The $0 Laundromat: Exposed.

a bucket full of quarters each month make an 8k what's up everybody is to meet Kevin from California right now I am in Ohio it just started snowing last night and I came out here to collect coins at this coin laundry and understand how it's possible to make money on a laundry mat that was bought for $0 now we'll talk details but let's go to collecting some coins first so I've always been fascinated by the idea of putting money into like a vending machine or an ATM or a laundry machine when my parents moved to the United States from Germany we didn't have a lot of money so as a child I remember the feeling of coins going into this and sliding it forward and sometimes they could jam sometimes it doesn't works and hopefully 70% of the time the thing turns on but I've never been on the other end of actually taking the coins out so that's what we're gonna do right now now one thing we had to do this is a thanks to YouTube is we actually had to pre open the coin cases here because apparently people were zooming in to the actual key and people that are experienced in keys can make a copy of it just by looking at a 1080p picture zoomed in of the key so in theory people could come in here and come grab the coins themselves with keys they made at home which is crazy but anyway so here's our first machine I don't know I personally I don't use the first one like the first on the toilet so let's see the other ones have more coins let's get the rest of these laundry machines which it's actually really it's really satisfying even though I just dropped 75 cents because I feel like I'm winning it chuck-e-cheese and it's really like winning an investing life but what blows my mind more this a lot of this is coming from a business that took zero money to start I just took basically the balls to go and go I'm doing it this is it's amazing and I'm pretty sure these were just said what are these emptied lastly a day or two ago that's amazing we'll have to count these two now I really love collecting these coins because to me this was straight-up mailbox money except dues laundry box money see these are the ones that people like right here these large ones look at these what are these the triple the triple loaders you want to know where the money is to the triple loaders you need some quarters all right we'll take them out it will sell we'll make some money off this guy and selling some quarters change oh gosh you want to make change with him okay you're getting the real laundromat experience now as soon as this guy asked me to make change for him I felt like my passive mailbox money became active money oh I haven't made change since I worked at Jamba Juice by the way many of you know that most of my passive income comes from investing in real estate learning from other real estate investors and passing along that knowledge to you you can see the links to my courses and in-person crash course events down below and on screen here is woody who says as a novice real estate investor with a few rentals before I've met Kevin I have learned more new ways to invest in value deals in the last two months than I ever have before yeah I don't see how doing this could get old you know I mean II used to come I mean you might have to come here every other day but this is fun now over here you also have a change machine let's open that thing up so this is the change machine a contrary to popular belief a lot of this doesn't end up at the bank what ends up at the bank are the dollars which the dollars come from opening up the change machine which you can see here you've got some change Wow somebody changed it 20 in here some extra cash and this this is where the coins are I believe oh my gosh oh wow and so I guess you would just usually add to this you would fill to this so you would take your cash and fill this up all right well let's go count the coins we have then should we take this let's take this [Music] so here's a little bit of background that Brandon runs a YouTube channel called investment a joy and posted some videos of him collecting coins from the laundromat he's also posted some information about how much money the laundromat makes but I wanted to meet him here in Ohio and find out where did you get the money to buy the laundromat where are you making the rest of your money what are you investing in and why a laundromat and more importantly how the heck did you do it with zero dollars out of your own pocket but first let's count some passive income so now I'm gonna go next door and do some counting with what I just collected I did not dress for this I thought I was gonna be like 40 or 50 and it's like 20 it was 40 or 50 when you flew into town and then it dropped down to 15 so that was the mistake I made all right so we're coming in with my loot it's a whole lot I I would that would have been a very happy day at Chuck E Cheese okay so and we use quarters here not like any kind of tokens or whatever these are just straight up I mean that's like two dollars and fifty cents right there man so let's go ahead and count this so I believe I have to hit power then start okay power [Music] okay yeah slide them down the slope and they didn't go anywhere so they gotta go in the whole account oh my gosh comes out of there fast Wow I mean this is this is like passive income right here this is what passive income sounds like I like the sound of passing it's mind-blowing to me that you could operate this business and come here and collect these coins with no money out of pocket I mean that's how more American could that be all right here we go ah this should give people hope Oh Wow okay so we have collected 574 quarters I collected 574 quarters so that's what uh buck 30 buck forty a little more I'll do what you did when your videos and we'll just say well put the correct number on screen okay so now in theory the money that I'm putting in this this is now my earns money this I'm just making change so I'm still getting the dollars so this is kind of like investing back into my business and not having to lug this heavy thing to the bank I like that like I could do this more often alright now let's find out exactly how this laundromat was purchased for zero dollars out of pocket this is a laundromat that I bought I have no money in it out of my own pocket I bought it for $85,000 and when I say I bought it for $85,000 that's the total deal cost that's not my cost the seller carried seventy thousand dollars in financing which means the deal required fifteen thousand dollars down that money didn't come out of me I use private investment on everything I do so I found