Financing my first laundromat!

[Mike Sisson]

Hey all,

Curious if people think this is doable. I really wanted to get into the real estate business as I felt I had a good handle on it but as I started to get some momentum having 2 properties the market went haywire so I’ve been looking for other ways to optimize my money. My current properties have ~250k + ~70K in equity, cash flow is ~700/month on each as furnished rentals (no airbnb allowed). I have about ~50k in liquid cash as well. I’ve been looking at laundromats in the <200k range and have found one I’m interested in. Cash flow is estimated ~45k/yr and I’m about to engage in talks with the broker ( have a list prepared from Jordan’s resources and a friend that owns a few businesses). If you were me, how would you go about the financing of said purchase? Aim at cash + sell financing? Use a home equity loan + some cash? Only home equity? Search private financing? A combo of any/all of these? I’ve heard SBA loans can take forever to obtain so the options listed are a bit better?

Thanks in advance everyone!

Mike

[Jason Dodge]

Every situation is different Mike. Do whatever provides you with monthly cashflow after you make your debt payment. Then work on improving the store and improving cashflow.

[Mike Sisson]

Hey Jason thanks for the response! I remember listening to your episode – given your experience with different types of financing I’m surprised you don’t have a preference haha. I think I prefer the idea of using OPM as much as possible so I think I’m gonna look at home equity first and move from there given seller is willing to finance about 60k.

[PAUL Bulkley]

Is it normal for an owner to not provide a p and l statement or not want to do a coin count until a contract is signed?

[Dante Roa]

Paul after signing an NDA and making an offer (non-binding) and showing intent that you’re serious, the seller should provide you with whatever financial document related to the business you request/perform a coin count. If they don’t, then walk away.
I am not sure what you mean until a contract is signed.

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