they're wrong.
45:48Genuinely, like I think they're smart
45:49and they're good, but I think they're
45:50wrong. Generally speaking, it's better
45:54to try to add time to the existing
45:56lease. We do that by adding
45:59five or 10 year options to the lease,
46:02right? So you'd say, "Hey, we have seven
46:03years left. We'd like to add two or
46:06three five-year options to that lease."
46:08So we'd say, "Hey, we want to make an
46:10offer x amount of dollars contingent on,
46:14you know, being able to add two or three
46:17five-year options to the lease, right?"
46:19So then we would have to negotiate that
46:21with the landlord. [snorts] The reason I
46:24say that's generally better, now there's
46:26nuance here. You want to understand the
46:27lease that you're signing up for. There
46:29may be things in that lease that you
46:30need to try to get rid of because
46:31they're going to you. Obviously,
46:33that would be a better opportunity to
46:35negotiate a new lease. But again,
46:38commercial real estate background and I
46:40do this with laundromats all the time.
46:42What I found is that 97 times out of a
46:46hundred, uh, if you do a new lease,
46:49things are not going to go in your
46:51favor. Landlords have a lot of
46:52negotiating power right now.
46:55A lot of laundromats because they've had
46:56long leases, they're under market. So,
46:58if you do a new lease, they're going to
47:00raise the price on you. The terms are
47:02going to be stacked in their favor. So,
47:05a lot of times it's better to try to add
47:08five-year options to an existing lease
47:10as opposed to doing a whole new lease.
47:12Now, again, this is not across the
47:13board. And if you need help with that,
47:15uh, you know,
47:16lawnmatterresource.com/coaching,
47:17we've got, you know, a team that can
47:19help you kind of navigate that and look
47:20at your lease with you and help you make
47:22the right decision. But like I said, a
47:25most of the time adding options to the
47:28lease uh is going to benefit you. So
47:31let's say we've got a, you know, 12
47:33years left on the lease here that you
47:35know, but we're going to add a
47:36contingency to say, hey, we want, you
47:38know, one to two more fiveyear options
47:42on the lease. Real quick before we move
47:44on from that, one question I get asked
47:46all the time is, what's an ideal lease?
47:49What am I shooting for? Or what if I
47:50have to do a brand new lease? What
47:52should I ask for? Um, okay. So, here's
47:55what I would be shooting for. If I was
47:56doing a brand new lease, I'd probably be
47:59looking for a 10-year lease with two or
48:02three 5-year options to renew. That
48:04effectively gives you 20 years to 25
48:07years. Um, I would want to make sure, if
48:10at all possible, those five-year options
48:13had the terms of those options spelled
48:16out. Nothing like market rent. Landlords
48:18want to do market rent on those
48:19five-year options. LaMat owners want to
48:22have a consistent like, hey, they're
48:25going to go up two and a half% a year or
48:273% a year. It's called the escalator,
48:29right? We want to know the terms ahead
48:31of time and be able to control those and
48:33negotiate those ahead of time. That's
48:34what I would be shooting for. And I'd
48:37also want to make sure that those
48:38options are assignable or assumable so
48:41that if I decide to sell down the line,
48:43the new owner could assume those and
48:46utilize those options uh if they chose
48:49to do so. So hopefully that gives you a
48:51quick rundown of that. There's a whole
48:53lot that goes into that. And I should
48:55say upfront like or I guess at the end
48:57here. Uh rent and number of years on the
49:01lease are not the only terms you need to
49:02pay attention to on the lease. The lease
49:04is very important. I always recommend
49:06three people helping you go through a
49:08lease. Number one, you you should read
49:11the lease. I know it's boring. I know
49:13it's hard to understand. They do that on
49:14purpose a lot of times, but you should
49:16read that and understand it to the best
49:18of your ability. You should have a
49:20lawyer probably look over your lease to
49:22make sure you understand all the legal
49:24gotchas. Uh that could be potentially
49:28hazardous to your business there. And
49:29then number three, I would recommend you
49:31having somebody who understands the
49:33laundromat industry read through that
49:36lease um with you as well, just looking
49:39for a laundromat specific gotchas.
49:41Again, we have a team that can help do
49:42that if that's something you need help
49:44with. Automatresource.com/coaching.
49:46Um, and then also I would utilize, but
49:49not solely rely on yet at least, um, AI
49:54to help you go through a lease. You can
49:56dump a lease into AI and say, "Hey, what
49:57are the pitfalls here?" Um, that can be
50:00a really good tool as well. Again,
50:04I don't know that I would solely rely on
50:05that, but that is a tool that you could
50:07utilize. Okay. Um, all right. The last
50:10thing that factor that might uh you know
50:15might impact the valuation here is where
50:18your laundromat is located. So we've
50:19broken it down just to keep it simple.
50:21If you're in a large metro area, if
50:23you're in a suburb or town or a rural
50:25area, you can choose that. Again, I'm in
50:27like LA, so I'm in a large market. What
50:30we found, again, we look at deals all
50:32over the country, all the time, all day,
50:34every day, pretty much. What we found is
50:36that in larger metro areas, LA, New
50:40York, Chicago, some of the Texas
50:43markets, Florida markets, right? Some of
50:45the bigger markets, there just tends to
50:47be more buyer competition. And so that
50:50tends to drive the multiples up.
