Financial Freedom Fast
Financial Freedom From Laundromats w/ Jordan Berry
Ever dreamed of owning a business that could fast-track your journey to financial freedom? Well, you're in for a treat as we delve into the unexpected yet profitable world of laundromats with none other than Jordan Barry, the Laundromat Resource. Jordan shares his intriguing narrative of transitioning from being a pastor to owning laundromats, revealing the valuable lessons learned along the way. Listen as we navigate the risks and rewards of this industry and explore how Jordan creatively leveraged financing strategies during challenging times.
Transform your perspective on the laundromat industry as Jordan sheds light on its promising potential. With an alluring 20 to 25 percent return on investment on an average laundromat deal, the prospect of owning just a few could be your ticket to financial independence. Balancing the time commitment needed to run these ventures, the choice between different business models, and the importance of utilizing technology for efficient operations, prepare to be enlightened by Jordan's wisdom on operating a successful laundromat business.
Ready to maximize your investment returns? Let Jordan guide you on how to enhance the value in laundromat investments, sharing the vital components of building wealth - cash flow, equity and tax advantages. Get the inside scoop on identifying a good laundromat investment opportunity, weighing the pros and cons between turnkey and fixer-upper properties, and how to strategically invest your laundromat profits into real estate. Join us as we uncover this alternative investing strategy that can supercharge your wealth and accelerate your journey to financial freedom. Trust us, you don't want to miss this!
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Ever dreamed of owning a business that could fast-track your journey to financial freedom? Well, you're in for a treat as we delve into the unexpected yet profitable world of laundromats with none other than Jordan Barry, the Laundromat Resource. Jordan shares his intriguing narrative of transitioning from being a pastor to owning laundromats, revealing the valuable lessons learned along the way. Listen as we navigate the risks and rewards of this industry and explore how Jordan creatively leveraged financing strategies during challenging times.
Transform your perspective on the laundromat industry as Jordan sheds light on its promising potential. With an alluring 20 to 25 percent return on investment on an average laundromat deal, the prospect of owning just a few could be your ticket to financial independence. Balancing the time commitment needed to run these ventures, the choice between different business models, and the importance of utilizing technology for efficient operations, prepare to be enlightened by Jordan's wisdom on operating a successful laundromat business.
Ready to maximize your investment returns? Let Jordan guide you on how to enhance the value in laundromat investments, sharing the vital components of building wealth - cash flow, equity and tax advantages. Get the inside scoop on identifying a good laundromat investment opportunity, weighing the pros and cons between turnkey and fixer-upper properties, and how to strategically invest your laundromat profits into real estate. Join us as we uncover this alternative investing strategy that can supercharge your wealth and accelerate your journey to financial freedom. Trust us, you don't want to miss this!
Download my FREE E-Book on Scaling Through Partnerships NOW
CLICK HERE
Apply for mentorship with Matt and the FAST FI Coaching Community:
APPLY NOW
Follow Matt online:
Instagram
Facebook
Youtube
If your goal is financial freedom ASAP, it's to leave your W2 job. Buying a business like a laundromat is probably gonna get you there faster because the returns can be so great. To frame it out for you average laundromat deal, you're looking at a 20 to 25% return on your investment unleveraged. When you use a loan or apply leverage appropriately, that number can go up and that's just a base hit deal. So if you get one, two, three of these, most people are gonna be financially free with one to three laundromats.
Speaker 2:Welcome to the Financial Freedom Fast Podcast, the show that teaches you how to buy back your time and live life on your terms. Learn how to confidently leave your nine to five from guests who've done it themselves. Whether you wanna lay on a beach, travel the world or focus on your passions, this show will give you the tools to do what you want when you want. Now here's your host, matt Emmabio.
Speaker 3:What is up? Financial Freedom Fast Fam Today we have on Jordan Barry on the podcast. He's the laundromat resource, aka the laundromat king, the laundromat man, the guy that you wanna go to for laundromat information. Today we dive into everything that you need to know to be able to go out and buy your own laundromat. First of all, why would you even wanna buy your own laundromat? We dig into the cash flow, the returns that you should and can expect from a laundromat and, most importantly, we dig into the mistakes, the big mistakes of the things that you need to watch out for, the problems that you could run into and that you should watch out for, so you don't run into them yourselves, because it can save you time and money, and that is what Jordan is all about and his laundromat resource is all about. So I am so excited for you guys to be able to get that information from him and my people.
Speaker 3:If you haven't downloaded my ebook yet on how to invest in assets with partners so you can get into money into assets with no money out of your own pocket, then you need to go to the show notes right now and download my free PDF guide. All you have to do is click the link put in your email, put in your name, and then click download. It'll send you an email In that email, click the link, it'll download the guide for you and you will have access to my free PDF guide on buying assets with partners and my people. You can do that with laundromats, but you wanna learn how to buy the laundromat first. So, without further ado, let's jump into the pod. Jordan Berry welcome to the Financial Freedom Fest podcast. My man, my dude, my brother, my recently traveled guy that I was on your podcast, dude man bro, what's going on?
