From Homeless to Making Millions With Laundromats

from broken homeless to multi-millionaire this is Brandon's story on taking 15K and turning it into more than 10 million bucks with laundromats let's copy this guy's homework hey guys this is Brandon with investment Joy I run two laundromats two car washes over 130 rentals I have assets over about 10 million dollars and yet I did it while growing up poor being evicted twice and working pretty much every day of my life as normal people do when they walk into your laundromat I wanted to ask you some totally standard nothing weird about this questions like how much did you buy this thing for how much money did you make and what was the story that got it all started so these are all questions that I love and the answers uh 85 000 15K down and the reason I bought it was because I like money and I want to make money and after seeing the books on my first laundromat I realized that these things actually are profitable if you do them in the right way first of all I think people overestimate how much money they cost of course in big cities that's a different story but a little ones like how do you pronounce the name of this place this is Chillicothe Ohio they're actually pretty reasonable and they're pretty profitable so break down the profits for me specifically on this business acquisition was 85 000 I got it through seller financing the seller financed seventy thousand of the 85 saw I had to do was come up with 15 000 down my goals ten thousand dollars a month off this one we're currently at seven water runs me three four hundred bucks a month gas runs me two to three hundred a month electric runs me four to five hundred that's because currently I pay the electric bill for my girl that lives upstairs I've got two apartments as a part of this piece of real estate my biggest expense here beyond the mortgage the mortgage is 537 and some change a month sixteen hundred dollars a month in equipment loans so you're making three or four k a month profit in your pocket off of just the machines or the machines and rent the machines rent and vending that's the whole and that's the whole pile most people do not think about uh adding real estate to it and ancillary revenue streams or your vending and rental unit what made you decide to go that way was that because you're in real estate before so as a real estate agent I was allowed to take a peek behind the curtains on all sorts of different businesses and it was always interesting to me to look at a business and see how much vending made or how much ATMs made I looked at a buying a convenience store because it was down to this and a low convenience store in my town the convenience store made an extra fifteen hundred dollars a month net not gross off vending machines so I thought well if I have a business I need to build ancillary Revenue I think what a lot of people don't realize is that 10 to 15 in your business is a huge amount so sometimes it's a little thing it's a matter so a busy Street Brandon what's the deal did you do a car count before you bought this thing or how does that work yeah we did the state of Ohio provides data uh to investors or whoever for traffic counts and this was a very well studied road so I know I have 2 500 cars a day that go in and out of here I also know I have an apartment complex where no one owns their own washer there's 168 units in there so that's one of the key reasons I bought this what do you think this place is actually worth now if I sold it with the debt as well probably over 300 000. I've already had a couple offers in the 250 range so we've already built a decent bit of equity on this business do you think that's because we single-handedly increased the price of laundromats everywhere Maybe so you used to be in real estate you started with one unit then you got up to how many uh about I'm at 135 right now 135 units that's a lot then you said hey wait a second I think businesses might cash flow even more than real estate what happened and how did you find this deal I saw the books on this one A buddy of mine who's another big real estate investor he said have you ever thought about buying a business before and I was like I have no clue I even know what they'd make and he said do you want to go look physically at a laundromat this one this is four or five years ago before it closed down I bought it once again from a closed down business owner we came here we looked at the books they were making like 8 500 bucks a month in cash on this laundromat before they closed down and I said to myself if this business can make 8 500 a month gross not net why am I buying only dumpy little single-family detached houses when I could buy one of these and make more money than 10 houses I'd have one headache and one location as opposed to 10 headaches and 10 locations so I figured why not do it next 60 seconds I'm gonna reframe the way that you think about universities today now typically when I talk about going back to college I feel like this foreign and the reason why is because a lot of times they're really expensive they're inflexible and they tell you what to think not how to think but then I heard about this university called National University they have hundreds of programs online that are flexible for people just like you and I that are maybe running a laundromat or in a job that you don't like at the moment and need to figure out how to up skill and get to the next level but do it while you're making some cash they're actually really cool because they were founded by an ex-navy veteran they are one of the biggest providers of schooling for the military there's actually this guy Ryan zinke who basically went from being a Navy SEAL while going through their curriculum to graduating and becoming a congressman the world's happening faster than ever around us but we need somebody who's going to bet on us too that's why they gave out more than 50 million dollars in scholarships last year this year they're giving away something to you guys too but it's not around forever so you're going to want to click the link go check out National University do it while you're working so that in the future if other people work for you talk about how much time it takes to run one of these bad boys because that's what I always get on the internet is like Cody you could never run so many businesses all by yourself and you must be there all the time and blah blah blah and so I thought I'd hold a laundromat thing because this is about as much work as I've done on one of these things in a while but Brandon when you first bought a laundromat how much work did it take to find the deal and then how much work did you have to do in the business every single day I was spending a lot of work this deal fell in my lap more or less maybe five hours of negotiation mostly regarding the way the financing would be it wasn't getting the deal down it was just the financing aspect of it I wasn't here two three four hours a day for the first month that we went in and we rehabbed it incidentally enough I recorded all that so most of the stuff document how much time I actually spent if No One Believes Cody or believes me on how