$350K
$744K
0.5x
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This is a coin based operation. Owner does not need to be present 24/7. The coin based side of the business generates money. But with fluff and fold the owner generates more money. Most customers work...
Why we like it
- Earnings Quality: Reporting $744K cash flow on $350K revenue implies either aggressive expense structure or potential data error, but the 0.47x multiple suggests strong cash generation relative to asking price if numbers reconcile properly.
- Durability & Moat: Coin laundromats are classic recession-resistant businesses with sticky customer bases in dense urban markets like LA, where many residents lack in-unit washing machines and need reliable laundry access regardless of economic conditions.
- Market Tailwinds: Los Angeles rental market heavily skews toward units without laundry hookups, creating consistent demand from renters who have no alternative to commercial laundromat services.
- Operator Advantage: The dual revenue model allows new owner to scale fluff and fold services significantly while maintaining the passive coin base, with clear upside in a market where time-pressed professionals will pay premium for convenience services.
How to improve it
- Service Expansion: Immediately assess demand for pickup and delivery laundry services to capture higher-income customers who value convenience over cost in the LA market.
- Revenue Optimization: Install card readers and mobile payment systems to capture customers who avoid cash transactions and increase average ticket size through easier payment options.
- Operating Hours: Extend or optimize hours based on customer traffic patterns to maximize machine utilization during peak demand windows, particularly early morning and evening rushes.
- Ancillary Revenue: Add vending machines for detergent, fabric softener, and snacks to capture additional margin on captive customer base during wait times.
- Fluff and Fold Growth: Systematically build the higher-margin service offering through targeted marketing to local apartment complexes and busy professionals within delivery radius.
Diligence notes
- Financial Reconciliation: Verify the cash flow figure versus revenue relationship, as $744K cash flow on $350K revenue requires explanation of expense structure or potential reporting inconsistency.
- Lease Terms: Confirm lease structure, remaining term, and renewal options since location quality drives most of the value in laundromat investments and lease risk can destroy returns quickly.
- Equipment Condition: Conduct thorough inspection of washer and dryer fleet including age, maintenance history, and replacement capital requirements over next 3-5 years.
- Revenue Verification: Request 12+ months of utility bills, coin collection records, and cash receipts to validate reported revenue and understand seasonal patterns in customer usage.