Speaker 1:Man, what is going on over there? There's a lot of Dude Man's and Bro's and I loved it Every second of it. But, dude, hey, thank you for having me on the show. This is, man, such an honor and I have seen some of the people you've had on here and I have no business being on this podcast. I'll just say that, right, oh man they humble me.
Speaker 3:Yeah, and the funny thing about your response to my Dude man thing is when you were responding to me and I'm pretty sure it was just in your actual lingo that you said Dude and you said man, and that's just how we rock and roll when we talk with pros. So I love it, man, For our listeners, if you don't know Jordan, he is a I would say the main, or one of the main, at least thought leaders in the laundromat space. He's the host of the laundromat resource. You have a community. You're a real estate investor. You used to be like a pastor and worked in ministry, which is crazy. So definitely want to talk about the beginning of your story, but for the listeners that don't have a good grasp of who you are and what you do current day who are you and what do you do?
Speaker 1:Yeah, awesome. Current day, as in today, I am a dad of a seventh grader first day of school and a fourth grader first day of school, which is exciting. And just when you have a junior high it just makes you feel old and married. And I got laundromats run. Laundromat resource host, the laundromat resource podcast probably the pinnacle of all podcasts, I would say I think so.
Speaker 3:Besides the financial freedom fast podcast.
Speaker 1:It's like a close one too. I think Joe Rogan comes in third, right, yeah, just in third. Yeah. And real estate investor yeah, man, I own an Italian Greyhound and a giant tortoise. I have a giant tortoise. He's over a hundred pounds. Where do you keep?
Speaker 3:it. You live in your backyard. Yeah, wow, do you have a house for it?
Speaker 1:Yeah, he's got like a house and it's all heated and not that we need it a lot here in California, but yeah, giant tortoise.
Speaker 3:Is that? Do you need a giant backyard for a giant tortoise?
Speaker 1:You need some space. Yeah, they're roamers and they're so strong and he is pushed over fences and yeah, but he's cool what's his name. His name is Eleazar, or Zar for short.
Speaker 3:Zar, the king of it all man. That is so cool, and I haven't had anybody on this podcast to talk about laundromats. So today is going to be a pretty awesome and exploratory podcast, so really excited to dive into it. Let's just talk a little bit about the origin story though. So, like you were this minister, ministry worker, pastor, somewhere along those lines how did that lead you to laundromats?
Speaker 1:Yeah. So when I was a kid, I grew up always wanting to own. No, I'm just kidding, nobody grows up wanting to own laundromats.
Speaker 3:I want to be the laundromat king, yeah.
Speaker 1:No, yeah, so I was a pastor for you pastor and a pastor for 14 years, I think, and a four mentioned kids had them and they were really young. You know, ministry is just very time consuming, energy consuming, and it was just time to take a break from working at churches and stuff and was trying to figure out what to do. And so I was like, hey, we live here in Southern California, we own our house, let's rent that house out, let's take the money we got in the bank and go buy a condo in Hawaii and live on the beach and do whatever, I don't know sell jewelry or whatever on the beach, I don't know. And you know, when our kids are school aged, if we want to, we can come back to California and that gang condo in Hawaii. And my wife was like we can do that or we can buy a laundromat. And so we bought a laundromat and not a condo in Hawaii, and that is how I got into laundromats.
Speaker 3:That's how you got to do it. I feel like I should have your wife on this podcast. Yeah, they get very different podcasts. Yeah, like you, jordan, you're like easy decision. Hawaii, sell a jewelry on the beach, we get a condo, live in life. And your wife says laundromats. What was your initial thought when she said that, were you like what?
Speaker 1:Yeah, yeah, that's a thought everybody had and has. When I say laundromats and yeah, that was my thought too the concept behind it is it was genius and it was I don't know like. I give her a lot of this is very out of character thing for her to suggest for us. But it was genius and we knew nothing about any of this stuff. We didn't know anything about business or real estate investing. We knew nothing about any of that stuff. But the thought was hey, laundromats are a business that you can buy and we'll kick off a lot of money, cash flow, for you without a ton of your time. And that was the goal. It did not work out that way for us, but that was the goal and that's why, ultimately, we ended up buying a laundromat instead of a condo in Hawaii.
Speaker 3:And you bought this first condo or you bought this first laundromat and everything worked out perfectly. There were no issues. You did everything perfect and made a ton of cash flow. You tired off and won laundromat and you're like that's it, that's all you've ever done Just like I dreamed about when I was a kid.
