Side Hustle City

Striking Gold in Unlikely Places: The Laundromat Hustle With Jordan Berry

November 08, 2023 Adam Koehler & Jordan Berry Season 4 Episode 53
Striking Gold in Unlikely Places: The Laundromat Hustle With Jordan Berry
Side Hustle City
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Side Hustle City
Striking Gold in Unlikely Places: The Laundromat Hustle With Jordan Berry
Nov 08, 2023 Season 4 Episode 53
Adam Koehler & Jordan Berry

Wondering how to turn a side hustle into your main hustle? Tune in as we join forces with former pastor turned laundromat owner, Jordan Berry, to unearth the hidden potential in this everyday industry. From overcoming initial setbacks to mastering the game, Jordan's journey provides a wealth of lessons for those dreaming of a career pivot.

Stay with us as we delve deeper into the world of automated laundromats, where technology is reshaping the way we think about laundry. Imagine a mini laundry empire generating passive income of up to $80,000 a month, and it's all thanks to automation. Jordan's podcast, a treasure trove of industry insights and success stories, has been instrumental in inspiring listeners to jump on this lucrative bandwagon. We also discuss how the recognizable brand of a franchise can provide a head start, but the real treasure may lie in taking over an existing laundromat. We look at the target demographics, and the pros and cons of building anew versus buying an existing setup.

But the laundromat hustle doesn't stop at laundry. This episode uncovers opportunities to expand your income streams within the very same walls. From adding vending machines, coffee houses, and other services to starting a pickup and delivery laundry service, there are myriad ways to increase revenue and customer attraction. For those who dream of entrepreneurship but not quite ready to invest in a physical space; we discuss the viability of starting a pick-up and delivery laundry service without owning a laundromat. As we wrap up, we explore the Airbnb arbitrage model and the potential advantages of franchising. Ready to turn your side hustle into a mainstay? This episode could be your first step and the next would be reaching out to Jordan. Also check out his YouTube for more information.

As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. That's where our trusted partner, Reversed Out Creative comes in.

With a team of experienced professionals and a track record of helping clients achieve their dreams, they are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com. We also recently launched our YouTube Channel, Marketing Pro Trends,  which summarizes all of our blog posts.

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Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

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Show Notes Transcript

Wondering how to turn a side hustle into your main hustle? Tune in as we join forces with former pastor turned laundromat owner, Jordan Berry, to unearth the hidden potential in this everyday industry. From overcoming initial setbacks to mastering the game, Jordan's journey provides a wealth of lessons for those dreaming of a career pivot.

Stay with us as we delve deeper into the world of automated laundromats, where technology is reshaping the way we think about laundry. Imagine a mini laundry empire generating passive income of up to $80,000 a month, and it's all thanks to automation. Jordan's podcast, a treasure trove of industry insights and success stories, has been instrumental in inspiring listeners to jump on this lucrative bandwagon. We also discuss how the recognizable brand of a franchise can provide a head start, but the real treasure may lie in taking over an existing laundromat. We look at the target demographics, and the pros and cons of building anew versus buying an existing setup.

But the laundromat hustle doesn't stop at laundry. This episode uncovers opportunities to expand your income streams within the very same walls. From adding vending machines, coffee houses, and other services to starting a pickup and delivery laundry service, there are myriad ways to increase revenue and customer attraction. For those who dream of entrepreneurship but not quite ready to invest in a physical space; we discuss the viability of starting a pick-up and delivery laundry service without owning a laundromat. As we wrap up, we explore the Airbnb arbitrage model and the potential advantages of franchising. Ready to turn your side hustle into a mainstay? This episode could be your first step and the next would be reaching out to Jordan. Also check out his YouTube for more information.

As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. That's where our trusted partner, Reversed Out Creative comes in.

With a team of experienced professionals and a track record of helping clients achieve their dreams, they are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com. We also recently launched our YouTube Channel, Marketing Pro Trends,  which summarizes all of our blog posts.

Buzzsprout - Let's get your podcast launched!
Start for FREE

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

Support the Show.

Subscribe to Side Hustle City and join our Community on Facebook

Speaker 2:

Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started, all right. Welcome back, everybody, to the Side Hustle City podcast. Today we've got a special guest coming all the way from California Jordan Berry. What's up, jordan?

Speaker 3:

Not much, adam, how you doing.

Speaker 2:

I'm doing all right. I'm doing all right, but guess what, guys? We finally got a Laundry Matt owner to come on to the podcast and talk about passive income by owning a Laundry Matt, and it sounds like you're killing it, man.

Speaker 3:

Hey, you know what? Listen, laundry Matt's are a great business, so I'm not going to take any credit for any of that. I just stumbled into a really great business.

Speaker 2:

That's right. Well, and you were a pastor before this, which is interesting you go from being a pastor to the Laundry Matt ownership business. How did a transition even happen?