50:53[snorts] And in smaller markets, if
50:56you're out kind of in the middle of
50:57nowhere, u there's less buyer demand.
51:00And so that can drive the multiple down
51:02there. So, you don't have to utilize it
51:03if you're, you know, if you're like,
51:06well, I'm not really sure. Just leave it
51:07in suburb town, you know, and that won't
51:10affect the multiple at all. But, I'm in
51:12a big market. There's a lot of buyer
51:14demand. So, you can see that it pushed
51:15the multiple up for this specific
51:17location. Uh, and you can see that,
51:21listen, the value of the laundromat
51:24based on, again, this is the numbers the
51:26seller gave us a whole lot of zeros in
51:28here. These are averages. Um, based on
51:31all of that, uh, the valuation of this
51:35particular laundromat is 342,000. And
51:37again, it'll give you a suggested range
51:40here. Um, now I will say, again, we're
51:42going to go through this in the next
51:43video, but I will say that if you have
51:46more detailed information, you can
51:47actually add a whole lot more detailed
51:49information like the monthly profit and
51:51loss or income and expense here for all
51:55the different categories of income and
51:57all the different categories of expenses
51:59here. It'll give you some nice visual
52:01charts and stuff and the trajectory
52:02which again we'll go through in the next
52:04video. Um, but you can get way more
52:07precise with this calculator. But for
52:09this first pass, typically these are the
52:12kind of numbers we're getting and that's
52:13what we're going to utilize. So based on
52:15that, we can make an offer somewhere in
52:18this range of 306 to $360,000.
52:22Um, again, listen, you can make an offer
52:25anywhere that you want to, you know, any
52:27price point. You can go under this 306.
52:29You can go over 360 if you feel like
52:31you're in a super competitive market.
52:33Um, but this will give you a pretty good
52:36range and a pretty good ballpark
52:38valuation based on the numbers the
52:39seller gave you. Okay. So, now once we
52:42have that information,
52:45you [snorts] know, the question is what
52:47do we what are we going to do with it um
52:50to make an offer and to make it
52:52compelling. Okay, so again, we want to
52:55make a strong offer. that calculator
52:57will help you with the valuation. Oh, I
52:59should mention um and I didn't uh let me
53:03just show you real quick the
53:11let me show you real quick the PDF that
53:13you can download. Okay, so you just
53:15click download download report. It'll
53:17create an analysis report. And again,
53:19now you have all the information that
53:21you need uh right here at your
53:24fingertips. all the performance
53:26information, equipment age, all the
53:27lease information, the valuation, the
53:29offer uh suggested offer range, any
53:32details you added in about the business,
53:34and if you got more detail about the
53:37income and expenses, that'll all be here
53:39on the PDF as well. And then you have it
53:42to keep yourself organized. Upload it to
53:45the laundromat dfy
53:47uh.com platform, share it with a partner
53:50or spouse, share it with a lender, uh
53:53and you got it there for you. just to
53:55kind of keep you yourself organized.
53:56Okay. Okay. Now, the question becomes
54:01once I have that information, how do I
54:05craft a compelling offer? So, I'm going
54:07to point you to
54:08laundromatresource.comresources.
54:11There's some resources over there to
54:12help you um help you do that, including
54:16some templates for uh an LOI, which is a
54:19letter of intent um or a purchase
54:21agreement. uh if you're going to do this
54:24yourself, you can use a utilize those
54:26templates to make those offers. There's
54:28also uh this is part of the pro
54:30community, but which you can join is
54:32pretty cheap and definitely worth it if
54:34you're in this part of the process and
54:35you're trying to do it yourself. For
54:37sure worth it. It's a no-brainer. Um but
54:39there's a sample list of contingencies
54:42that you might want to offer um over
54:44there as well. So you might want to
54:47include some of those into your offer.
54:49Okay. So to create a compelling offer,
54:51we want to make sure our valuation is a
54:53a correct valuation, but also
54:55competitive um valuation. And you want
54:58to make sure that you have the
55:01contingencies you need in your offer,
55:04but not contingencies you don't need.
55:06Okay? And the reason I say that is if
55:09you add a whole bunch of contingencies
55:12in your offer, it gets a little
55:15overwhelming and it the more
55:17contingencies you add, the less
55:19compelling your offer is. Okay? Now, I
55:21say that to discourage you from adding
55:24all the contingencies in that
55:25contingency sample uh list into every
55:29single offer because not every offer
55:31needs all those contingencies.
55:33However, I want to emphasize,
55:36do include the contingencies you need,
55:38and if you're not sure, either get help,
55:40ask somebody, or default to including
55:42them, and you can negotiate them later
55:44if you need to. Um, but, uh, again,
55:47crafting that compelling offer, making
55:49sure the valuation's right, and also
55:51having the contingencies you need, but
55:53not the ones you don't need into that
55:55offer. And again, there's templates over
55:57there at lamarresource.comresources.