Speaker 1:Yeah, no, it was horrible. Yeah, it went terribly and we lost a lot of money. I've lost six figures of money in this industry but when we got in, like I said, we knew nothing. There really wasn't very much information out there to even go. Fine, I did a ton of research and by a ton, I like read everything there was available and talked to anybody who would talk to me, which was not very many people, and but ultimately we relied very heavily on the broker to help us and it turned out just the broker was not a good dude and he was not trying to help us really, he was trying to help himself, yeah, so we ended up buying this laundromat and losing a bunch of money and learning a lot of very expensive mistakes.
Speaker 3:What were those very expensive mistakes and lessons? Let's just, we're going to dive into the heat. Yeah right off.
Speaker 1:Yeah. So how we bought the, how we bought the laundromat was we paid all cash for it and then we financed new equipment. One of the good things about laundromats you can get a hundred percent financing on equipment, which is pretty awesome. But we bought all cash, we financed new equipment and then I did a bunch of renovations. Just personally, I spent a lot of late nights like working on that laundromat over there, dreaming about being on the beach in Hawaii. That will tell you that for sure.
Speaker 1:But when we bought that laundromat number one, the broker told us you know what? You don't really need to do any new diligence, this laundromat's not making money, it's breaking even and you're going to put new equipment in anyways and you don't really need to worry about it. Turns out it wasn't breaking even and because we didn't really do too much new diligence, we were in the whole day one and so when we went to go buy new equipment, we're like, okay, this is going to fix everything. And actually when we put new equipment in, business did double for us pretty quickly, but we were still in the hole a couple grand a month at that point, and not even.
Speaker 1:Not just that, it wasn't just that, it was also that the specific laundromat that we bought and I want to preface this by saying this is not a typical thing, anybody out there who's interested in laundromats and stuff I don't want to scare anybody, but my experience was not good, both financially, but also the previous owner had not really didn't really go there very much anymore, and so what happened was a local gang moved into the laundromat and took it over, and so not only was I losing money and trying to renovate a laundromat and trying to learn business and all that stuff, but I was literally fighting a gang to try to reclaim the laundromat. So it was tough. I got into physical altercations. I put some people in the hospital and was like man, what am I doing? Like I got these two young kids trying to make money. I'm losing money. Getting into fights Like this is. It was bad man. It did not go like I dreamed about when I was a kid.
Speaker 3:That's what it's a laundromat will bring you an exciting and exciting life. But no, I actually liked this store because my the first investment property that I got was this four plex. It was a house hack and it had the same exact type of issues I had. It didn't make money for a year and a half. I had all the issues. I had to make all the repairs. It was literally like the town. It was condemned, people couldn't move in here. I had people break into the house. I had contractors that were getting deported. I had contractors that had to fight people here because they broke in, and then the person who broke in the house and fought my contractors sued my contractors.
Speaker 3:Man, it was just this big slew of all of these problems that I got hit with one. But then it comes a decision on a point where, all right, I just learned all of this stuff, like I had all these terrible things I went through, which are lessons and are great things that can happen because they teach you something. And then from there it's your decision of I'm done with that, I quit, or I can take all these lessons that I learned, make myself stronger, and then continue to do what I'm doing and I assume and I know from your story, that is what you continue to do. So what was your mindset after you had all these problems and issues that you ran into? And then why did you even keep on going in the business?
Speaker 1:Yeah, no, I love what you just said and I think one big takeaway from both of our stories is you can't lose if you don't quit, just keep going. I hit that same exact point where I was like, okay, I can just cut my losses, cut bait and run and go do something else, but then I'm starting the lesson learning all over. And so it was like, okay, I'm learning here, to be honest with you, look, I'm just going to shoot straight with you. It was like a roller coaster, emotionally, right.
Speaker 1:My mindset was all over the map and I literally would brainwash myself.
Speaker 1:Right, like I would just the only thing going into my head externally, aside from my own voice, was like podcasts and audio books that were like positive, that were teaching me something new that might help me figure out how to get out of the situation, like all of this stuff real estate, investing, business ownership, marketing like I was just, I literally was just brainwashing myself because it can be so tough, especially when you're going through the hard times, right, like to stay positive, to keep going.
Speaker 1:It's easier just to roll over and die sometimes, right, and man, honestly, the I had some pretty low lows during that time. I like desperation, despair, like all of all the things, man, but, like you said, I paid all this money blood, sweat and tears, literally to learn these lessons. How can I make the most of that now and how can I use that to propel me forward, going forward? And that that's ultimately where I ended up. And why I kept going is mostly, I think, because I'm stubborn and everybody told me to quit or sell it or get out or whatever. And, to be honest with you, maybe I should have, but I didn't, and you're am still alive.
Speaker 3:Things have worked out pretty well for you. So what was the timeline, like what year was it when you first went into this thing? And then what was the outcome with this laundromat? Do you still own it? Did you sell it? Tell us, like, what the overview of that looks like.
