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Due diligence question - advice for taking tour of location

  • 1.  Due diligence question - advice for taking tour of location

    Posted 4 days ago
    Edited by Michael Brock 4 days ago
    So I'm seriously considering buying a laundromat.  I have the sellers utility bills, his self-reported P&L statement, a washer/dryer machine list with model numbers and serial numbers, and a tour scheduled this week with the owner and his agent (and my real estate agent.  The building/property is part of the sale).  I've also spent time in the store doing laundry.

    So while I'm on this tour, I need advice on what to look for, what questions to ask while I have the seller's undivided attention in-store.

    I'm assuming I need to ask about age of water heater, plumbing, maintenance records, A/C unit...  other ideas?  Any specifics I need to ask?  Any evidence of specific problems I should be on the look-out for?

    The equipment looks old and heavily used.  Dexter stuff.  Just glancing at the serial numbers I'm thinking made in 2004, mostly.

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    -brock29609
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  • 2.  RE: Due diligence question - advice for taking tour of location

    Posted 4 days ago
    So you are purchasing the property. That would be a good thing. You have a person involved that only cares about commission. That may not be a good thing. You are purchasing equipment that is at the end of their life cycle. So you are buying the real estate and the good faith. Now figure out what new equipment installed will cost. Add that into the equation and you have your answer.

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    Curt Harrington
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  • 3.  RE: Due diligence question - advice for taking tour of location

    Posted 3 days ago

    Michael,

    If you do a search for "due diligence" or "purchasing laundromat" you will find tons of answers to your question.  



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    Laura Ridley
    Laura's Laundromat
    Mustang, OK
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  • 4.  RE: Due diligence question - advice for taking tour of location

    Posted 3 days ago
    I'm pretty well read up on due diligence in general.  Hoping for specific advice on in-store things to look for.  Haven't found much on that.

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    -brock29609
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  • 5.  RE: Due diligence question - advice for taking tour of location

    Posted 3 days ago
    Edited by LARRY LARSEN 2 days ago

    Here is a 3 page form I recommend you take with you and fill out on your first interior inspection:

    https://laundromat123.com/Home_Page/InspectionForm.pdf



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    Larry Larsen
    Laundromat123.com
    Anaheim, CA
    Distributor - Insurance - Consulting
    Cell: (714) 390-9969
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  • 6.  RE: Due diligence question - advice for taking tour of location

    Posted 3 days ago
    Michael,

        There's a lot to that question. I'd recommend finding and working with a good local distributor with a long track record and good references. Take your time choosing one that you have a good gut feeling about the type of person that they are. Good distributors will be willing to help you in this process and overall to help you be successful without wanting to charge you extra, just for advice or consulting fee's.

       Also I highly recommend the book "Today's Coin Laundry" which is sold on the CLA website. It is packed full of very very useful information. If you have specific questions, I'm happy to answer them as well. Best of luck to you.

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    Dave Menz
    Queen City Laundry Chain
    https://www.queencitylaundry.com
    Laundry Magician Pickup & Delivery
    https://www.laundrymagician.com
    Cincinnati, OH
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  • 7.  RE: Due diligence question - advice for taking tour of location

    Posted 2 days ago
    Hi Michael,

     Certainly sounds like an exciting and interesting time for you at the moment.  If I read correctly, the "tour" is this week (if it hasn't happened already). As such, you might find yourself pressed for time.  I think the responses to your question have been both general and minimal because you didn't provide additional or specific details.  That being said, kudos to you for spending time on due diligence, asking the right questions, and collecting usable and meaningful data.  All very good actions.

     You did not however identify what you found.  For instance you said you did laundry there.  What was your take away? How many times did you do that?  Did you network with customers or staff?  What is the condition of the equipment?  You established that it's circa 2004 bit you didn't elaborate in what shape it was in.  How many out of order signs did you see. Is the owner full time or part time?  Who does the repairs?  Does he or does he perhaps have a "go to" repair person?  This question (and answer) is very important?  Will he share his source or can you shadow him if he does his / her own repairs?

     While the "tour" is well and good, I would surmise that you already have some of the most useful information.  The "tour" will get you into the back room, the office, you will get to see how organized he is, condition of the office equipment and management skills, Infrastructure, condition of the plumbing, electrical panels, AC unit, maintenance and repair data etc.

     Key questions to ask or understand is to identify the repair costs.  Amount spent per week or month. Spare inventory?  If machines are down how long and why?  Will the tour include witnessing any "pulls"?  If the owner is well versed and tenured, said owner should be able to give you documented or verbal trend data such as busy seasons, weeks, machine use, customer habits, most poplular to least popular machines used etc.

    Look for spikes, differences, and / or trends in the utility bills and see if they substantiated with what is established by the owner insofar as business trends go etc.  Common sense stuff really.

     I am sure there is more but these are some quick off the top of my head type of things that come to mind.  Post back or feel free to email or call if you have specific questions or need to do some sort of quick check.

     Good luck.

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    Juan
    Cocoa, Fl
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