56:00Um, you may I can't remember off the top
56:02of my head, you may need to be a pro pro
56:04member to utilize those templates. I
56:07think maybe you do, but like I said,
56:09it's a no-brainer. If you're at this
56:10part of the process and you're trying to
56:11DIY this, go for it. Um, if you're out
56:14there and you're like, "Hey, you know
56:16what? I want help finding a deal or I
56:19want help um going through the
56:21analysis," Head over
56:22toresource.com/coaching.
56:24Sign up for a free strategy call. We'll
56:27go through those with you and tell you
56:29what options we have to help you through
56:31that process. We do that for a whole
56:33bunch of clients already. We've done it
56:35for I've done personally I've done over
56:371500 consulting calls now in the last
56:39five and a half, six years. Um, and so
56:43our team is super experienced on doing
56:45this. we've got our system down and can
56:48help you whether you want us to do it
56:50for you or if you want us to do it with
56:52you and make sure that you buy it right
56:55the first time. Um, check out
56:57alarmmyresource.com/coaching.
56:59Okay, all that said, we'll see you in
57:02part three where we'll figure out what
57:04you're supposed to do once you get that
57:06offer in and get it accepted. Now, what
57:10how do we go about the due diligence?
57:11That part is the tricky part and we're
57:14going to show you exactly what we do for
57:16our clients so that if you decide to do
57:18it yourself, you won't get burned like I
57:20did in my first deal, which I'll tell
57:22you a little bit about in the next
57:23video. See you over there.
57:26All right, this is part three of a free
57:29course on how to buy your first lawn. If
57:32you haven't watched the first two videos
57:33yet, go back to that first because those
57:36are exactly how you can find a deal and
57:39get it under contract, including the
57:41tools and resources that we use on our
57:43team that we're offering to you. This
57:46video is about what happens after that.
57:48Once a laundromat is under contract, job
57:50is simple. Not easy, but simple to
57:53verify the performance of the business
57:55before you close. We want you to know
57:58exactly what you're buying before you
58:00buy it. This could be easier said than
58:01done, especially since most are still
58:04cash business cities. But when we help
58:06clients through this phase, everything
58:08we do falls under what I call the four
58:11pillars of due diligence. Pillar number
58:13one, verify the income of the
58:16laundromat. Not what the seller says,
58:18but what the store actually earns.
58:21Pillar number two, verify the expenses.
58:24You know how much money is coming in.
58:25You got to know how much is going out.
58:27Utilities, rent, repairs, etc. You got
58:30to know what the expenses are. Pillar
58:32number three, determine the trajectory
58:34of the business. Who's the lease?
58:36Competition, market trends, and
58:39importantly, whether the store is
58:40improving or declining. And pillar
58:43number four, identifying the value ad
58:45opportunities. What's the plan after you
58:47buy? Pricing, upgrades, marketing,
58:50operations. How do you make it better?
58:53If you're itching to get started, we
58:54keep the tools and resources and
58:56checklists that support all four of
58:58these pillars atresource.comresources.
59:02But this is just a framework. You can
59:04get after right now those four pillars
59:07and the tools on the website. But if you
59:08want to see how we actually perform due
59:11diligence for our clients step by step,
59:14stick around. Let's head back to the
59:16studio and I'll walk you through our
59:18four pillars of due diligence and what
59:20you need to do to ensure that you buy
59:23first laundromat the right way the first
59:25time. [snorts]
59:27Okay, back in the studio to break down
59:29the four pillars of due diligence for
59:32you. Now, if you remember from the last
59:34video, this is part three, by the way, a
59:36three-part course on how to buy your
59:37first laundromat. Part one was how to
59:40find the laundromat. We introduce you to
59:42the laundromatdfy.com
59:44done for you laundromatdfy.com platform
59:47that we created a DIY user type for you
59:50to be able to utilize the same platform
59:52that we use to find deals for clients,
59:55keep track of those deals and to keep
59:57track of brokers also as you're um
1:00:00building relationships with brokers
1:00:02looking for deals. So, go check that
1:00:03out. And then the second video, we talk
1:00:05about how to value a laundromat and
1:00:07create a compelling offer uh for that
1:00:10laundromat to get you to the point where
1:00:12you can do this part three of due
1:00:14diligence uh over here in part two
1:00:18[snorts] um and determining the value.
1:00:19We introduce you to our tool, the
1:00:21laundromat analysis calculator, which
1:00:23you can find atmatresource.com
1:00:25under resources and calculators over
1:00:27there. If you're at a point now where
1:00:29you're trying to do due diligence on a
1:00:31laundromat, this is the video for you.
1:00:33I'm going to show you exactly the
1:00:35process that we take our clients through
1:00:37our four pillars of due diligence uh to
1:00:40help make sure that they buy the right
1:00:42laundromat the first time. Uh they don't
1:00:45have to go through the expensive
1:00:46mistakes that I went through that I
1:00:48talked about. And uh listen, our goal
1:00:51here, one of our core values and our
1:00:53goal during this process is clarity. And
1:00:56the whole point of clarity is we want
1:00:58you to know what you're buying before
1:01:00you buy it. Just like I mentioned,
1:01:01here's here's the process that we
1:01:03utilize that you can take and utilize
1:01:05yourself. Now, if you remember from the
1:01:07last video,
1:01:09most of the time when we're making an
1:01:11offer on a laundromat, we're using the
1:01:14numbers the seller gives us. That's our
1:01:16first analysis. A lot of times there's a
1:01:18lot of zeros. Those numbers are very
1:01:20average and round. They're unverified.
