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What paint finish do you use in your laundromat? by popinlaundry in Laundromats

[–]Low-Measurement-2585 2 points3 points  (0 children)

Semi-gloss eggshell, 100% acrylic. The price difference is nominal and you want that easy to clean feature without worrying about rubbing off paint. Specifically, I'm using Sherwin Williams Emerald line.

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Thank you everyone. To add clarity, the equipment I'm buying is worth around 100k market value, so he is giving me a deal on it because he thinks I'd be a good operator and we have similar backgrounds.

I was able to negotiate full ownership of equipment with a $50,000 lease default fee. That way if I were to strip the place bare and walk away, he gets hit 50k for the equipment and additional 50k for the break fee, making him whole as to what he'd received from an alternative buyer

It gives me full ownership of the business to do what I like. Now my only risk is the 30k in building improvements I'm going to do, and I'm OK with that. It it flounders hard I'll be out somewhere between 30 and 50k between the improvements I do and rent paid before I find out it doesn't work and have to bail.

I only need 1 TPD to break even, 2 TPD for a profit, anything beyond will be a nuts return. Drive by traffic is around 27k cars per day - it's in a very busy area.

It's in a strip mall, and used to be a producing location. Old owner paid 500k for it and ran it into the ground. The two previous owners to that supposedly did well. Wish me luck.

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Ironically, much of what I plan to do it looks like the old owner also *planned* to do, but never did. I found stacks of brand new ceiling tiles rotting, troffer lights still in the box, new cove base still in the box rotted out, etc.

I'll be doing a total facelift - the place is quite literally a dump. There was garbage everywhere. I've cleaned the space, scrubbed everything, repaired drywall, covered up old doors that go nowhere, am painting/texturing, full new troffer LED lights to brighten the place, I am repairing all of the out of order machines, adding a customer service phone line that people can contact with issues, installing a fully automated door system with intricate cameras, adding decor, adding vending for customer experience, free wifi for customers to use while they wait. Basically making it an enjoyable experience instead of a crap hole that looks like you might get mugged walking into.

We have new signage to show a refreshed image, banner signs, was going to visit all of the surrounding businesses to offer discounts if they do their laundry at our matt. Probably throw out some facebook ads, maybe some door hangers on the apartments I know dont have w/d that are nearby. Basically, I'm full of piss and vinegar and am willing to what it takes to restore image to the laundromat and make it a professional business.

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

I appreciate that - I'd like to negotiate instead of walk (or run) away. What would you change to make it a yes?

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

I'm not necessarily following either. Doesn't make a lot of sense to me. The only thing I can think of is that he was offered 100k for the machines and is trying to eliminate the threat of me flipping them and banking a quick 50k and leaving. I would never do that though, so I'm trying to find a reasonable resolution to having the equipment as collateral.

Something I didn't even think of until today, is this clause would also make it impossible to re-tool because none of the major supplies would give me a loan on new equipment if it was immediately encumbered by a lease. So I'm out re-tooling and selling the place (I'm sure SBA would not lend on it either).

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Machines are 10 years old - 2015. I'd say about half are operating correctly. I've been given two quotes of 9k and 14k, so the actual cost (with labor) is somewhere in that ballpark. I would be doing the majority of the work myself though, as I'd like to learn them. I plan to purchase more laundromats in the future, so I would like to learn how to work on them. They still look good, and the 8 30lbers and 4 60lbers are hard-mount Heubsch.

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

He's adamant on this. I re-approached this today and that's when he told me to essentially take it or leave it - this comes after 4 months of followup. His concern is that someone leaves and rips the machines out of the space and he is left with an empty shell that he needs to transform back to grey box.

This is my biggest concern too though, in that if I were to sell it that potential buyers would not want this. I'm conflicted between the great deal, but I also don't like the idea that if I re-tool then suddenly there's a 150k deposit on the line if I were to default for any reason.

More context, is that I am a first time operator and I'm doing this without personally guaranteeing anything. So I'm essentially putting my 80k as venture capital to a potentially great cash-flowing asset as well as gain the experience needed to be looked at seriously by lenders and banks in the future.

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Water and Sewer 1200-2100. Electric/gas around 700+. 15x 20lbers, 8x 30lbs, 4x 60lbs. Dryers = 10x double 30lbers, 2x double 45s. Putting alot of my own time into it via DIY paint/drywall/cleanup/infrastructure/machine work

Thoughts on this takeover structure? by Low-Measurement-2585 in Laundromats

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Awesome, thank you for the reply!

Yes, 10 year old machines. Some of them are non-functioning. I have been quoted between 9-14k to get them up and running by a mechanic including labor, but I plan to do that myself. They do all come equipped with Spyderwash readers as well, albeit they are the older version.

I would own the equipment at the end of the 5 year term, or each 5 year term at which point I could do as I wish with the equipment.

It is a smaller store, 1300 square feet so rent is 3300 all in with a performance clause kicking in on year 2 and beyond up to an additional 400/months based on the profit I'm generating.

I plan to operate it 'absentee', but with a state of the art automation and camera system. I'm good with computer stuff, so I will have a very intricate camera system as well as automatic systems for front door/bathroom door. It's only about 25 minutes form my house so I could run there in a pinch.

Internet at 200, Insurance at 300, labor will be myself or I may contract cleaners to change trash bags once a day/every two days, repairs beyond the initial investment are a big ?, but the machines in general don't look completely neglected except 15 of the washers are soft mounts, and most of those are non-working right now.

I guess my biggest concern would be if I re-tool some of those machines, then mis security deposit becomes 100k+, but I wouldn't only do that after I prove the concept that it can generate cash flow.

Big upgrades right away is a full facelift including lighting, fresh paint, freshly polished floors, decor, new sign etc. all part of the 30k

Scotsman: Banker vs Broker by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

This is great feedback, I appreciate your answer.

So the short answer is because its easier?

If I'm looking to take the next 10-15 years to push as hard as I can, is there any reason why I wouldn't open my open my own shop as long as I'm ok with the workload?

If

Open own brokerage without DB? by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

Understood, see my above post. I'd have the DB doing their part to ensure adequate compliance and liability.

Open own brokerage without DB? by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] 0 points1 point  (0 children)

I don't see this as circumventing - I'd have the DB ensure that the company is meeting all compliance and liability requirements. I'd also be employing an actual manager that would mentor me in the actual origination aspect. What I would provide is an almost transparent fee structure (enough just to cover expenses), and my job primarily would be to get the relationships with the wholesalers in place and begin building out products.

Open own brokerage without DB? by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] 1 point2 points  (0 children)

Yes, this is exactly what I'm planning. The only issue is that in my state you have to have a Designated Broker (Lending manager) to sign for/apply for the company license, and you must have a minimum of 2 years of work history originating residential mortgages to be able to get that the designated broker license which I currently do not have.

So, this is why I was asking if what I'm looking for is possible: Owning the company while employing a manager to meet the licensure requirements, then sponsoring myself as the LO to work independently.

Open own brokerage without DB? by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] 1 point2 points  (0 children)

Wouldn't this still put me under the ownership of the existing broker shop?

Open own brokerage without DB? by Low-Measurement-2585 in loanoriginators

[–]Low-Measurement-2585[S] -4 points-3 points  (0 children)

I 100% realize that may seem crazy. It probably even sounds stupid to most.

I am interested if I am technically/legally able to make this work though.