THE BUYER'S BRIEF - FULL DEAL BREAKDOWN
Laundromat / Coin Laundry | Southwest US | $898,900
A laundromat in the Southwest is asking $898,900 on $221,648 of cash flow. That's a 4.06 multiple on an industry where the average deal closes at 3.0x. You are being asked to pay a $234,000 premium over the comp. For that premium, you get a one-page listing that doesn't disclose the single number that matters most in a laundromat. And a seller who won't carry a dollar of paper.
THE DEAL SNAPSHOT
Industry | Laundromat / Coin Laundry |
Location | Southwest US |
Asking Price | $898,900 |
Annual Revenue | $494,777 |
Cash Flow (SDE) | $221,648 |
Profit Margin | 45% (industry avg: 41%) |
Years Established | Approximately 15 years |
Staff | Under 5 employees |
Operator Model | Semi-absentee (self-service + wash/dry/fold) |
Seller Financing | Not offered - third party only |
BULLETPROOF SCORE CARD
CRITERION | TARGET | ACTUAL | VERDICT |
Stress DSCR (20% rev decline) | ≥ 2.0x | 1.47x | FAIL |
Purchase Multiple | ≤ 3.0x | 4.06x | FAIL |
Owner Cash Flow | > $100K/yr | $76K/yr | FAIL |
Working Capital (3+ mo) | $124K+ | Not disclosed | INCOMPLETE |
Clean 80/10/10 Structure | 80/10/10 | No seller note offered | FAIL |
THE 80/10/10 SUMMARY
The standard structure requires a seller note. This seller isn't offering one, which means a true 80/10/10 isn't available on this deal. Running the numbers as if the buyer could force a seller note into the term sheet - $719K SBA at 10.5 over 10 years, 10% seller note at 5 interest-only, 10% buyer down - the math still falls short of the Bulletproof floor.
Run your own numbers at DealScore Pro - you can plug this listing in and get the same scoring in 60 seconds.
Cash In (10% down + working capital + closing) | Approximately $236,000 |
Annual Cash Flow After Debt (with $25K attendant allowance) | $75,692 |
Payback Period on Down Payment | 14.3 months |
Stress DSCR at 20% revenue decline | 1.47x (below 2.0x Bulletproof floor) |
WHAT'S WORKING
Laundromats are real businesses with real moats. The SBA default rate for this category sits at 4.1 percent against an all-industry average of 16.8 percent. Demand is recurring and essentially recession-proof. Customers don't stop needing clean clothes during a downturn. The 45 percent margin on this listing is above the 41 percent industry average, which suggests the operator has run it efficiently. And 15 years in operation at the same location is real tenure that builds a real customer base. If this were priced at 3.0x SDE, it would be a defensible deal to walk through diligence on.
WATCH OUT FOR
The utility cost disclosure isn't here. In a laundromat, water, sewer, gas, and electric are not a line item. They are the business. A 45 percent margin could reflect genuinely efficient equipment and a favorable water rate. Or it could reflect the current owner benefiting from a legacy utility agreement that won't transfer, or water rates that are about to go up, or equipment at the end of its useful life that the new owner will replace within 24 months. You cannot evaluate a laundromat without trailing 12 months of utility bills broken out line by line. The listing doesn't even gesture at these numbers. That's not an oversight. That's a choice.
The seller won't carry paper. The listing says "third party financing available for qualified buyers," which is broker language for "the seller is walking with a check." On a deal priced 35 percent above the industry average multiple, a seller who refuses to carry even 10 percent on a two-year standby note is telling you exactly how confident they are that the next 24 months will look like the last 24. Read the signal. Don't argue with it.
The equipment age question is unanswered. Commercial laundry equipment has a 15 to 20 year useful life. The business was established in 2012, which means the original equipment is now 13 years old and getting close to replacement cycle. A full commercial laundry refit on a facility this size runs $150K to $300K. That expense doesn't show up in the SDE calculation because the current owner hasn't done it. It will show up on your balance sheet in the first three years. Price that in, or walk.
The lease is not disclosed. A laundromat without real estate is worth whatever the lease allows it to be worth. If the lease has 24 months left and the landlord wants a 40 percent rent increase at renewal, the business you bought at $898K is suddenly worth $400K. No lease term, no rent escalation clause, no landlord history - you cannot price this deal without those details, and the listing offers none of them.
THE ANALYSIS
Here's what 35 years has proven. The asking price on a listing is an opening bid from the seller and the broker. The industry comp is the ground truth. When you see a laundromat priced 35 percent above the industry average with no disclosed utility costs, no lease detail, no equipment age, and no seller financing, you are looking at a seller who is betting the buyer won't do the math. Many don't. The ones who do, walk.
The post-debt cash flow is the number that tells the real story. After SBA debt service and a modest $25K allowance for a part-time attendant - which any semi-absentee laundromat needs - the buyer clears $76K per year. On a down payment of $90K plus $124K of working capital plus closing, you are tying up $236K to earn $76K. That's a 32 percent annual return on cash, which sounds great until you remember you are also personally guaranteeing an $800K SBA loan on a business with a 1.47 stress DSCR and no seller accountability after closing.
The fix for a deal like this is simple, and the laundromat industry makes it easy to benchmark. At 3.0x SDE - the actual industry average - this listing would price at $665K. At that price, the SBA loan drops to $532K, debt service falls by roughly $32K per year, post-debt cash flow climbs to $108K, and stress DSCR moves to 2.0x. Same business. Same machines. Same customers. A price that matches the comp instead of 35 percent above it. Plug $665K into DealScore Pro and watch the scorecard move from 1 of 5 to 4 of 5. That's the offer. Not the ask.
MIKE'S VERDICT
PASS
Score of 1 out of 5 at the asking price, with three hard fails and one Incomplete on the core criteria. The category is good. The margin is above average. The tenure is real. The price is not. At $898,900 this deal is 35 percent above the industry comp for a business that's withholding the three disclosures that actually determine value: utility costs, lease terms, and equipment age. The refusal to carry a seller note is the tell. Come back at 3.0x with a 10 percent note, 24 months of utility bills, and a lease that runs at least 10 years. If the seller says no to any of those asks, your offer price goes lower, not higher.
Want to see how I stress-test every deal against cost shocks, revenue dips, and hidden liabilities before I'd put a dollar at risk? I walk through the entire Bulletproof method in a free 28-minute masterclass.
Watch the Free 28-Minute Masterclass
WORK WITH MIKE
Want to learn how I evaluate every deal? Watch the free masterclass.
Want to score any deal in 60 seconds? Try DealScorePro - free.
Ready for expert guidance on your first acquisition? See if you qualify.