1:01:23Well, once we get that offer accepted,
1:01:26we need to start getting specific
1:01:27information from the sellers [music] so
1:01:31that we can do our second analysis,
1:01:33which is where we use the numbers that
1:01:36you discover [music] in that analysis.
1:01:39Our goal here is to get more precise
1:01:42numbers, as precise as we can, and to
1:01:44use those numbers to uh look for how
1:01:48this laundromat is really performing.
1:01:50Okay, we utilize what we call our income
1:01:52verification stack to [music] do that.
1:01:54And here's the here's the reality is
1:01:56that still to this day, most laundromats
1:01:58are cash businesses. [music] There's not
1:02:00a lot of cash accountability. Sometimes
1:02:03there's reliable collection data or
1:02:07profit and loss information that you can
1:02:09utilize. Sometimes there's, [music] you
1:02:10know, accurate taxes and bank deposit
1:02:13statements, but a lot of times those are
1:02:15missing and it can make it tricky to
1:02:18really value a laundromat. So, what we
1:02:21do is we take a few different methods of
1:02:23trying to determine how much money a
1:02:26laundromat is making and we stack them
1:02:28on top of each other. Okay. So, let's
1:02:30dive into our four pillars of due
1:02:33diligence and with pillar number one and
1:02:35determining the laundromat's income.
1:02:36Okay, so we utilize that income
1:02:38verification stack and what we do is we
1:02:41stack them on top of each other and we
1:02:42look to see, hey, is there anything
1:02:43weird sticking out that shouldn't be are
1:02:46there any anomalies here? And if there
1:02:48are, then we dig into those and we say,
1:02:50hey, what's really going on here? Um,
1:02:52did the seller misrepresent something or
1:02:54did they not know something? Uh, did we
1:02:56do something wrong? Is there something
1:02:58weird happening with this particular
1:02:59laundromat that we need to know about?
1:03:01Right? We don't want to have any big
1:03:02surprises. So, that's what we're going
1:03:04to do to get a get a pretty good sense
1:03:07of how much money this laundromat's
1:03:09bringing in. Let me give you a couple of
1:03:11examples of what you can do to verify
1:03:14the income of a laundromat. Number one,
1:03:18you can do what we call coin
1:03:20collections. That is going through with
1:03:22the owner, collecting coins out of every
1:03:25machine and counting those coins and
1:03:27seeing how much money actually came in
1:03:28for a defined period of time. Okay, just
1:03:30very practically speaking, here's what
1:03:32this looks like.
1:03:34You go in the very first coin
1:03:36collection, you empty all of the
1:03:39machines. Uh you can count the coins. Um
1:03:42but the whole goal here is to start from
1:03:44scratch. Okay, zero coins in the boxes
1:03:48so that the next collection you'll have
1:03:50a defined period of time between those
1:03:52collections. Okay. One of the
1:03:54stipulations or contingencies that you
1:03:56want to make sure you have in your offer
1:03:58is to make sure that if you're doing
1:04:00coin collections, the owner doesn't do
1:04:02any collections without you. Okay? So,
1:04:05you're going to go through and you're
1:04:06going to collect the coins with the
1:04:07owner. Um, I count coins when I do coin
1:04:10collections and even if I'm just
1:04:12collecting in a laundromat that I own, I
1:04:14do them by size and type of machine.
1:04:16Okay? So, I'm not counting the coins out
1:04:19of every single individual machine. I'm
1:04:22counting and recording coins by all the
1:04:25top loaders, all the 20 pounders, and
1:04:27then I count them and record them. All
1:04:29the 30 pounders, count them, record
1:04:31them. All the 60 pounders, count them,
1:04:33record them. Right? So, all the dryers,
1:04:34all right? Or all the 30 lb stack
1:04:36dryers, all the 45 lb stack dryers,
1:04:38right? Depending on what machines they
1:04:39have in there. I'm collecting them that
1:04:41way. And the reason I do that instead of
1:04:44just collecting the whole store and then
1:04:45counting is this gives me a little bit
1:04:47more data to work with in terms of,
1:04:49okay, what machines are popular? This is
1:04:51going to allow me to calculate turns per
1:04:53day for that collection um period. And
1:04:56if you're not familiar with that, a
1:04:57turns per day is one of the KPIs that we
1:05:00utilize, key performance indicators that
1:05:03we utilize in our industry to help us
1:05:07decide how well we're performing, help
1:05:08us benchmark our store. Turn per day is
1:05:11the average number of time each machine
1:05:13is used each day. Right? So you might
1:05:17have a store where, hey, the 20 pounders
1:05:19have 4.7 turns per day and the 40
1:05:23pounders have, you know, 2.9 turns per
1:05:26day. That just tells you that either
1:05:29there's uh less 20 pounders and they're
1:05:32popular or maybe there's a pricing issue
1:05:35or it just gives you a little more
1:05:36information to kind of work with to
1:05:38determine your strategy of how you're
1:05:40going to run your store once you take
1:05:42over. Okay, so that's how I collect
1:05:43coins. You want to do that over a period
1:05:46of two to four weeks. And the goal is to
1:05:50get an average daily collection over
1:05:53that period of time and extrapolate that
1:05:55back out to we use 30.4. That's the
1:05:58average number of days in a month. 30.4.