Speaker 3:

I mean, I feel like it's pretty natural, right, like a pastor. No, you know, it's a little bit of a funny story actually. So I was getting ready to transition out of doing that uh, pastoring vocationally, and trying to figure out what to do next. You know, it turns out when you got a degree in ministry and all your 15 years of working experiences in ministry and you don't want to be in ministry as a job anymore, it's tough to figure out where to go from there. So we had a little bit of money in the bank, owned our house here in Southern California and I had a great idea, which was and we had two, two young kids. My wife and I had two young kids and I was like, well, why don't we take our money in the bank and go buy a condo on the beach in Hawaii? We can rent out our house here in Southern California, we can live there until our kids are school aged and then, if we want to, we can. We can come on back to California and rent out our condo in Hawaii, net gain condo in Hawaii. I thought it was a genius, genius plan. My wife said we could do that, or we can buy a Laundry Matt, and so we ended up buying a Laundry Matt, and it came about. I heard the idea, which is very counter my wife If you knew her, you would be very surprised she said this. But it came about because, if you can follow me here, my wife's parents friend's son had a tech job up in the San Francisco Bay Area and he ended up quitting that tech job after he bought a Laundry Matt and went from working 70, 80 hours a week in tech to five to maybe 10 hours a week and replaced his income with a Laundry Matt and he thought that's a great idea. Why don't we just do that? And so that's what we did. It did not turn out the same way for us, but that is. That's the idea behind it.

Speaker 2:

Yeah, it said you guys had originally lost around two grand a month. I mean, that would almost destroy some people the idea of losing two grand a month, but I'm sure you learned a lot from that experience.

Speaker 3:

Yeah, I got to. Yeah, it destroyed me also temporarily, just to be clear.

Speaker 2:

I don't know. You're in California 2000 a month. That's like chump change. That's like maybe what people spend on fast food.

Speaker 3:

There were months I found that on the sidewalk just walking around. Now it was rough. I mean, listen, all in total, I mean we probably lost over the few years time we probably a net loss of six figures and it was. It was rough. You know, when you come in and you were sold this story of hey, you come in, you collect quarters once a week and you're raking the dough, you know, and I was expecting to make $5,000 to $7,000 a month, essentially day one, and come in to find out that I was losing a couple grand a month. That's a punch to the gut, for sure, and very, you know, very, very difficult lessons to learn, very valuable now, lessons to have, and a lot of it is stuff that I look back and I'm like dude, why, why did you not know? Yes, like, like, we relied solely on the broker because we couldn't find it from there, wasn't information online anywhere. It's part of why I started Laundermat resource is because you can find information anywhere and I was like nobody should ever have to learn the lessons I learned the way that I learned them. I would just tell people the lessons I learned so that they don't have to go through what I went through and so it was. It was rough man it was, it was really tough. And yet here I am still talking about Laundermat, still trying to help people get into this industry, into this business, and the reason is because I believe in this business and I've seen what it can do, how it can change people's lives and and do it in pretty dramatic ways. So you know, despite the fact of not working out initially for me, I still think it's a great business if you get in it the right way, which is the key.

Speaker 2:

Well, and that's the problem, Like I think a lot of people are afraid because there's a you know you're taking on, maybe rent, unless the Laundermat your binos, the building or whatever where you still got to pay taxes on that building. There's still, you know, gas and electric, all these other fees. What was eating you up when you first started this thing, Like what was the big thing that was costing you money?

Speaker 3:

Yeah, so it was kind of all the above. So the lease was one thing, I mean the lease a lease is like a marriage contract right, but worse, that makes it sound like a marriage is bad. But you know, I mean you're locked into that lease and the lease was personally guaranteed and it was too high, the Laundermat couldn't support it and you know, etc. I didn't know anything about leases. I didn't know anything about business. I didn't know anything about investing real estate, nothing. I didn't know anything. I was very naive and, you know, over time became a hardened man. I'm a hardened man now.

Speaker 2:

That's what happened to me with rental property. I was a little too nice, and you know what does it say? The path to hell is paved with good intentions, right, good intentions, yeah, yeah. So the road to hell is paved with good intentions. I mean I found that to be very true. I mean, you give somebody an inch, they'll take a mile, and you can't be too nice. But also, yeah, you don't really want to go into things where you don't really understand the business. I mean, you will learn over time. I mean that is the thing you will definitely learn over time. But you know, every business has its own little nuances. I mean, if you're in, you know, a Laundermat business, I mean probably your biggest expense is related to the building itself and then the repair of the machines. I would assume.

Speaker 3:

Yeah, and labor, depending on how you run your Laundermat. Some people have people having a tenant there all the time. If you have a service side to your business, like a pickup and delivery or a drop off laundry service, then you've got somebody there processing laundry. So, yeah, your big expenses are, you know, usually rent, labor. Those two can be interchangeable, depending on how you run your business. And then utilities is probably your next big one, and then if you financed, you know, either the acquisition and or equipment purchases, that can be a big expense also.

Speaker 2:

Well, and there was a. I was looking at purchasing a franchise and they hadn't come to Cincinnati yet and they're still not in Cincinnati. But it's a an equipment manufacturer of of machines and they have these franchises. They're trying to do now and trying to convince people to open these up in their communities where these things don't exist. But the capital expenditures like it's a million and a half dollars just to enter the business and then you still have to go find a place to rent. So maybe outside, in the parking lot of a Walmart or something. There's an outbuilding or something that you can rent out, or maybe used to be a restaurant, you can convert it somehow. So then you've got those construction costs on top of that and it can get really, really expensive. You're going to have nice new equipment ever, all the technology is going to be there, but then you got to pay every month for their technology and the computers and you have to buy them off of them. So there was a lot of rules associated with that. But what's your experience with? You know, laundry mats that are already set up, that are ready to go? They might be a little dirty, the equipment's a little old. You know what would you tell people versus maybe setting up a brand new laundry mat and having all these other expenses associated with a franchise?