Speaker 1:Yeah. So I bought it, I think in 2014. And it was cash flow negative for a couple of years at least. We were losing money and then it was only break even for a while after that. Just recently sold it, actually, to a buddy of mine. And the reason I sold is because you get to a point in your investing journey, your business ownership journey, where you've learned what you've needed to learn, you've taken what you needed to take and you're ready to do bigger stuff, right. And so this was a relatively smaller laundromat is like 1500 square feet and I was really only ever going to net, despite what the broker told me. It was really only going to net like three to $5,000 a month, which, again, is not bad, but just ready to do some bigger deals and ready to spend my time. Even though it's not a ton of time, the time I do spend, I'd rather spend it on some bigger stuff. So that was so sold that I think early this year or late last year, Understood.
Speaker 3:So you bought your first facility in 2014, when how soon after that, did you buy your second?
Speaker 1:Yeah. So I think it was right around I think it was under a year when I bought the second one. So I had a broker bring me an off market deal and it was a seller finance deal for the real estate and the laundromat and I my mindset on that was like, okay, I'm still losing money over here, but this looks like a pretty good deal here and it looks like I'm going to cash flow pretty good and I've already learned all these lessons. Right, I was like, okay, let's apply them and let's let this one make up for the other one until I can get it going. And while I learned many lessons during the first one, I did not learn all of the lessons in the first one. So I had more learning to do on that second one. But bought it about a year a little less than a year, I think after about the first one, and that one did not start off well either.
Speaker 3:It's amazing. It's almost like you have to learn what these different little intricacies are so you can be successful in each of these. And I actually love that you were losing money on one of not not that, I love that you were losing and they appreciate you. I think you Losing money and then you were like, yeah, but I still believe in this business model and I'm going to still go and buy another one because this looks like it makes sense and maybe it'll do well. So I'm gonna take a risk, I'm gonna take a chance and I'm gonna do that.
Speaker 3:I believed in real estate. I believed in investing this project. This four unit took me a year and a half. Before that year and a half timeline where I actually had this thing rented out and making money, I bought another Property around two months before I was at, I actually got my first tenant in this building. So it's like I believed in the strategy. I knew it was going to work. It's just when was it going to work and how was it going to work? And I was determined to make it work. So when did this strategy, this laundromat strategy, actually start winning for him? Because it's Sounds like the first two were it does, at least in the beginning of it. So when did this start working and when did you start getting some confidence and momentum in the industry?
Speaker 1:Yeah, so well, real quick. What happened on that second one was escrow ended up taking like five, six months. There was like a divorce and so there were some title stuff that needed to get situated on the property and well, what happened was during that escrow, pretty so I did all my due diligence, all applied, all my lessons, you know right when I was gonna buy it. But then it stretched out another four or five months after all of that and I didn't redo the due diligence and what happened was there was a Another laundromat that got built like about a half mile away. It was bigger, it's nicer, brand new everything and it opened basically day one when I took over. Was it stay one when it opened? So Took an immediate 40% hit to the revenue, which was with no, no warning. Again, lesson learned I should have had at least had some warning, if nothing else, and so, yeah, so I had to claw my way back out of that.
Speaker 1:Now a lot of that business did come back. They ran promotions and it's a lot of people went over there, but then when the promotions died, mine was just more convenient or whatever for them. Yeah, it was. That was probably another six, six or Eight months of that was now. Both of them were losing money for half a year, which is how's the floating this just as a side question.
Speaker 3:Do you had a job at this point? Your wife had a job and you were just Fearlessly putting your heart out into the workforce so you could support your kids and your two money draining laundromats.
Speaker 1:Yes, I was supporting two whole communities. Yeah, yeah, so, yeah. So my wife and I both were working, and also I Will call it creative financing, where I just had to let some bills be late sometimes and yeah, you gotta make decisions. What you got, yeah, I'm like, okay, this one, I know if I'm late, they're really not gonna charge me any late fee for a month, so I'm gonna put it off for two weeks or what.
Speaker 1:It was rough man, it was a lot of juggling, it was super stressful and I it's the whole reason. My experience here is the whole reason why I started laundromat resource Right, like that is because I was like, look, nobody should have to learn the lessons that I learned the way that I learned them. I will just tell people. I don't want anybody to go through that again. And a big part of my problem was I tried to talk to other owners to figure out what I was doing wrong and nobody would talk to me. There's this whole. Our industry is Is growing. I will say that in terms of, like, our Openness openness, but it's a very scarcity mindset industry right, and in fact I was kicked out of a lot of the like, the association and all that stuff when I started posting log posts and YouTube videos and podcast episodes sharing my experience, and I was and I'm still not back in there at such a boomer mentality.
Speaker 3:Man, yeah, gate, keep everything.