1:06:01And we want to see that that number, the
1:06:03coin collection number, is pretty close
1:06:05to within, you know, five or so percent
1:06:08of how much money is actually coming
1:06:10into the laundromat or how much money
1:06:13that they said was coming into the
1:06:15laundromat before we made our offer,
1:06:16right? So, we want to see it being
1:06:18pretty close. Now, there are some things
1:06:20that can make it fluctuate. there's some
1:06:23seasonal fluality uh fluctuation
1:06:25fluctuual fluctuations in laundromats
1:06:28and we need to take that into
1:06:30consideration. However, we want to see
1:06:33that, you know, things are not
1:06:34drastically different there. And if they
1:06:37are, then we need to dig into a little
1:06:38bit of why. You know, maybe it's like,
1:06:40hey, it's it's June and June is just a
1:06:43slower month than a lot of laundromats,
1:06:45you know, or there was a big snowstorm
1:06:47and everybody stayed home for 2 weeks
1:06:49cuz we all got locked in, so the
1:06:50collection was lower or something like
1:06:52that, right? So, we want to dig into
1:06:53that. Or it could be, hey, they said
1:06:56more money was coming in that's actually
1:06:57coming in, right? That's a possibility,
1:06:58too. So, we want to do that. um
1:07:01collection count. Now, this is not
1:07:02foolproof. I would not rely solely on
1:07:04this. Owners could easily do what we
1:07:06call salt the minds, which is add
1:07:07quarters or even do phantom washes,
1:07:11which is where they put quarters in and
1:07:13run washes. So, in order to have a
1:07:17little bit of accountability on that and
1:07:18also to see a little bit more what's
1:07:20going on in the store, you know, a lot
1:07:21of people will tell you, hey, go sit in
1:07:23the store, you know, all day for on a
1:07:26weekday and on a weekend and just sit
1:07:28there all day. Um, and you can do that.
1:07:30There's nothing wrong with doing that at
1:07:32all. Uh, I don't know about you, but my
1:07:33time is pretty valuable and I don't
1:07:35necessarily want to sit at a laundromat
1:07:36all day if I don't have to. So, one
1:07:39thing I recommend is um, make it a
1:07:41contingency that you get access to the
1:07:43security camera footage. Now, you can
1:07:45scrub through it quickly and you can
1:07:47also make sure they're not doing
1:07:48anything shady, uh, like running phantom
1:07:51washes or things like that. Right?
1:07:53Again, this is not foolproof, but this
1:07:55is one of the methods you can verify
1:07:58income in our stack of methods. Another
1:08:01one, let me pause real quick. I want to
1:08:04point you to lawnresource.com.
1:08:07Go to the resources tab and you can see
1:08:11guides and worksheets right there at the
1:08:12top. Uh it might say something
1:08:14different. We're getting ready to make
1:08:16some tweaks there, but it'll say either
1:08:17guides and worksheets or tools and
1:08:19resources, something like that. Um, and
1:08:22over there is a bunch of downloadable
1:08:24tools and resources. Some of them are
1:08:26free, some of them are part of our pro
1:08:28community, but again, if you're in this
1:08:29due diligence phase and you're trying to
1:08:30do it yourself, the pro community is a
1:08:33nobrainer over there because you get
1:08:36access to all these tools and resources.
1:08:38We have a monthly Q&A that you can jump
1:08:40into and we can connect you up with a
1:08:42mastermind group in addition to that if
1:08:44you want to do that as well, which is
1:08:45super powerful. But anyways, this is
1:08:47where [snorts] our tools and resources
1:08:50uh live where that can help you kind of
1:08:52go through this including a collection
1:08:54sheet. Um so that as you're doing your
1:08:57coin counts, you can uh collect uh the
1:09:01the information here. You can see a
1:09:03collection sheet right here, right?
1:09:05Okay. So utilize that. Most of the tools
1:09:07and resources to help you go through
1:09:09this process are in on that page um and
1:09:12downloadable there. If you're a client
1:09:14working with us, you actually get a
1:09:15personalized repository of these tools
1:09:18and resources and our a little more
1:09:20advanced tools and resources over there
1:09:22as well. If you're interested in that,
1:09:24check out lauratresource.com/coaching.
1:09:26Okay. Now, the second uh method or
1:09:29income stack that you can utilize that
1:09:31we'll talk about today is what we call
1:09:33the water analysis. Okay? Okay. And
1:09:35that's basically saying [snorts]
1:09:38based on how much water is used in a
1:09:40store and based on how much it cost uh
1:09:43for that water and what the equipment
1:09:46mix is for that store and what the vend
1:09:48price is for that store. Based on that
1:09:50information, we can get a pretty good
1:09:52idea of how much money a store is
1:09:56making. Okay, here's the thing. I know
1:09:57that probably sounds very complicated to
1:09:59do that, but here's the thing is that we
1:10:01have created again on the resources page
1:10:04a water collection spreadsheet that'll
1:10:07actually walk you through that whole
1:10:09process and do all the complicated math
1:10:11for you. Um, I did it so you didn't have
1:10:14to do it. You know what I mean? I got
1:10:16you. Don't worry. U, so go download that
1:10:18water analysis spreadsheet over there.