Speaker 3:

Yeah, well, real quick on the franchise note and then I'll go back to your other question. On the franchise note, specifically with the manufacturer that you're talking about, who's been trying to do that? The manufacturer and I maybe even unbeknownst to them, I don't know sort of have some beef because I don't like what they're doing to their own customers, their selling equipment and then down the street they're taking data that are learning from customers in the market and they're putting in their own franchises in the backyards of their own customers. I don't. I don't like what they're doing here. But besides that man, the power in a franchise to me in any business twofold. And I'm not super experienced with franchise so maybe I'm missing a big picture here. I'm willing to admit that. But the two big values to me in a franchise is number one the systems and processes that you inherit with that franchise, that are already proven and established, which you probably can get with the Lawnmere. But it's a pretty simple business. There's not that many systems and processes that you really need to grasp in order to be successful in this business. And then number two, the brand recognition. Right, you want a hamburger. You're going to go to McDonald's because you know what you're going to get. You don't get that at all with a Lawnmere. Nobody's going. Hey, I'm looking for you know X named Lawnmere to go to. They're going to. Hey, what's the closest Lawnmere that's clean and reasonably priced, right, like that's. That's what people are looking for Convenience, speed, cleanliness, those types of things, right? So in my opinion, in most franchise models not all of them, but in almost every franchise model in our industry I just don't see the value there. So, going back to your other question. I think you can get there just as easily and much more economically by buying an existing Lawnmere mat. Specifically, if it's your first one, buying an existing Lawnmere mat, maybe investing some capital into rehabbing the plays or retooling, putting new equipment in there and, you know, professionalizing operations. You know we're still a mom and pop industry by and large, and so there's a lot of room to professionalize customer service. There's nearly no marketing. There's more and more happening now all the time, but that's a low hanging fruit in our industry right now is to throw a you know, even a decent marketing engine on a Lawnmere mat and just taking care of the basics right Keep it clean, keep it safe, keep the machines running. You know get feedback from customers and and implement changes when they need to be changed. You know train your employees to smile and be friendly. You know, like basic, basic things that you can do so. But when it comes to build out like if you're trying to build out outside of a franchise and outside of an existing one can be super lucrative too. But you're looking at, you know good capital you know that you need, and also time. You know it takes 12 to 18 months probably to build out a lot of locations, and so you can cash flow day one. If you get the right Lawnmere mat that already exists or you know you can, you can build one. But you've got a 12 to 18 months until you can open the doors, and then you may have another six to 12 months before you become profitable. That's right, even on top of that.

Speaker 2:

So but you got to put it in. I mean, if you're it's, you know, nothing's easy. I think you've got a lot of people out there, especially like some of these online influencers, that make things just sound so easy, like it's just. You know, life should be easy. You shouldn't have to work this hard. You know, I I became a millionaire at 22 years old, selling you know whatever, you know digital products or something you know. There's those same folks that are just talking about this stuff. But I mean, these are the types of things that I mean. A laundry mat is essentially like an annuity for you. You just got this thing, you get it set up, you get it rolling and this thing will make you just income for, potentially, generations, especially if you're buying one that already. I think the benefit to buying one that already exists is people in that area already know it exists, they already know it's there. And then when you go in and you rehab it and you, hey, it's under new management. Oh, I should go back there or I should check that out. Now, one thing I've been kind of afraid of is everybody's got to wash or dry at their house for the most part, right, if you, if you're moving into one of these suburban communities or whatever. Who? Who? What's the profile of the person that goes to a laundry mat?

Speaker 3:

Yes, wrong. Not everybody does have a wash and dry at their house. Chances are pretty good If they, if they live in a house, they have a washer and dryer, they may or may not probably don't need to use a laundromat. So I mean, really, you're looking at a renter demographic for self-serve. Now, there's two or three different demographics you can hit depending on what you're offering them, right? So if we're talking self-serve, we're looking, we're looking for communities that have a higher renter demographic. We're looking at communities that are, you know, a majority of people are below median income, right At or below median income. That's typically who we're looking at, you know, for, for who's going to, you know, utilize a self-serve laundromat. And then you know, obviously a larger household Size on average is better for a long amount too, because that generally means that there's kids in the house and, as we all know, kids are filthy, discussing creatures that create a lot of mass in dirt. So a lot of laundry there, right? So that is. I've told that to my kids before and they get offended.

Speaker 2:

but Well, hey. I mean you stop doing it, if you're gonna get offended like quit acting like that. But what about apartment complexes too? I mean, a lot of times they have the shared laundry or people. Do you find that the customers that come to your laundry mats Are they just not wanting to use the facilities at their apartment complex, or are they just missing facilities altogether?

Speaker 3:

Both, both, and so a lot of apartment complexes, especially newer built ones, are having, you know, laundry facilities in there. But a lot of times, I'd say the majority of the time, you're pretty limited on the size of machine. Like, for example, you go to your laundromat and throw all your clothes into a 60 or 80 pounder and you know, these days with you know textile technology and detergent technology. You don't people still do but you really don't need to separate whites and colors and all that, like you used to, like grandma used to do it right.

