Buying a coin laundry in today’s market is difficult at best, with banks pushing themselves away from the table, not looking to expose their portfolio, while some laundry brokers are making it virtually impossible by trying to sell laundries with few records and/or no audited books or financial statements.The financial meltdown of 2009 was a bloodbath for many across the country who suffered through what was nothing less than a living nightmare. The banks that are doing deals are now asking for more than 50% cash down and looking for more than a little extra collateral to secure a deal, while some brokers are trying to push their deals without actual records, which shows no integrity.The reason people buy into a cash business is because it’s a cash business, but with no real way to verify the actual income being generated from an existing laundry, I have to say, “buyer beware.” I agree that purchasing an existing laundry is less risky than building a new laundry, but you need to have the actual, reported books and records to account for the bottom line.There are laundries closing across the country, and although many are doing well despite the economy (the industry is, for the most part, recession-resistant), many are making deals without the books and records, and that’s a formula for a disaster. Take your time when looking to buy. This past month, I received numerous calls from new laundry owners after they had made the purchase, and unfortunately, in most cases, that’s going to be too late for me to help you.Now, there are a few who do report all their income on their tax returns. These are the laundries that one should explore when in search of a laundry or when purchasing any business. I highly recommend that, if there are no tax returns, you continue looking.BUYER BEWAREThe buy price on the average laundry has also changed. So, if you do make a deal, don’t overpay. The going rate for purchasing a coin laundry in today’s market is maybe two-and-a-half to three times net cash flow. If any broker, regardless of who it is, says any different, I advise you to run!There are stories about some brokers telling potential clients, “Well, just this past year, people paid up to six times net cash flow.” That’s a lie, and that broker is running a hustle on you. Don’t let someone cash out on your life savings.WHAT TO DOThe laundry industry is changing, and fortunately, those who implement the formula for success found in these articles and in American Coin-Op are the ones who will not only survive, but thrive. Let’s make 2010 a year to be remembered by not only meeting our goals, but exceeding them.Feel free to contact me, so you’re covering all your bases and not taking unnecessary risks by trying to do this on your own.
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