1:10:20The one caveat to the water analysis
1:10:22spreadsheet is that almost every time,
1:10:26if not every time that somebody's come
1:10:28to me and said, "Hey, the water analysis
1:10:29spreadsheet is giving me a way different
1:10:31number than what the owner's claiming.
1:10:33Should I be worried?" If not every time,
1:10:35almost every time. The reason behind it
1:10:38is somebody just Googled, "Hey, how many
1:10:40gallons of water does a 40B Speed Queen
1:10:42washer use?" And they took that number
1:10:46and input it in there. this spreadsheet
1:10:50depend it's very particular it depends
1:10:52on the specific model of the machine and
1:10:56how much water that particular model
1:10:59utilizes. So if you're getting a way
1:11:01wrong number you need to do some
1:11:03research. So, let me just tell you real
1:11:04quick. The model numbers of most
1:11:06machines are either if you open up the
1:11:09door. If it's a front load, if you open
1:11:10up the door or a top load, open up the
1:11:12top. Usually, there's a sticker either
1:11:15on the door or on the panel inside the
1:11:17door. Or maybe on a top load, it could
1:11:19be on the top or the back of the machine
1:11:21that has the model and serial number in
1:11:23it. So, look there for the model number.
1:11:26You need to do that for every type and
1:11:28size of machine. So, they have 30 lb
1:11:31speed queens and they have 30 lb
1:11:33dexters. You need to have the model
1:11:36number for both of them. And do that for
1:11:38every size washing machine in there. And
1:11:41once you have that data, you're going to
1:11:43get a pretty good sense of how much
1:11:46money is actually coming into that
1:11:48laundromat based on that equipment,
1:11:51those vent prices, and how much water is
1:11:53being used in that store. Okay? Again,
1:11:56it takes a little bit of work, but it's
1:11:58totally worth it because it gives you
1:11:59pretty good data on how much is coming
1:12:01in. Okay, again, that's another way to
1:12:02stack information in our income
1:12:04verification stack, making sure things
1:12:06are just lining up. You can also
1:12:08utilize, you know, and I kind of
1:12:11mentioned this before, but you can also
1:12:12utilize
1:12:14your bank deposit statements, taxes, tax
1:12:18returns, things like that, some
1:12:19paperwork trail to help you verify the
1:12:22laundromat's income. And most easily, if
1:12:27the store either is hybrid, it uses coin
1:12:30and a card or app payment system or is
1:12:33entirely a cashless or digital payment
1:12:35system, then you're able to just print
1:12:38out a report, you know, from those
1:12:39software things to say, here's how much
1:12:41income has come in to these machines
1:12:43over this period of time. That makes
1:12:45things very simple. Um, okay. I need to
1:12:48pause real quick because
1:12:50one thing that we need to be aware of is
1:12:52that the uh self-s serve income. That's
1:12:56mostly what we're talking about today.
1:12:57But many laundromats are adding drop off
1:13:00wash and fold services and pick up and
1:13:02delivery services to their business.
1:13:05Usually, they're e, if you're unlucky,
1:13:08they're going to have a paper ticket
1:13:09model where they just write up all the
1:13:11paper receipts and they have all those.
1:13:13you're going to have to go through them
1:13:14all, put them in a spreadsheet and all
1:13:15that to verify all that. But if you're
1:13:17lucky, they're going to have a software
1:13:18system that's helping them manage that
1:13:21business, that side of the business. And
1:13:24again, that you'll be able to just print
1:13:25off reports for that. The one thing I'll
1:13:28say there is you got to make sure
1:13:29they're not double dipping, which means
1:13:31they're not counting income from the
1:13:33wash and fold and counting it as self-s
1:13:35serve income. Something we see a lot. If
1:13:38you need help with that,
1:13:39laurmanresource.com/coaching.
1:13:40we've got a team to help you kind of go
1:13:42through that and make sure that things
1:13:44are as they seem. We've done that plenty
1:13:46of times. Um, okay. [clears throat] So,
1:13:49that's pillar number one. Determining
1:13:51the income can be very tricky. Again,
1:13:53we've got people that can help you
1:13:55through this whole process if you need
1:13:56it. Listen, if you're going to spend
1:13:58tens or hundreds of thousands or more or
1:14:02even seven figures on a laundromat
1:14:05and you've got questions or you're
1:14:07feeling like you don't exactly know,
1:14:08it's a no-brainer. get somebody in there
1:14:10to help you. We've got a team that can
1:14:12help, but we're not the only ones in
1:14:13town. Find somebody that you trust that
1:14:16you feel confident working with. I would
1:14:18much rather see you go get help with
1:14:20somebody else and make the right
1:14:23decision than not get any help at all.