Speaker 2:

I still do that shoot. I thought my grandma taught me.

Speaker 3:

Yeah, which is totally fine. You don't have to do that anymore. And so you know you can throw all the all your clothes, get all of them done, you know, basically within an hour, or you can stay at your laundry or at your apartment Complex, you can wait for the person who did their laundry and left their clothes in there, you can try to move them out and, you know, maybe have a confrontation with somebody who's mad. You took their laundry out of the washer when you needed to use it Whatever happens, all the time, yeah. And and do multiple loads and you can basically spend half your Saturday doing laundry at your apartment complex, right and so? Just the convenience, the speed. A Lot of times I'm just going to the laundromat, get it all done in an hour and be out of there.

Speaker 2:

Is Is where you know customers come from and blankets, I mean your comforters and things like that. I mean we're in the Midwest and you know it gets cold. I mean people are you know once, once it starts warming up, I mean, where's that comforter go? You're gonna stick it in something, but you're probably gonna want to wash it first before you store it away and then when you pick it back out, you know, three, four months later You're gonna want to maybe throw it in the wash again because it's been down the basement Container or something. So I mean being able to do that, those are you know You're only gonna need to go down to laundry maybe a couple times. But you know, based on what you're saying is, is there people out there that really need this? And based on my research, a lot of the Stuff I've looked at, if you can add the wash fold delivery service, that makes up, I mean, a huge amount. The laundry mats that actually do that. That becomes the majority of their revenue. It seems like.

Speaker 3:

It can for sure doesn't always, you know, it depends on how you're managing your business. But if you're managing things right, I mean it could be a huge, huge part. I mean I've had people on my podcast who have shut down their laundromat to the public because they're, you know, their pick up and delivery business has just grown so big they're just running 24 seven out of their laundromat. I have a good buddy and business partner of mine who he owns 13 laundromats and he actually moved his pick up and delivery service to a warehouse. That only does. It's close to the public and and rent is cheaper and all that right, and they don't have to have the coin machines, they can have machines with just the buttons on them and they have to deal with all that and you know they can. They can process all the pick up and delivery laundry at this one facility. So you can do and and I think Genuinely, I think we're just scratching the surface on the pickup and delivery I think I genuinely think it's gonna go the way of our, our front yards, right. I don't know about in Cincinnati, but here you know, you I grew up mowing my lawn and everything. Nobody mows their lawn here anymore. Everybody has a gardener because it just doesn't make sense anymore to mow your own lawn. Well, who likes doing laundry? It's probably America's Most hated chore that's left right. Yeah. And now you're telling me somebody can come to my door, pick it up dirty, deliver it the next day or two to my front door, clean and fold it. Foldings like the worst ever, right, that's right. Like clean and folded, ready to put away. Okay, like it's gonna be a no-brainer. And I think eventually we're gonna get to a point where the majority of people are doing that, having it done, having it done for you. I think you're right.

Speaker 2:

I think you're right. So the idea is is, if you're looking to invest in a laundromat, maybe even be prepared to change, because I think a lot of people think I'm just gonna invest in a laundromat, it's just gonna sit there and it's just gonna make me money. But you, what you're saying is is the industry is going to evolve and it is evolving, and I mean you guys probably see that kind Of stuff before we see it. So, and plus people, I mean you're, you're busy. I mean especially when you're in a busy town. You're in a busy city. You've got professionals. They don't have time for all this. They've got kids, they got to get the soccer practice, they've got all this stuff going on. You know, nobody even makes our own food anymore. They order the, you know whatever that Delivery services or Kroger has their delivery service. If you do make your food, I mean everything is, you know, automated. At this point, I mean people are automating their lives the way businesses have been automating their operations for years.

Speaker 3:

Yeah, yeah and I mean I think it's only gonna continue like all across the board, but especially in our industry. It's like I Kind of joke, like my, my neighbor and my tax guy. Neither one of them knew until just recently that that was even a possibility pick up and deliver right and this is like I'm like about as connected as it comes in this industry. I'm steeped in and even my neighbor and my tax guy didn't know that you could do pick up and deliver Right. It's we're just scratching the surface. I think a lot of people don't even know that service is even there and that they could offload that chore. And just as awareness grows, I just think that this side of the business is gonna boom. Now it becomes less of a side hustle. Getting back on topic, here comes a little bit less of a side hustle, at least initially, when you offer that service side. Right now you're you're in a logistics business. You got to figure out how to Create routes. I mean there's software that helps you but like create routes for your drivers and you're managing more people. But what's so cool about this industry and I see this happen all the time is that people come into it. You thinking, hey, I want a side hustle and I want to just make a little extra income. And they get in and they get hooked Because their business is doing well. And then they see opportunity and they end up inadvertently growing a mini laundromat empire, right, I had a consultant called this morning with somebody who did exactly that and now he's got five laundromats that are all grossing 60 to 80 grand a month. Whoa and yeah, and he's. He's replaced his, his Probably 1% or income with five laundromats.