Speaker 1:Yeah, and that was just yeah. It was rough, but I was like, look, dude, this, I want people to succeed. I want to help people Because I do think and the cash flow of laundromats and the freedom that they can give you speaking of financial freedom, right, like the freedom laundromats can give people is Is incredible. If you do it right, you don't even need a home run, you need a base hit. Get a base hit and your life can change in one to two laundromats and your life has changed completely. And so my whole goal is let me just help some other people get in this business the right way, so they don't have to go through years of what I had to go through and can just shortcut that path right. Learn the lessons, but don't learn them how I learned them. Just learn them me and other people in the industry who've already learned them for you. Yeah, that's possible.
Speaker 3:So what is your laundromat portfolio? Look like today.
Speaker 1:So right now I'm down to one laundromat, so I sold the one and I'm down to one in the and that the property of it. But I've started an investment fund and with a couple guys and so that's probably the way that I'll expand my portfolio going forward is through the investment fund, just so we could do more deals and bigger deals and, like I said, that scale at that scale phase where I'd rather do more and bigger with other people then less on my own.
Speaker 3:So have you? You have those two facilities that you purchased were there more that you bought and sold off? Or those two kind of your main Drivers that you've had.
Speaker 1:I had one other one, but for just a very short. I turned out to be like a flip essentially where I had some, had a deal, got a good deal. I what? One of the cool things that I found is, once you're in the industry, a Lot of doors open up to you. Right once you get your first one, a lot of financing options open up, a lot of deals come your way because people know you know that you're in the laundromat Industry and brokers know that you own one, so they'll bring you deals and stuff. So I got a deal brought to me and I ran it for three months and Sold it after that.
Speaker 3:So yeah, dude, that's what's happening to me now in the real estate industries. I'm just having random deals brought to me from all different aspects, all different sides, and it's up to me to decide what I want to do with those. Do I want to leverage a wholesale Contact that I have to be able to push this, make some quick cash? Do I want to buy it and sell it and hold tail it on the market right away? Do I want to actually buy it and keep it? A lot of things aren't making a ton of sense for me to buy and keep, with the Cash on cash return that I would have to put down and with that cash on cash return statement being set. Why Laundromats? Why are laundromats the thing that you said? This actually makes sense. Why, like? Why go after laundromats as an investment?
Speaker 1:Yeah, okay, I don't know. I don't know if you're gonna love hearing this, just knowing your background, but my real estate background, one thing that listen for me like. I think I'm a real estate investor, I love real estate and I think probably real estate is probably actually my first love. If I had to choose, however, the Average real estate deal can't touch the average laundromat deal when it comes to cash flow. So if your goal is financial freedom ASAP, it's to leave your W2 job.
Speaker 1:Buying a business like a laundromat is Probably gonna get you there faster Because the returns can be so great.
Speaker 1:And so to give you some numbers to to frame it out for you is, if you are Getting just a base hit average laundromat deal, you're looking at a 20 to 25 percent return on your investment, unleveraged, that's if you buy cash and then when you Use a loan or apply leverage appropriately, that number can go up and that's just a base hit deal.
Speaker 1:So if you get one, two, three of these, most people are gonna be financially free with one to three laundromats and can just happen real fast. And so what I Love and what I recommend to my audience your audience can do what they want, but what I recommend to my audience is if your goals to get leave your W2, get financially free fast, buy something like a laundromat, get that cash flow going and then invest in real estate and get the wealth Building cycle going in, because that cash flow is just gonna feed the machine and give you that freedom to be able to Do the things that you want to do, whether that's grow a huge real estate portfolio or sit on the beach or whatever you want to do. But cash flow is the big perk, I think, of laundromats and that relatively small time commitment compared to most other businesses.
Speaker 3:Yeah, I want to touch on that, the time commitment that is actually needed, how, what that looks like. But before we do that, I do want to touch on what you say there. I think cash flow for our beginning investors like just starting out, cash flow is the main thing at least that I focused on, because cash flow is what can get you your financial freedom. Cash flow is the passive income that needs to be greater than the expenses and then once you get there where your passive income is greater than your expenses, you're good. You've got the time.
Speaker 3:You bought your time back and now with that time, you can put your energy and focus into different areas, whether it means going to Bali and doing a yoga teacher certification, or sitting on the beach with your dog, or going and surfing and doing that whole thing, or if it's I want to create a business actually that I've had all of my entire life I've thought about doing, but I just haven't had time. Passive income buys you your time and then from there, you can decide how to design your future, and I love laundromats for their cash on cash return that you could get that cash flow that you could pull in from these things. So let's talk about that time commitment. What does it typically look like? How are you managing and operating these facilities once you acquire them?