1:14:25So, again, we've got a team that can
1:14:26help you, but also go find somebody if
1:14:28you don't like that I wear a backwards
1:14:30hat and hair uh that's long because I
1:14:33get that a lot sometimes for some
1:14:34reason. But anyways, I don't own no
1:14:36business because I want somebody else to
1:14:38tell me what I have to wear and what I
1:14:40have to look like. You know what I mean?
1:14:41That's what I'm talking about. That's
1:14:42the freedom we're looking for, right?
1:14:43Okay, let's jump into pillar number two.
1:14:45That's determining the laundromat's
1:14:46expenses. And we know how much money is
1:14:48coming in. We got to know how much money
1:14:49is going out. Uh, typically most
1:14:52expenses have some sort of paper trail.
1:14:54So, that makes things a little bit
1:14:56easier um to deal with. However, we want
1:15:00to make sure that we're accounting for
1:15:03all of the expenses that we're looking
1:15:05for here. Okay, listen. We're going to
1:15:06do things like request utility bills,
1:15:09any kind of invoices or things like
1:15:11that. Obviously, we need a copy of the
1:15:13lease and uh here's a little hack.
1:15:15Again, if you're diying this, here's a
1:15:18little hack. You can go to
1:15:18lawmresource.com, go to the resources,
1:15:21go to the calculators, go back to the
1:15:23analysis calculator that we utilized in
1:15:26the last video. that'll pop up here. And
1:15:29if you go to that performance section,
1:15:32uh remember there's uh you know the very
1:15:35first analysis kind of performance
1:15:38numbers. If you click the add more
1:15:39details button there, you'll see a list
1:15:42of income sources and the most common
1:15:46laundromat expenses. You can actually
1:15:47just use this as a checklist to make
1:15:50sure you don't miss any expenses. Now,
1:15:52not every laundromat is going to have
1:15:54everything in this, you know, in this uh
1:15:58expense list here, okay? Not every every
1:16:01laundromat's going to have that, but use
1:16:03it as a checklist and rule it out. For
1:16:05example, maybe a laundromat is a self-s
1:16:08serve, unattended laundromat, and the
1:16:09owner's taking care of it. There's no
1:16:11payroll. You just want to verify that
1:16:12and make sure that's the case. Or
1:16:14there's no phone bill because they don't
1:16:16have a phone. They only, you know, only
1:16:18online or whatever, right? just use it
1:16:21as a checklist to make sure you're not
1:16:24missing any uh any expenses. And just to
1:16:27tell you like why this is so important,
1:16:29I had a client who missed um in
1:16:32initially we missed that there was a
1:16:34sewer bill and the reason was the sewer
1:16:36bill was going to the landlord and the
1:16:38landlord was not forwarding it over to
1:16:40the the laundromat owner. And so we
1:16:42discovered it and it ended up being
1:16:44about $500 a month of a sewer bill that
1:16:47the the seller didn't know about. And so
1:16:51when we found we went through this
1:16:53checklist, when we found that if we had
1:16:55made the off if we had gone through with
1:16:56the offer we had originally made, um
1:16:59this laundromat was at a 5x multiple. So
1:17:01that $500 a month is $6,000 a year cash
1:17:05flow they wouldn't have had. But it's
1:17:06also $30,000 five times that 6,000.
1:17:10$30,000
1:17:11of equity they would have lost in the
1:17:13business right away. So very important
1:17:16you don't miss any expenses. little hack
1:17:19for you is to, you know, use this as a
1:17:22checklist and just rule out anything
1:17:23that's not an expense for them and uh
1:17:27and make sure you log anything that is
1:17:29an expense and make sure that it is um
1:17:32accurate and appropriate. Okay? And then
1:17:34the other thing that I'll just say is,
1:17:36hey, if there is any questions about it,
1:17:39get help. Okay? Find somebody you trust
1:17:42who knows the business who can help you
1:17:43go through that. I made a very big a few
1:17:47very big expensive mistakes early on. I
1:17:49can tell you it's not pleasant. It's not
1:17:51fun. And it would be well worth whatever
1:17:54the investment is. If you find another
1:17:55owner who will do it for free, awesome.
1:17:57If you find another consultant that's
1:17:59better than us, you're probably wrong,
1:18:01but awesome. Uh and if you utilize us,
1:18:03it's totally worth it. I'll just say
1:18:05that upfront. It's very, very easy for
1:18:07us to make a value of the investment in
1:18:10our consulting uh just by making sure
1:18:13you're doing everything right. Okay.
1:18:14Okay, pillar number three is skipped by
1:18:18a lot of people, but determining the
1:18:19laundromat's trajectory. And let me just
1:18:22quickly tell you what I mean by that. We
1:18:24want to look at the performance of the
1:18:25laundromat over time. Okay? We want to
1:18:27see is business generally trending up
1:18:29and if so, why? How do we keep that
1:18:31train rolling? Is business plateaued?
