A few weeks ago, I got a call from a friend in the real estate world with an unexpected business opportunity. Nothing flashy — just a small self-service laundromat tucked into an old strip center. He was only asking $7,250 for the business. At first glance, it seemed like a no-brainer. He said it brought in $3,000 to $4,000 a month in profit. He didn’t market it; the machines were old but functional, and he only spent a few hours a week managing it.
So what was the catch? That’s where the story really begins.
Why I was Interested in This Laundromat
The obvious answer is that I am interested in anything that can make money; however, I was interested in this for a deeper reason. Lately, I have been taking a business acquisition course that raves about cash-based businesses that have stood the test of time: self-storage, laundromats, and carwashes. And since one of my main goals this year is to increase my cash-flowing assets, acquiring a business or rental property is high on my priority list.
What really grabbed my attention was the low entry fee. At under $10,000, it made this deal feel approachable, even though I knew nothing about owning a laundromat. It is a number I could lose without ruining my life, which gave me the confidence to pursue something new. Plus, I would get hands-on experience with a commercial property and landlord relationship– something I have never dealt with before. However, it would be valuable if I ever wanted to turn this into a real estate play.
Operationally, a laundromat also checks a lot of boxes. It’s simple enough that I could eventually delegate most of the in-person responsibilities and manage it passively. It’s also scalable and repeatable– two things I look for before I spend time understanding and mastering it.
But the biggest appeal? It was already cash-flowing. I didn’t have to build it from scratch, wait through a startup phase, or take out a big loan tied to uncertainty. This is a real business, operating with coins in the machines. Despite poor management and a lack of marketing, it was still profitable. That told me it was a growth opportunity just waiting for someone to grab.
The Red Flags
After talking to the owner, my brain wanted to sign on the dotted line immediately. However, I have practiced making my brain pump the brakes when it comes to deals that seem too good to be true. I slowed down and did my homework, and that’s when I started to find a few red flags.
The number one concern is the lease. The current owner’s lease expires December 31st of this year, and there is no option to renew it. This is not ideal for obvious reasons– my value-add strategy relies on refreshing the laundromat: repairing broken machines, updating the lease space and doing some basic marketing. However, investing any money into those improvements would be risky without some sort of lease extension option in place. Worst case scenario? I buy the business, invest in upgrades, and get kicked out at the end of the year. There might be an option at that point to move the machines elsewhere, but that’s expensive– and far from the low-barrier opportunity that initially got me excited.
The next concern is the condition of the equipment and the building. About 25% of the machines are broken, and repairs or replacements will be needed right away to reach the full revenue potential. I have no clue how to fix these machines, so we will have to rely on a technician, which is still an unknown expense at this time.
Then there’s the financials or lack thereof. The business is primarily cash-based. The seller does have coin collection logs and cash deposits going into the business bank account, but no tax records from the previous owners, and he has only owned it since January, which gives me limited data to work with.
After visiting the laundromat in person, I also noticed a few more things: the poor curb appeal of the building with a faded and outdated sign that does not light up and branding under a name I’m not buying. I’d need to immediately purchase new signage so people know the place exists after dark.
Lastly, for full transparency, this business is 150 miles away from me. That means regular trips, at least for the first year, to get it up and running to its full potential. While I’m optimistic about hiring help, the distance does add another layer of time and logistical commitment I can’t ignore.
Doing the Math
On paper, the numbers for this deal work. Let me walk you through them. My startup cost is estimated to be close to $23,000. This includes the business purchase, the lease deposit, estimated equipment repairs, cosmetic improvements, legal expenses, and initial marketing money. Basically, I can buy a cash-flowing business for less than the price of a new car. (Remember my last article? That was my entire point.)
The monthly expenses for the laundromat, including the lease, utilities, insurance, repairs, marketing, and miscellaneous, are about $12,000-$13,000. Subtracting those from projected revenue, I estimate about $3,000 in monthly profit. That’s slightly lower than the seller claimed, but I’m being more conservative– using actual data and budgeting for things he hasn’t accounted for.
Next up: return on investment (ROI). Based on my projected net profit and total startup costs, my annual ROI is over 200%. But, since I’m not getting the whole year, as I will only own the business from April through December, my projected ROI for 2025 is closer to 160%.
So, like I said, the numbers work on paper. I have the opportunity to break even in under a year and make additional profits. But there’s a big asterisk here: those numbers only hold if nothing major goes wrong– no mass equipment failures, no sudden damage to the building, no rent hikes, and most importantly, if the landlord gives me a chance to renew the lease.
The Business Plan (IF I move forward)
This part of this deal has been fun to dive into- thinking through how to make smart, meaningful upgrades without throwing a ton of money at it.
If I move forward, the plan is to start with minor cosmetic improvements: a fresh coat of paint, new flooring, a new toilet in the bathroom, and some basic shelving to improve storage. I’ll also add new branded floor mats and a lighted sign for the building– not only to replace the outdated one but to make sure the sign is visible at night.
Next, I would launch a local marketing push to try and bring in new customers to show off the improvements. The business has not been marketed in quite some time, so hopefully, a little effort here will go a long way. There are also vending machines on site that are underutilized. With some attention and strategic product selection, they could bring in extra revenue with minimal effort or costs.
My goal in the first 6 months of owning the laundromat would be to increase foot traffic, improve the customer experience, and boost profits, all while keeping my costs low.
The Risks
The most obvious risk of the business acquisition is the lease uncertainty. Without a clear option to renew, it will be hard to justify putting significant money into improvements. This has to be solved to make this make sense.
Next is the condition of the equipment. These machines are old, and while some are still running, others already need repairs. The real risk here is the unknown– what happens if several machines fail at once? I would be forced to juggle expensive repairs while learning how to operate a new business with very little guidance from the current owner.
At the end of the day, it’s clear I’m not just buying machines, I am buying problems. The big question is whether they are solvable and at what cost.
The Cliffhanger
Over the past two weeks, it has been fun to let my visionary mind run wild with this idea. If I buy one, my brain wants to buy 50, and my husband is trying to ensure I don’t get too far ahead of myself. We have a few crucial meetings coming up to decide which way the cards will fall. The non-negotiables for us are the lease option to extend, but we also need to verify financials and get more quotes to solidify our game plan. So far, the numbers still seem to make sense. My vision is getting clearer each day. But with the non-negotiable up in the air, the next week will tell me whether I am buying my first laundromat– or avoiding a ticking time bomb. Stay tuned to see what happens.