Speaker 1:Yeah, the answer to your question is it depends in terms of what the time commitment is, but here's what it depends on. It depends on your business model. There are laundromats that are unattended no employees are during the day and maybe somebody just comes for an hour or two and cleans it once a day. Then there are fully attended laundromats where somebody is there all the time keeping things clean, helping out customers, maybe doing a drop off laundry, and they're actually processing laundry for customers. And then there's the full service like pick up and delivery, where you go to people's houses or small businesses or whatever and pick up their laundry, bring it back, do it then deliver it back to them clean and folded. So it depends on your business model and then how you decide to run that business model.
Speaker 1:There's a lot of laundromat owners, even still, that just go and sit in their laundromat all day because that's what they like to do. They like to just sit there and be there and talk to customers and the community and all that stuff. That's not my suggestion and it's not my business model, but some people do that. But to give you a little bit of an example, if you're going to run a laundromat that's either unattended or maybe even it's fully attended with some drop off laundry. You're probably looking at somewhere around five, maybe 10 hours a week. I think 10 is probably a stretch and usually you're spending a little more time early on when you first buy it to learn the business, train the employees, get it running the way you want it to be running, all that stuff. But after that maybe five hours I spend more time on the freeway here in LA getting to and from the laundromats than I do at the laundromats usually. But if you're running to pick up a delivery it can be more and it depends again on how involved you're going to be with that. But I've got buddies who run multiple laundromats and big pickup and deliveries that were probably less than five hours.
Speaker 1:That I work right Because they have management in place or they're leveraging technology, usually both leveraging technology and some sort of management structure. So in terms of managing operations, the laundromat that I sold was an unattended laundromat and it was still a coin laundromat. Most laundromats are still coin laundromats but there's more and more digital payment options here which actually make management super easy. When you have the digital payment options, In terms of management it's mostly just making sure you have the right people in there helping you out with the right stuff. Right, Having the right people in there cleaning and making sure they're friendly and doing a good job, keeping the place spick and span and just taking care of your employees and managing, making sure things are working and not breaking down and all that stuff.
Speaker 3:Having, like any business, you've got to build the systems out so the business could operate as efficiently as it can without you being there. Maybe you don't even have to do the five to 10 hours. It could be two to three to four hours a week that you're working on that business, which will get you a high ROI on your time and will help you to value your time a little bit higher than you have been in the past. If somebody wanted like today I say Jordan, I want to buy my first laundromat when should they look? What should they look for? What are the calling signs to a good opportunity for a laundromat investment?
Speaker 1:Yeah, a couple of things At number one in terms of finding an actual deal in a laundromat for sale. A couple of things I suggest is number one go ahead and search laundromat for sale near me. Everybody's going to do that anyways. Usually that's not where the best deals are. Sometimes they are, and sometimes you can turn those into good deals but usually that's not where the best deals are. Similar real estate, right. But one thing that you can do is actually reach out to the agents or the brokers that are listing those, because sometimes they'll have pocket listings or they'll bring you deals before they end up online and that can be a really good source of deal flow. That's how I got my second deal with the real estate with the seller, financing. And then the other couple of things that I recommend you do is basically door knocking, where you go and visit laundromats and talk to owners and see if they're interested in selling, or like a direct mail campaign, where you write them a letter and just ask them if they're interested in selling.
Speaker 1:So in terms of what you're looking for, again it depends on sort of your situation. There's like fixer uppers and then there's turnkey, so depending on that, but generally speaking, if you're looking at a laundromat, what you're looking for is a location that has heavy renter demographics, that you're looking for a concentration of people who are below ad or below median income. That is typically the demographic Bigger households also, we all know kids are filthy, disgusting creatures, right. So if there's kids, there's going to be laundry. But to shortcut all that, if you look around and there's like a Walmart, a Dollar General or Dollar Tree or whatever your dollar store is at your area fast food, restaurants, check cashing place those are all sort of similar demographics that are being served, that are serving similar demographic as a laundromat. So that's the way to shortcut that.
Speaker 3:Wow, those are some pretty good, concrete things that you could look for to decide what a good area is to buy. So when I would recommend for like a lot of my listeners, since we're most of us probably aren't at the point where we're buying something that's turnkey, because typically when you buy something that's turnkey you're going to get a lower return. Unless you find a killer deal turnkey versus you having to put some work in some sweat equity in there, you're going to get a lower return on the turnkey property. Let's focus on these properties that we have to add some value to and do almost like the burr process on these laundromats. What are you looking for in those facilities?
Speaker 1:Yeah, so number one is location man, it's real estate location. That's maybe even more important, because you really can't move a laundromat right. So you want to be number one in a location that's high visibility. So even if it's a fixer upper, you can see it from a street. If it's on like a corner, if it's on a busy street again, if it's in like a shopping center with some of those other stores that I mentioned where people are coming through, anyways, you can get a good location. You can probably make it work. So that's one thing.