1:18:33Everything's flat. It's about the same
1:18:34for the last year or two. We want to
1:18:37know why that's happening, how we can
1:18:39increase that uh business. And we want
1:18:42to know, you know, is it dropping off a
1:18:44cliff here? Um is that the trajectory
1:18:46we're on? And what's the saying like
1:18:48don't catch a falling knife? Uh we want
1:18:50to know that. And if it is dropping off,
1:18:53we need to adjust our valuation
1:18:54accordingly. And we need to make sure we
1:18:57have a game plan on how we can level
1:18:58that off and then begin that growth
1:19:01process again for that laundromat. This
1:19:03is what we're looking at in terms of
1:19:04trajectory. We want to know the the
1:19:05laundromat's income over time. We want
1:19:08to know the laundromat's expenses over
1:19:09time. Have there been significant
1:19:11changes in either of those? Um,
1:19:13importantly, we want to know the
1:19:14laundromat's utility usage over time.
1:19:17Definitely the water, also gas and
1:19:20electric. And then we want to guard
1:19:24against loss of income or value over
1:19:27time. Okay. So, the other ones were kind
1:19:29of looking backwards. Now, we want to
1:19:31also look forward. So, that's going to
1:19:33mean a few different things. Okay, so
1:19:34number one, that's where we really want
1:19:37to dig into the lease. Make sure you
1:19:39understand the lease. Um, and make sure
1:19:41that it is all set up to be good to go.
1:19:45You have enough time on it, the terms
1:19:47are good on it, all of that stuff for
1:19:48you so that when you take over, you
1:19:50don't get hit by any lease surprises.
1:19:52Uh, we want to beware of decreasing
1:19:55revenue. So, you know, we want to make
1:19:57sure there's no big problems or no new
1:19:59competitors or things like that that are
1:20:00really going to affect the um the income
1:20:04coming in. We want to be aware of
1:20:07increasing expenses. Uh we want to make
1:20:09sure there's not going to be any big
1:20:11like if you have to have a lease with
1:20:14like a CAM common area maintenance or
1:20:16triple net lease. So, there's not going
1:20:18to be like a big roof repair or
1:20:19something like that coming up. And you
1:20:21want to be aware of any other sudden big
1:20:24hits to the net operating income, right?
1:20:26So like the new competitor coming in or
1:20:29retooling or some kind of unknown
1:20:31problem. We want to make sure we get all
1:20:33of those during the
1:20:37uh you know dur during the due diligence
1:20:39period. We want again clarity. That's
1:20:41what we're looking for. Okay. Okay. And
1:20:43then pillar number four is our val we
1:20:46call it our value ad uh pillar. Really
1:20:49what we're doing is we're making sure we
1:20:52have a plan and a path forward after you
1:20:55take over the laundromat. We want to
1:20:57look for ways to improve the business to
1:20:59increase income, decrease expenses,
1:21:02improve, you know, efficiency,
1:21:05you know, do any repairs, maintenance,
1:21:08anything like that, add revenue streams,
1:21:10anything like that we want to be looking
1:21:12for during the due diligence period so
1:21:15that [snorts] we can hit the ground
1:21:16running once we take over the store.
1:21:19Okay, that was a lot. We went through a
1:21:21whole lot in this course. If you hung
1:21:23through all three of those, kudos to
1:21:25you. I hope you crush it. Um, and
1:21:28hopefully the tools that we provided you
1:21:30and the resources we provided you help
1:21:32you through that process. But if you
1:21:35decide, hey, I'd love help going through
1:21:37all this. This sounds very overwhelming.
1:21:39We understand we help a lot of people do
1:21:41this. Um, we have a done with you model
1:21:44that we will help you through the
1:21:46process. We will be looking over your
1:21:48shoulder, making sure you're doing the
1:21:49right things, asking all the right
1:21:50questions, looking for the red flags,
1:21:53looking over your shoulder, making sure
1:21:54you're not making any big mistakes
1:21:56um to get that laundromat the first time
1:21:59uh the right way. Or if you're like,
1:22:02"Hey, I don't have time to go out and
1:22:03find a laundromat and uh you know, do
1:22:06all this on my own." We want you to
1:22:08help. Uh we've got a team that does that
1:22:10as well. And again, our our laundromat
1:22:12DFY platform is customuilt specifically
1:22:15for that. We added on a DIY
1:22:18um user type for that so that you could
1:22:20do that. But that is custom built for
1:22:22that. It's uh and designed for that on
1:22:26the done for you side. So we can show
1:22:29you more about that side of things. If
1:22:30you're interested in that, check out
1:22:32lawmatresource.com/coaching
1:22:35and uh you know, book a free strategy
1:22:37call and we will talk you through
1:22:39exactly what those packages look like
1:22:41and what you can expect. Okay. Hope you
1:22:44found this
1:22:46I hope you found it helpful. All right,
1:22:47I hope you found it and I hope this is a
1:22:50nudge in the right direction helping you
1:22:53achieve financial freedom or whatever
1:22:55your goals are leaving that 9 to5. I
1:22:58hope that this helps you. If it does,
1:23:00very least drop me a like, maybe a maybe
1:23:03a subscribe and I would love to hear
1:23:05from you in the comments, too. Um, and
1:23:07if you have any other questions, throw
1:23:08those in the comments. love to answer
1:23:11those questions as well.
1:23:14If I can do anything else to help you,
1:23:15hit us upresource.com
1:23:18and we'll see you in the next video.
1:23:20Peace.

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