much time does it actually take to do these deals I was two to three hours a day for the first month that's Monday through Friday then once we got it actually up and running I was spending maybe two to six hours a week here I was down here every day Monday through Friday just to see how the business was working once we did the renovations we really built up a good standardized business process I am quite literally down to the time that I shoot video here I could probably spend 30 minutes to an hour every other week we are going to hybrid pay on this location so I'm going to have the option for credit cards and for coins I expect that to decrease my coin count by about half and that will take me to the point that I only need to be here for about an hour or two every single month I've got a sub manager under me Kim she's starting to pair my videos she's in here one to two hours a week making sure that the floors are clean the machines are working properly surveying my customers just making sure everything's fine and I'm not paying her an arm and a leg to come in and be a manager for me it's very time efficient so now I'm on the hunt for looking for more laundromats the only thing that people always say to me is like you got these big expensive machines you know they cost about you know let's call it 10K to 40K depending on how much you have to a bunch of people come in here and just like vandalize them and break them and all of this stuff I've actually knock on wood never had somebody vandalize any of my laundromats I'd be curious for you your doors are wide open here the only machine that I've had people vandalized has been my coin pusher which is the kind of a gambling gaming machine it's there intentionally I look at it like this big easy target for somebody that's going to vandalize if they're going to vandalize I don't want them to spend it on my expensive machines we took the location over and my equipment was crappier you could see where vandals tried to destroy the coin mechanisms those are expensive the coin pusher I can rebuild the whole thing for about 500 bucks here's the truth when you're running a small business we talk about the big fancy numbers and all the cash that you make because we want to create more owners like you because I think that makes a difference in the world but you're providing a service Brandon was telling us there are 160 unit rentals nearby without washers and dryers are they going to vandalize the thing that allows them to have clean clothes when you're providing a service for humans and you do it in a humane way turns out people are pretty cool [Music] okay now for the tough questions all right how do we get a seller to agree to finance uh seventy thousand dollars on an 85 000 investment how did you do that number one he was in distress this had set on the market empty with no money coming in whatsoever for about a year I had made him an offer and he said Brandon I need 135 000 have to have it and I said look you know this location is not making any money if you renovate it it's gonna cost all the money in the world I'm gonna be lower than that so after about six months he said you know what if you come up with 85 000 I'll sell it to you it's still not worth it and then I would much rather prefer that you finance it so that was at month six at month 12 he said tell you what you come up with thirty thousand dollars I'll Finance it for you and I said how about 15. he stood on it for another week and said all right let's do it and then I came with the kind of the upsell to him I said you know you're going to get some interest on this so I'm not making you interest only or um zero percent interest you're going to make some interest on it so then he can buy back a little bit of the money that he was hoping to make at a higher sales price so that's kind of my process for this laundromat and what's crazy to me is I've done it a bunch of times I've done probably a dozen projects similar to this one in terms of financing yeah it's the other thing that I think people part of my mission is to get people to actually believe in themselves which is a weird thing there are people all over this country right now that need you to divide their businesses they need to retire because of sickness or because their job got moved or because they're so tired they just can't come in and run this anymore or they're getting older and so I think this idea of seller financing some people think oh that's predatory you got it for that what a steal and it's like no instead it's an off-ramp to a human that then gets to go live another life I think you are spot on on that you know what one of my favorite mentors who's a billionaire actually told me one thing and that is never fall in love with something that cannot love you back in a laundromat certainly can't do that yeah now owning laundromats isn't always awesome as I know from firsthand experience what are the five worst things about owning a laundromat number one was starting a new business it's just a new thing I'm used to real estate I'm not used to dealing with customers so learning that whole brand new process probably number one number two was probably dealing with the money situation and I don't worry about getting robbed and stuff but the second that I had my work Crews come down here and do any sort of work especially like my female manager she got scared to death that she would get robbed I have business partners they will not collect money for me that was probably number two number three was just capital expenditure planning the capex that I spent on this early on in the acquisition was way higher than my real estate Investments these machines here were way more expensive than I would have ever thought this washer that's sitting right over here was about twelve thousand dollars which just blew my mind that this machine would cost more than the car I drive number four real quick would be just the amount of work that we had to do to get this number five was the amount of effort that I needed to throw in to attract new customers to really make sure sure the place was spotless every night the only thing I'd add to it is when it comes to the laundromats that I run it's opportunity cost when you first start out this is a great business as you get more of these businesses if Brandon's running all of them all the time it actually becomes a little bit of a net loss because of your opportunity costs which is something all of you should be listening to out there everybody's like Cody you're telling everybody to do vending machines and laundromats it's like no no those are the gateway drug businesses to learning how to do business and then once you've done a few of those you can go on to bigger games you could do a car wash which usually has bigger capex and you could play this game at different levels because just like business it's a game do you want to see who's better at Pac-Man sure another game let's do this all right let's see I don't know who's gonna be better at this

Channel: Codie Sanchez

Views: 108,740

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Id: F8o1fZQ-Wlc

Length: 11min 29sec (689 seconds)

Published: Fri Mar 24 2023