Location, Leases, and Analysis: The Key Factors for Buying and Operating Laundromats w/ Jordan Berry

Jordan Berry is a former pastor who made a bold decision to step away from his vocation after 15 years to seek a different path. Unsure of what to do next, Jordan and his family had the idea to rent out their house in Southern California and use the money to buy a condo in Hawaii. However, Jordan's wife had a different proposition – buying a laundromat instead. Intrigued by the concept of generating income that wasn't tied to their time, Jordan and his wife took the plunge and became laundromat owners. Although not entirely passive, the business offered a level of flexibility and potential returns that intrigued them. This unexpected leap into the laundromat business would mark a significant turning point in Jordan's professional journey.

Connect with Jordan Berry: https://www.laundromatresource.com/

Key Topics and Bullets:
• Financing options for laundromats
- Manufacturers and independent lenders offer financing options
- Equipment financing may offer 100% financing with down payment requirements
- Traditional financing for real estate requires higher down payments
- SBA options available, but qualifying can be challenging
- Seller financing is common due to difficulty in securing traditional financing
- Limited or inaccurate financial records can affect securing financing
• Different business models for laundromats
- Self-serve, service-side, and pickup and delivery models
- Pickup and delivery services gaining popularity during COVID
- Location important for self-serve laundromats
- Self-serve targets renters with below median income
- Service-side caters to customers with above median income
• Debate on replacing machines in the industry
- Some see keeping old machines as a badge of honor
- Others believe in replacing for efficiency and customer satisfaction
- Speaker suggests replacing around the 15-year mark
- Benefits of replacing include decreased repair costs, lower utility costs, and increased efficiency
- Shiny new machines attract more customers and allow for higher prices
• Rehabbing and marketing a rundown laundromat
- Speaker chose not to sell but invested in new machines and rehabbed space
- Rehabbing reputation proved more challenging than renovating the physical space
- Marketing strategies used include flyers, Google ads, and Facebook ads
- Suggestion of organizing a wow event or grand opening to draw attention
• Importance of location, lease, and deal analysis
- Location crucial and difficult to move once established
- Good lease necessary to avoid business failure
- Analyzing the deal and knowing what you're buying is key
• Tracking income and expenses in cash-based business
- Laundromats mainly cash-based, making tracking challenging
- Knowledge of tips and tricks necessary for accurate assessment
• LA's competitive laundromat market
- Laundromat industry historically lacked advertising
- More owners realizing the importance of customer care and promotion
- Negative industry image due to frequent breakdowns and poor experiences
• Focusing on customer satisfaction and profitability
- Convenience crucial for customers, but potential for expansion in competitive areas
- Opportunities for profitability by filling gaps and providing better experiences
- Basics of cleanliness, working machines, friendly attendants, and full coin changers important
- Loyalty incentives, promotions, and positive atmosphere enhance the experience
• The misconception of laundromats as passive businesses
- Disagreement with belief that laundromats require little effort from the owner
- Acknowledgment of high returns and cash flow with relatively less work
- Dealing with customers and maintaining machines can be demanding
- Proper management can make the business more passive as it scales

TIMESTAMPS
00:00:00 reimastermind.net
00:02:31 Misguided broker led to financial losses.
00:06:33 Laundromat options: self-serve or service-based with pickup/delivery. Consider demographics for location choice.
00:10:09 Rehabbing laundromat harder than expected, lacked promotion.
00:13:23 Laundromat industry evolving, opportunities for improvement.
00:15:32 Take care of basics: cleanliness, friendly staff, working machines. Ensure coin changers are full. Make customers comfortable and happy. Offer loyalty incentives and create a positive atmosphere.
00:21:18 Replacing machines at around the 15-year mark can benefit businesses.
00:25:54 Replacement options vary, balancing costs and impact.
00:27:35 Laundromats: Limited financing options, seller financing common.
00:31:03 Round numbers, contingencies, verify income and expenses.
00:37:18 Riskier investment; consider stable, better-performing option.
00:38:56 Laundromats are not as passive as thought
00:41:46 Great conversation, check out laundromatresource.com for expertise.