Speaker 1:The old mine would be something that's a little bit rundown, but the machines are still pretty good and can maybe spit, shine them up a little bit, but essentially they're good. Every now and then those real estate deals come by where you just really got to go down some new floor and paint and you're good to go right, you can flip it for 50 grand or more or whatever. I mean, that's ideal, right? A good location where you just need to spit, shine things up a little bit. Okay, Generally it usually these, what we call them zombie mats, right? These zombie mats are going to have some older equipment and stuff like that. So what you're looking for in that case is number one. You're trying to see if you got to replace everything or if you need to replace just some of the stuff, Because laundry equipment is not cheap. It's not cheap. You're spending probably multiple, six figures on laundry equipment and again, there's good financing options for that, which is good, but it's still not cheap and you still got to pay for those things.
Speaker 1:And trying to find locations where you can. You can come in and get some of the machines working, maybe replace some of the machines, clean everything up, but then one of the good things about this industry is that it's a very mom and pop industry, right? So you're looking for places that have maybe bad Google reviews, where you can come in and provide better service and solicit better reviews and really benefit that way. It doesn't have an online presence, no website or anything like that. You can come in and throw just a basic website there, show up on Google maps, those kinds of things. If there's, chances are very good that it doesn't have any marketing whatsoever. So, adding a small it doesn't have to be big, but a small marketing engine on top of it can be. Again, as long as you're in a good location, you got a pretty good shot of being able to make this someplace that people want to come and do their laundry. Once you've made it that, throw a little marketing engine on it and you'll see growth for sure.
Speaker 3:I love it. So those are some ways that you can actually add value to these properties. And one thing that I do want to touch on is the valuation of these facilities. So they're based off of because this is a business it's based off of a multiple of the net operating income that business brings in right.
Speaker 3:If you can for our listeners, if you can add value aka put up some grand new signage that attracts people in, you've got new marketing that's bringing more people in. More people equals more dollars that flow through the machines equals, most likely, more net operating income. And then more net operating income equals more value, aka the valuation on your building equity in that facility, in that business that you could sell off, you could leverage that equity, you could do whatever you want with that. So the equity, the multiple that these businesses are typically traded at, is that a three, four X multiple, five X multiple. What does it typically look like?
Speaker 1:Yeah, it has been historically been an average of three and a half to five times multiple. What I've seen over the last maybe 18 months or so is we've got a lot more demand for laundromats here. You've got people like Cody Sanchez, you've got people like Rand and Slickter from Investment Joy and some other people out there that are really blowing up laundromats. So there's more demand than ever on laundromats and the supply is real low. So what I'm seeing lately is a shift maybe more towards a four to five and a half times the net income, depending on where you are and the condition of it, that kind of stuff.
Speaker 3:And that'll typically lead for our audience. That almost tells you what type of return you're looking at with your business. So if it's a four X, you're looking at right around that 25% ROI cash on cash that we were talking about earlier and outside of. If you go five X, you're looking at 20%. You could be looking at less if it's more than a five X multiple on the net operating income. And, guys, again, net operating income is where you take your gross income. You take out all your expenses, things like that, except for the debt that you have on that facility. You take out all of your operating expenses. That's why it's called net operating income and then you can look at that income, multiply it by four, five, five and a half, whatever the multiple is in that area, and that'll value out the business.
Speaker 3:For what you've got, jordan, I love it. I think we've delivered some very valuable tips and tricks for our listeners today. To be able to get into their first laundromat, which we've already established, is an incredible way to get yourself towards financial freedom fast, which is what this podcast is all about. Man, I'm going to dive into our final questions that we've got here for you today. What is one actionable step our listeners should take today to start on their path towards financial freedom.
Speaker 1:Listen, take a step first of all. Take a step. I say this a lot on my podcast, but all of this maybe you're listening to this and you're excited about laundromats or real estate or whatever all of this means nothing unless you take action on it. I would say, if your goal is financial freedom which it is probably because you're on this podcast and you're listening to this right now if your goal is financial freedom, probably the first thing I would do is get in contact with somebody who wants to go, who is already where you want to be.
Speaker 1:You hear that a lot, but if I had somebody just somebody who knew the business to help me, it literally would have saved me six figures plus of money that I lost getting in the business the way that I did. If I were to just found somebody who already knew, who could have just sat down with me for if I could sit down with me now from back, then it would take me about 15 minutes to say, hey, let's go find another deal, this one's not the one for you, right? It would not have taken very much time at all. Figure out what direction you want to go and then start networking, start reaching out to people, guests on the podcast here. I'm sure most of them will be willing to talk with you and start connecting with people who are already at where you want to be, because it will help you shortcut your timeline and it'll help you avoid mistakes that could end up very costly, which happens a lot.