Speaker 2:

Wow. So wait, he's a, so he can make you. I mean Now in California. This may be different to Cincinnati, but well, he's not in California. He's in Washington, but still West Coast still, I mean, yeah, I mean 50, well, 50 grand. I mean it's no different than since I probably in the West Coast or in that part of the West Coast, but you've got 50, 50, 50, 50. I mean the guy's making what? 25 grand or 20, 250 grand a month possibly in gross income Off a five laundromats.

Speaker 3:

Yeah, yeah, probably a little more than that, wow, wow. Well, even in in Cincinnati you've got a good buddy of mine, dave men's, who's called the laundromat millionaire that's his brand. He's in Cincinnati and he's got, I think, four Think he's got four Queen City laundries where he runs. Oh yeah there and he's, he's, he's killing it. He's got a huge pickup of delivery service and he just built a two million dollar laundromat that he runs pick up and delivery out of and he's killing it. And there's another one up in Columbus.

Speaker 2:

I can't remember the guy, but he he's a big influencer, big laundromat influencer. He also owns like rental properties and yeah.

Speaker 3:

It's brand inshlictor, yeah, joy. Yeah, that's my joy, that's it.

Speaker 2:

Yeah so my buddy me a barger. Yeah, he's a Nate barger down here in Cincinnati. He's been on the. They do multiple things like they are on each other's podcast, but he's big real estate investor Syndicator down here in Cincinnati, so they're always on. But investment joy yeah, he's always like dumping the quarters out and stuff. That's. It's fun to watch. That it's yeah, yeah. And you've got your own YouTube channel right in your own podcast when it, when it comes to this, right, yeah yeah, so, yeah.

Speaker 3:

So my podcast is like long form interviews with laundromat owners, industry professionals. They're sharing what's working in their business. They're sharing, you know what, what they wish they knew when they were buying their first laundromat. It's, it's, it's listen, genuinely, it's a. It blows my mind, it's a. It's a top 1% podcast and it's about laundromats. It's wild and it's it's. What's so cool about it is that this is going to sound like I'm patting myself on the back, but I'm going to tell you why I'm not here in a second. But it's changed so many people's lives because other owners and people in the industry are willing to come on and share their quote unquote secrets about how they're, how they're running their business successfully, and so anybody who is willing to actually take the action can hear what people are doing and start implementing all these different things into either their acquisition or running their own businesses. And it is incredible and the reason I say I'm not trying to take any credit is because I don't do anything on there except for just asking questions and it's all. It's this industry that is sharing with each other and it's just so, so cool to see.

Speaker 2:

Well, it's great to I mean, you know me having a podcast too. It's good to have these experts on and just give you a different ideas. I mean, I've been trying to get you know a laundromat guy here for a while. Sounds like you've got nothing but laundromat guys. But you know, there's other things that you learn when you're doing these kind of things. You know this is the benefit to me. You know, I don't have to get paid a dime off this podcast, but I get knowledge. I get information from people on all these different side hustles that they create, of things that I could potentially be doing to earn passive income on top of what I've already got with my agency and everything. So it's like you learn and you learn and you learn. I mean I. The number you just threw out with the $50,000 is amazing. You know people that would be just one laundry mat would change somebody's life If they're making 50 grand. What do you net, though? I mean? So if you're doing 50 grand a month, like what could? What are you pulling out of there? Like, after you set something aside for taxes and you do everything else, what do you think somebody's making a month?

Speaker 3:

Yeah. So so here's, here's what I love and you know this will be, this will be a little controversial, but it's really not controversial. So you know, one of the things I say all the time is so I'm a real estate investor, I have real estate. I actually probably that's probably my first love is real estate. However, you know the the average real estate deal cannot touch the average laundromat deal when it comes to cash flow. Can't touch it and the reason for it is because of base hit, base hit, laundromat. Your net at your, your cash flow, net operating income, is going to be 20 to 25% return on your money and once you add leverage, that's unleveraged. Once you add leverage to that, it goes up beyond that. So it's not uncommon to get a you know a 35 to 50% cash on cash return in a laundromat.

Speaker 2:

Nice, and go ahead, we're going to say that, no, no, no, just explain leverage to people, explain how that works.

Speaker 3:

Yeah, so. So if you, if you get a loan to either acquire the laundromat or and or put new equipment in to your laundromat, the way that it works is you're putting less money into the deal. So if you buy it let's just easy number if you buy a $100,000 laundromat with all cash, you know you're you're probably going to make 20 to $25,000 a year. If you just buy it all cash, right. But if you get a loan, you're putting less money down and, yes, after you pay down that loan you're actually netting less than that 20 to $25,000 because you have to pay off the loan too, but you have less money into it. So your actual return on investment actually goes up. You know just as a percentage. And so you know, for a laundromat, if you just buy all cash, 20 to 25%, you can see it, and that's a base hit deal. So you can see how that can compound really fast. You can't find that kind of return almost anywhere else, especially in a business where, depending on how you set it up, you could only work in that business five to 10 hours a week and get that kind of return. So it's just you know it's a very, it's a very lucrative. You know business to be in and you know. So you ask, like, you know, how much can somebody? You know net, you know there's a whole wide range, right, yeah, whole range. But if you're you know, generally speaking, you know a 25 to 30% net profit margin is, you know, a pretty good average for a laundromat. Now, it can be higher than that, it can be lower than that depending on how you run your business, but that's a pretty good ballpark number to be shooting for.

