How To (Not) Lose Money Buying A Laundromat

GM. This is the Generational, the building wealth newsletter that f*cks.

Remember the show Silicon Valley? The guy that f*cks, according to Russ Hahnemann is not the visionary startup founder, or the nerdy engineers. It's not the "idea guy" either.

It's Jared.

The tucked-in shirt, khaki wearing dude who knows how to use Excel and make sound money decisions. Be Jared.

Here’s what we got for ya this week:

• YouTubers teach you how to buy laundromats

• FREE laundromat analysis spreadsheets

• Meme of the Week

YOUTUBERS ARE TEACHING US HOW TO CASH FLOW WITH LAUNDROMATS

You can find anything on YouTube. Especially ways to make money.

Because everyone wants financial freedom, right?

We all want to tell diversify our income, be anywhere we want, and do whatever we want. And, of course, we want to be able to do this with the least amount of work possible.

This is sometimes referred to on the internet as "Passive Income".

Weirdly, there is an uptick in people wanting to buy laundromats.

Yes, coin laundromats.

But here's the rub.

Laundromats are not the unicorns and rainbows of Passive Income you might think they are. If you don't know what you're doing, you could lose all your hard earned moolah.

How do I know?

I've lost a lot of moolah buying laundromats! (made a lot too).

At one point my company was the largest washer of clothes east of the Mississippi. We washed over 30 million pounds of laundry. Truck loads full. Night and day.

I know what works in this space better than most because I lived it.

And since I want nothing more than to help you build generational wealth, I'm here to help you.

Enter YouTubers

There's a genre of YouTube starting to crop up telling you how to buy laundromats and I'm here for it.

Even better, some are promising that you can do it for $0 down! This is going to be great.

So who are the players and what do they promise?

Brandon Schlichter aka "Investment Joy"

Investment Joy has been posting on YouTube for the last 5 years but he actually started out doing real estate videos.

It wasn't until about a year and a half in that he posted his video titled "Should I Buy This Laundromat?".

What sets Brandon apart from so many others is just the sheer authenticity of what he's doing. He has nothing to hide. What you see is what you get.

Brandon lives in Ohio. He buys real estate. He buys laundromats.

And he prints cash.

Brandon gives a very honest look at what a laundromat is all about.

It's not glamorous. It's not a status thing (at least it wasn't until now). And it won't make you a millionaire overnight.

But, done right, it can be a fairly passive investment that can be replicated over, and over again.

I watched all of Brandon's laundromat videos. Here's what they boil down to:

1. Opt for seller-financing in most cases. That's how he's able to buy some of these laundromats with as high as $15k down to as little as $0 down. Explain to the seller the tax advantages (hint: no spike in income pushing owner to higher tax bracket).

2. Avoid operationally intensive things like offering wash & fold service or pickup & delivery. This is a passive income gig. Stop by once a week and collect your cash.

3. Always try to buy the underlying real estate. This way you avoid rent increases each year which eat into your margins.

4. Get creative when figuring out your offer. Here's what I mean:

Brandon literally called the water department and asked for the records of a laundromat he wanted to purchase.

Baller.

He then makes a math lesson out of it for his kids.

You take the gallons of water the laundromat used per month and look up the models of the machines in the shop to figure out how much water they use per load. Now you can work the water consumption back on a per load basis using average profit (hint: 25-30% is good. 40% is excellent). Boom.

Brandon's humility and openness are what make him worth watching. Check him out.

Danny D'Angelo aka "The KING of Laundry" (and his DVDs)

When I first found Danny (thanks YT algorithm!) I honestly thought it was a scam.

Nope.

Danny has been buying laundromats for over 20 years. And, get this, used to sell a course on DVD! teaching aspiring entrepreneurs how to replicate his system.

What is his system?

Danny buys laundromats for free.

And it's anything BUT a scam. Actually, it's pretty genius.

What I like about Danny is that he's creative. He's aggressive. And he isn't afraid to put his methods out for free so people can see for themselves. It's not for everyone. And he doesn't care.

Danny's method basically boils down to this:

• Don't be a sucker. Avoid buying a laundromat from an existing owner–why would an owner ever sell a cash cow?

• Avoid brokers too. They just want their commission. Do your own research. Go to every laundromat in the area you're considering.

• Find the ones that look run down (out of service machines, listing for sale on Craigslist) and call the landlord.

• Explain to the landlord that their tenant is on the verge on not being able to pay the rent. You may find out they're actually behind on the rent.

• Explain to the landlord they'd be better off terminating the existing lease and leasing to you instead.

• You get (a) new long-term lease negotiated directly with the landlord (b) in a location the community is already familiar with, and (c) without having to "buy" the business from an existing absentee owner.

Plus he teaches you about commercial lease negotiation, which, in my opinion, is a skill that will help you in any area of business.

Free rent.

Locked in rental increases.

The guy gives a master class in the unspoken parts of the business.

Faares Quadri

The other YouTuber worth mentioning just became legally able to drink.

A 21 yr old from Chicago, Faares Q is the real deal.

He's young and he's still learning but I give a ton credit to anyone jumping into laundromats and figuring it out.

I'd keep my eye on him.

Invest Passively In Laundromats

What if you don't, like, actually want to deal with the headaches of running a laundromat but still want those 20-30% returns?

Enter Diligence Capital.

Jordan, Ross, and Michael over Diligence have a ton of experience, and frankly lots of free information they put out to help other owners.

When I heard about Diligence Capital I knew I had to share it with you.

I think we'll see more and more of these private equity type funds available for retail investors.

The trick will be working around accredited investor rules.

I'm not affiliated in any way, shape, or form with Diligence and I'm not receiving any affiliate revenue or commission for recommending them.

I just think it sounds cool.

Maybe Jordan will let me interview him so we can get the deets.

FREE LAUNDROMAT ANALYSIS SPREADSHEETS

Want some freebie spreadsheets and deal docs to help you analyze your next laundromat deal?

Reply back with a "1" and I'll send em' over.

My treat.

MEME OF THE WEEK

That's a wrap for today! If you want more check us out at @_generational & @tomharari