Speaker 3:What you said about being you being able to sit down and see the problems that could possibly occur with each facility. Do you do something like that today? Do you have a? I know you have the Lundermat resource, which is helping coach other individuals on doing this. What is a coaching program or a mastermind that you have that you lead that could help somebody if they're looking to get into Lundermats?
Speaker 1:Yeah. So a couple of options for you. Number one I do one-on-one consulting. We have a consulting team, a small consulting team that does consulting, that everybody's very knowledgeable about the business, so if you're looking at getting in lot of them at resourcecomcoaching, you can check that out. And then the other option is as part of our pro community that we have at Lundermat resource, we actually have mastermind groups. So everybody who joins that pro community has the option to join a mastermind group, to be in a group with other people who have similar goals, similar mindsets and can help keep each other accountable, can encourage each other, can help problem solve together. All of those things happen to those mastermind groups, which are pretty cool. It's the only place in the industry that I know of where you can get into a mastermind group, which is pretty awesome, I think.
Speaker 3:Lundermat mastermind. Yeah, masterminds are so powerful for taking you to your goals because you're surrounding yourself with the people and, like you guys have heard a thousand different times and maybe you haven't implemented it into your life the people that you spend the most time around those five people, three people, four people, two people, one people, six people, those people that you spend the most time around are going to be the people that you become. So if you spend your time around with people that are looking for Lundermats own Lundermats are getting crazy cash flow from Lundermats you are working your way and ultimately progressing towards that goal of buying a Lundermat, if that is one of your goals, so I suggest that mastermind program if that is something that you guys are looking to do. Last question that I've got for you today, my man Jordan, is what is one question that you wish I would have asked or one topic that you wish I would have covered, and how would you have answered that question or how would you have expanded on that topic?
Speaker 1:Yeah. So Good question. I think we could have gone into a little more. For people who are looking for financial freedom, right, I think that there's what I call the wealth tripod, okay, and the wealth tripod is the three main things that you need to help you build wealth right. So that's cash flow, that's equity and that's tax advantages. Those are the three main areas, and what I love about Laudermats, and specifically what I love about Laudermats and real estate investing when you do it together, is that you hit all three of those pretty hard right. And so Laudermats I see mostly as like a cash flow play, and there's pretty good tax advantages too Not quite as good as real estate, but pretty good still.
Speaker 1:You get your kind of normal business tax advantages where you can run expenses through your business pre-tax, and then there's also depreciation on machines and stuff like that. Basically, you can do a cost segregation, essentially on your Laudermat too, where you can depreciate your machines and run those as an expense through your taxes. So you got those things going and you can build equity, although it doesn't build as quickly as it does in as it potentially can in real estate, because that multiple is lower than a typical real estate multiple, even though it's not really how we think about it. But with real estate you can get cash flow. It's not going to be as good as Laudermat, but you can get cash flow, great tax advantages, slightly better than Laudermats, and you have that potential equity growth.
Speaker 1:So between the two of them, I think it's a way to supercharge your wealth right, I think. If you're looking for financial freedom fast, I love the idea of going a business like a Laudermat first and then funneling money from there into real estate, because I think that combo is a wealth accelerator. I think it's something to consider if that's your goal. It doesn't have to be Laudermats. There's tons of businesses and cash flowing machines out there basically that can help you do it. But chasing that cash flow first and then funneling it into real estate, and you hit all three of the legs of the wealth tripod pretty hard, I agree.
Speaker 3:So, strong man. Cash flow is key right in the beginning and then from there, let's build off of that. I loved real estate in the beginning because I found some stuff that just cash flowed a stupid amount and I was like I am going to go get this stuff, but nowadays it's getting a little bit harder. Looking into something alternative, like one of these businesses, might be the next best step. And remember to go take that step, guys, and go do this stuff. Jordan, for our listeners and watchers that want to find you online, where is the best place for them to reach out to you?
Speaker 1:Yeah. So LaudermatResourcecom you can check that out. There. The podcast is Laudermat Resource Podcast. It's on all the platforms and if you're somebody who is serious about getting into the Laudermat industry and you really want to understand the ins and outs of how to value a Laudermat and how to do the Duke diligence which is tricky because they're cash businesses right, that can be a tricky one to verify all the numbers the seller is giving you to really be able to pinpoint the value I put together. Of course you can go check it out at LaudermatResourcecom.
Speaker 3:Slash financialfreedombast All one word, wow, just especially for you guys, just for this podcast Right here. Yeah, I absolutely love that, jordan. Thank you for doing that. Thank you for doing that from the people and for the people in delivering such amazing value today on this podcast. Really appreciate you, my good friend. And from the Financial Freedom Fast podcast, I'm your host, matt Amobile, and today we add on Jordan Berry. We dug into Laudermats and we are signing off. Thanks, jordan, thank you.
Speaker 2:Listen, let's retire together.