Speaker 2:

So you could be bringing home 10, 12 grand a month in money which could replace I mean in Cincinnati that would replace the vast majority of people's income here.

Speaker 3:

So oh yeah, just with one, yeah, and you know, to be fair, this guy is he's killing it at $50,000, not every laundromat. I'd say probably an average laundromat, 15 to 20,000 gross a year, and so you're probably netting eight to 10.

Speaker 2:

That's still replacing most people's income.

Speaker 3:

Yeah, yeah and that's. And that's the point is like, if you're, if your goal is, you know, to leave your W2, your nine to five job, if your goal is financial freedom, yes to me, you know I'm I'm like the product of all of these real estate investing podcasts, like that's how. That was my like introduction into all this is real estate investing. And I was like, yes, cash flow from real estate investing, I love that. And then I was. I was listening to these things while I'm like renovating my first laundromat and then I started doing math and I'm like, well, if I'm replacing my income, I got to have so many properties like single family homes or so many doors, like if I'm you know, at the time it was like you could get like 200, 250 a door, you know of cash flow after you apply leverage and all that stuff. And I'm like, dude, I've got to have so many. But here's the reality is, one to three laundromats will replace almost everybody's nine to five income in the country. Right, one to three laundromats is all it takes Unbelievable. And so If your goal is to financial freedom or leave your nine to five, to me it makes so much more sense to buy a business like a laundromat. Get that cash flow that you need for the freedom and then, if you want to buy real estate, use that to go buy the real estate after you've already achieved your main goal, which is leaving your nine to five or achieving that financial freedom where your laundromat income is covering your expenses Then go do the more wealth building, because you're going to get more equity appreciation in real estate most likely than you will in laundromats.

Speaker 2:

So then apply that cash flow to the real estate and build that generational wealth and all that stuff after you've achieved that financial freedom leaving your nine to five- yeah, and another thing that we didn't talk about is when you use leverage, it's not just people who don't have a lot of cash that, when you borrow from the bank, this is something wealthy people do too. I mean, if you're going to make more money off of that debt than what it's costing you, then you do the deal right, because what that does is, if I've got $100,000 to invest, why would I put all that money into one laundromat and just buy all the equipment out, when I could put down money on five deals and leverage the bank money? And here I go here's $20,000, here's $20,000, here's $20,000, here's $20,000, here Now I've got five laundromats and I can leverage bank money for each one of those laundromats, versus me just going and buying one laundromat and paying off all the equipment and I'm going to make more money.

Speaker 3:

Yeah, or you can take that $100,000 and buy essentially $100,000 is going to buy you a fixed or upper laundromat at that price point, or you can go buy a stable cash flowing from day one nice laundromat for $500,000 and put your 20% down or whatever to acquire that laundromat. And now you've eliminated the majority of your headaches, you've eliminated the majority of your risk and you're just going to get that solid cash flow, and in perpetuity until you sell it or whatever with it. So yeah, buying multiple deals or buying a bigger deal and then being able to leverage that down the line too, if you want to, to grow more.

Speaker 2:

Yeah, and then I mean, why leave your job? That's a pain in the butt just to pick up another pain in the butt? You know I mean it's. You know you don't want to have to be there dealing with maintenance issues and water supply problems and all that wild stuff. So yeah, so I mean, and outside of just owning the laundromat, I had a guy on here actually I had the manufacturer, and then I had a guy on here who runs a ice vending business. So this, this company, makes these machines that just dispense water and they dispense ice. When you own a laundromat, you've got people walking in the door. You don't just have to sell and they're sitting there. There's nothing else for them to do. So they're sitting there waiting on their laundry to get done, unless they feel comfortable enough to leave it there. But you have vending opportunities inside of that laundry mat. And there could be potentially other things. I've even kicked around the idea on campus up at UC to create a laundry slash coffee house. So on the roof you have a little barista and you have a little coffee house and it's this little one level. Building down below you had all the you know the the laundry mat. People are doing their laundry. They go upstairs, they pop open their laptop to get some work done, drink some coffee, go down and get their stuff and out they go. So there's like other opportunities. You've got a group of people that are there for at least an hour doing this laundry. Sell them some candy, sell them some chips, sell them whatever it is.

Speaker 3:

Well, listen, we're on side hustle city podcast, right here, the side hustle city. So here's. Here's my pitch to anybody listening here is that laundromats are the actually the ultimate side hustle in my opinion, and the reason for that is because laundromats are a great side hustle in and of themselves, but then you can fill your side hustle with other side hustles, just like what you're saying, right, you can have water vending machines, you can have ATM machines, you can set up a little convenient store in there. You can have vending machines. You can have massage chairs, you can have, you know, coffee houses there's, there's some with like pubs or breweries in in the laundromat. You got to be in the right. You got to be in the right neighborhood to do that one. You don't want to, depending on what neighborhood you're in, that might attract the wrong kind of people. But if you're in the right neighborhood, right Like so there's, and not to mention, then you could also add multiple businesses on top of that. Because I'd argue, a pickup and delivery business that you operate out of your laundromat is actually it's a pretty different business than the self-serve laundry, not using the same assets, but there's a whole different demographic that you're shooting for, a different skill set that you need to run that business. But you've got all these side hustle everywhere, from just adding a little gun ball machine all the way up to, you know, adding a pickup and delivery service out of there. That can net you had thousands and thousands of dollars a month, right. And so I think laundromats are almost the ultimate side hustle because you can, on top of it itself, you can just fill it with a whole bunch of other side hustles.

Speaker 2:

Plus, it's making you enough money that you can go out and do other side hustles outside of that. So I mean there's, there's that option as well.

Speaker 3:

So if you don't want to, or just do nothing.

Speaker 2:

yeah, just replace that $60,000 a year job and do just have a laundromat. Yeah, well, one thing too is my wife owns a spa and every time someone comes in the spa she has to take the sheets off. She has to. She's got these towels, hot towels, she puts on their face and things. All that stuff goes into a big basket and at the end of the day, I mean it fills up like crazy. She's got four or five appointments a day. She takes this bat, she takes this and there's a company that comes, picks that up, takes it off clean clothes company and brings it back to her and it's all clean again. Those type of businesses, you know, locating your laundromat not just next to a busy apartment complex that you know people may not have access to facilities, but also these businesses, these spas and things like that, hotels that go through a lot of laundry and may not have enough equipment there to do stuff. I mean there's, there's opportunities like that. Have you found any businesses like the spa, businesses or anything that are, that are good to be by?

Speaker 3:

Yeah, absolutely. You know spas, salons, some of these smaller motels, hotels that don't have their own laundry facility, restaurants that have, you know, knap cloth, napkins and table cloth there's a whole bunch In fact. I run a cohort course with a buddy of mine and we talk about how do you find and and acquire these other businesses as your pick up and delivery customers for your business, and that is actually for people. The other kind of cool thing about this is that you actually don't need to own a laundromat to do that. Right, you can run a pick up and delivery laundry service out of somebody else's laundromat, you know, and you don't actually need to do that. Now, that's a difficult path. I would say. That is on the scale of passivity, that's on the higher end of activity. But I've had multiple people. I have a super good buddy of mine down in the Houston area in Austin both Houston and Austin and he actually built his business that way and he built it into a $3 million company and then he sold it and just killed it that way before he owned any laundromats. He ended up buying laundromats after the fact after you built that business up. But you can actually build up that business that way too, without actually even owning a laundromat. Good for him.

Speaker 2:

That's a great idea, that you know what. That reminds me of the people that do the Airbnb arbitrage. Yeah, you know, they go in and they rent an apartment. You got to tell the landlord you're doing this. But you go in there and you rent an apartment and you say, hey, look, I'm going to rent this from you, I'm going to give you your money, but I'm going to Airbnb it and they, you know if they get their rent and everything's cool. A lot of times it stays cleaner than if you have a long-term tenant there, because you have to clean it every time somebody comes in. So the landlords do actually like this sometimes. But yeah, it's the Airbnb arbitrage. But what you're saying is this hey, if you don't want to invest in a facility, just use somebody else's facility. You know, maybe build a website, get a little on page SEO there, do some advertisement, build up your brand and then eventually you can leverage the money you're making off of that into your own facility. That's a good way to hustle up.

Speaker 3:

Yeah, absolutely, and I mean I think that's a way that a lot of people who are, you know, one of the big barriers to entry in this business is high cost of entry, like it takes capital. I know there's a lot of like a quote unquote free laundromat. I don't want to say propaganda out there because you actually can. That technique can actually work. It's just not free really. But you know there's a lot of that out there and you actually can get in with very little money down. But number one, that's the riskiest way to get in this business. But a lot of people who don't have capital and can't find this very particular set of circumstances that need to take place to get these very low cost laundromats, they can get in this way by starting a pick up and delivery service and running out of somebody else's laundromat and developing a relationship with the laundromat owner and, you know, sometimes negotiating into discount down and you know basically, yeah, exactly, playing that arbitrage game where they pay X amount, you know, to do the laundry and they make Y amount when they, you know, from the customer for doing the pick up and delivery man.

Speaker 2:

I love it. I mean, you're so full of information when it comes to laundry stuff. I mean, I guess doing a podcast helps, but also the fact that a lot of stuff to be honest, but that you were in my wife.

Speaker 3:

Yeah, yeah.

Speaker 2:

I'm telling you I'm I don't know if you've ever done your Myers-Briggs always tell people like every. It almost comes up every time on the podcast. But it's like most of us, I think, are that like ENTP kind of. I've got a million things going on. I do. Most of them do about 80 percent, and then I, I, I follow the next shiny object. You know, I get real excited about a new idea and then I'm just like I'm bored with that. Now there's this new thing going on. Let me just, let me just jump over that. You know, yeah.

Speaker 3:

I've got. I've got that disease for sure.

Speaker 2:

It's a problem, hey, but we're the ones who love it. And you know what We'd also love to do share with other people. We love to share. Exactly. We love. We love it when other people make money Like the money is not finite, guys, despite what you hear from Bernie Sanders or some of these other people, money is not finite. Just because someone else has money does not mean you can't get money. Money moves with value. It bounces around, it follows whoever provides the value in the needs that these people want. The fact that you understand real estate helps you a lot in this. It helps you provide more value because you're putting your location where you know the need is, and it increases your chances of success because you understand real estate. You understand, I'm guessing, the communities you put these things in, and it's probably something you teach people in the course.

Speaker 3:

Absolutely. Yeah, absolutely. I mean there's there's so many cool things that you can do, but, like I said, it all hinges on getting in the right way. You know, and it's easier said than done in this business. To be honest with you, like I don't want to paint all of a sudden shine in roses, because it, you know, it can be a tough business to be in. Sometimes too. Whenever you deal with a lot of people or a lot of machines, problems are going to come up, right, and laundromats deal with a lot of people and a lot of machines. So problems do come up. And on the acquisition side, you know it's a. It's a cash business by and large. Still, there's more and more coming in with digital payment options and that's been revolutionary. We'll continue to be revolutionary in our industry in terms of, you know, both being able to manage multiple locations but also data collection, all that and be able to make better decisions. But, by and large, we're still a cash business and it's very difficult to evaluate, especially if you don't know what to look for to evaluate a cash business and make sure that you know exactly what you're walking into before you actually close on that deal and walk into it. So there's some obstacles to overcome there, right. But if you get somebody who knows the business on your side, you're in pretty good shape. You know to get in the right way the first time, then sky's the limit for you. Man, I love it, man.

Speaker 2:

Well, tell people how they can reach out to you, how they can find your course, how they can find your podcast.

Speaker 3:

Yeah, so Laundromat Resource Podcast is the podcast. So if you're interested in laundromats at all, go, go, take a listen. It's very cool to hear from these owners talking about their successes and failures and how they got into this weird little business that we're in over here. Laundromatresourcecom is the platform. We've got a whole bunch of stuff going on over there. We've got a blog, there's a YouTube channel, we've got some free courses and you know, if you go to LaundromatResourcecom slash Side Hustle City, we'll make sure you get set up. If you're interested in taking the full course, the full course is awesome. So there's a free course to give you the basic understanding valuation Go take that. It's free, absolutely free. Go take that. But if you're seriously considering buying a Laundromat, I just you know I'm not trying to sell you the course, but I guess I kind of am, but for good reason, because I think that you know this course has thousands and thousands of hours of experience, both my personal from buying and owning and all the lessons I learned from the pain that I experienced getting into this industry the wrong way. But also, you know, I've got hundreds of podcast interviews now under my belt where I've talked to successful owners and figured out what they're doing and how they got in this business the right way and mistakes they made. I'm a broker here in California, so I've got experience and knowledge coming in on this side. I'm well connected in the industry, you know, and I do consulting. So I'm talking, I'm looking at oh good, you know I'm looking at deals all the time, all the time, hundreds and hundreds and hundreds of deals a month that I'm looking at with people and for myself, you know also. So all that experience and knowledge is in that course. But also it comes with all the tools and resources that you need to just make sure, like I said, you get in the right way the first time. So we'll make sure we set you up. So if that's something you're interested in, go to laundermanresourcecom. Slash side hustle city all one word and we'll make sure you get set up. Love it, man.

Speaker 2:

So you'd be down to like totally come out maybe and like look around and see what's going on in Cincinnati and say you should do it there.

Speaker 3:

Sure, yeah, sure, if you want to. I mean, look at man.

Speaker 2:

You should buy this equipment here.

Speaker 3:

Yeah, the destination spot, so yeah.

Speaker 2:

That's right. I hear people are looking to buy houses here and stuff sometimes. That's right.

Speaker 3:

I got my brother out there right now who's thinking about moving to Cincinnati.

Speaker 2:

So so, hey guys, hey, we need more people here to go to my laundromat when I start one up.

Speaker 3:

So if you're thinking about moving.

Speaker 2:

Cincinnati's your spot. Listen to the guy from California.

Speaker 3:

That's awesome.

Speaker 2:

All right. Well, Jordan, I really appreciate it. Man, I hope you have a great weekend and God bless you for doing what you do and helping people understand how to free themselves from their nine to five job by by buying a laundromat.

Speaker 3:

Appreciate it, appreciate it, listen, appreciate you having me on. It's such a huge honor to be on here and you know, like laundromats is just a vehicle right. My whole goal and I think we're aligned with this right my whole goal, my whole passion is to help people get more freedom in their life and more stability. You know, I've you know, with my experience with laundromats in the very beginning, where I was losing money, and other times in my life also, I just know the stress that not having enough money puts on you personally, on your relationships in your family, and it just it makes life so much harder, right? So my goal I think probably your goal too with this podcast, is to help people, you know, relieve that stress and find a little bit of freedom, find a little bit of breathing space to be able to do the things that bring joy to them and also be able to contribute back to other people, which, by the way, is another great perk of owning a laundromat, is you're, you have the ability to impact a community in a great way. So, anyways, all that to say, I appreciate you bringing me on and talking laundromats with me. I know that not necessarily the most exciting topic, but I had a great time talking with you.

Speaker 2:

Well, the money sounds exciting. I'll tell you that. So that's what I'm talking about. I appreciate it. Jordan, Thank you I bet I got you Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests. Now let's hear from you. Join our community on Facebook, Side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.