somebody that I knew that had tons of money to spend and they wanted a little bit of a return nice message them I said you would you guys want to buy a laundromat and they said cool Brandon that sounds fun let's go buy a laundromat so they loan me forty thousand dollars to pay for the down payment and the rehab on this price so out of my pocket I'm still at zero and I've gotten this laundromat we spent $25,000 on renovations I know it doesn't look like it I know I get criticism all the time Brandon this place is a dump but it's one of those things where I try and run all my businesses the exact same way without spending any money out of my own pocket and too I make the business support itself so any of the money that comes in here that I should be paid goes right back into renovations and upgrading and the problem is a lot of things are very expensive to run to put new equipment in here it's going to be about 120 thousand dollars the cost of several houses so I have to make a choice it would I want to spend money out of my own pocket on bike buying new equipment what I want to spend money out of my own pocket buying either houses what's going to be the most beneficial thing for me for my family but also the people here at the laundromat would it make sense to go out and buy new equipment on financing spend a hundred and twenty thousand dollars spend you know fifteen hundred to two thousand dollars a month and risk the business being closed or would it be better to have some dumpy washers and dumpy dryers for the next six months to prove that the business actually works actually can make money actually support the community here and do it in a way that I won't foreclose on myself now what kind of experience does it take to become a laundromat entrepreneur when you first came upon the laundromat business did you did you think I don't know how to run a laundromat like what like what came what were you thinking oh yeah believe me I thought I don't know anything well I'm ready most people when they think about starting a business they're like oh I don't know and then they'd they plan and they never actually do anything we'll see yeah I just did don't know anything about dryers I've never I've done like three loads of laundry my entire adult life and twice it was here when I brought clothes for my house to just make sure the dryers work I don't know about any of this did you make sure to wash here first yes okay I had tested the washers out I'd I'd ride here so this is something I have no experience about what did you get motivated to let's get into laundromats because you could get the money yes your money out of pocket I knew that there's there's apartments upstairs I have risk mitigation over all my other laundromat that's not an open there's apartments over there to my risk on these buildings is essentially zero but even though you were borrowing everything even though I was borrowing everything my risk is essentially zero on them because the apartments that come with it they'll pay for everything so I can do this other business risk free or at least risk mitigated on my end and I asked to have this question can I do it is this laundromat business real estate vending thing is based on my knowledge and my ability to learn things or is it all pure look it seems like most people will hear okay so a lot of debt that's a lot of risk you have no chance like everything's just gonna you know blow up in your face in the next recession what's your response to that well I've gone I have played this scenarios cuz I was a real estate agent 2006 I got my license in 2006 and I was i sat front row for the recession and when I found when land boards had flexibility in their their rental prices I can lower my rental prices by a lot how much did would you say that people had to drop their rents during the recession maybe five to ten percent that's not a lot no it's not but you had to have this flexibility to accommodate to accommodate somebody that has just lost their job they've lost their job they're going through a hardship having some cash reserves or the flexibility to lower the rent just a little bit wait in a couple extra weeks on payment to sit down and really look at that person situation how can I help them be successful in this rental and if you have that flexibility you will do awesome so in other words I mean I think people that who don't invest or who want to invest who want to be entrepreneurs but they're not yet they're worried about all these worst cases yet what I continue to see as I travel around the country or talk to people much like yourself it seems like entrepreneurs and people who were actually investing are really good at solving problems when they come up it's all about hustling and I've talked to I've told my kids I've told my wife I've told my investors I tell people on YouTube I am NOT proud too proud to do anything what the thing is from my perspective one I'm not above doing any work myself to I want to at least try try my best effort to get a good feel of what it takes to get done so then I can provide advice advice to my contractors now let's talk about some of the expenses associated with the laundromat the best tax write-off in America right here a machine you can depreciate 120 percent Wow so speaking speaking of accelerating these with a bonus depreciation essentially then you know what's the maintenance that goes into you know I see a couple out of order signs you know you got no smoke and keep off the folding tables what are some of the problems that you run into the biggest problem that I have here should be obvious if you watch the video is out of out of service equipment yeah it's just transmissions parts and things like that and I'm kind of stuck between a rock and a hard place trying to figure it out there's a company that I can call and they charge 50 bucks an hour my preference which the labor rate here is not that high yeah it's 50 dollars an hour's not bad for nationally but in Ohio kind of sucks and I have this because what do you pay handy folk here like 20 bucks an hour yeah 20 bucks or less and so my brother runs a he we did a video on YouTube where he flips he finds appliances on the side of the road and fixes them oh my gosh it's hilarious and so he fixes fine supplies on the side of the road he fixes them up and then he flips them and sells them on Craigslist Facebook marketplace those kinds of places and he has a couple contractors that work underneath him they show up when they feel like they leave when they feel like and he's trying to develop them into a relationship where they can transition from contractors to employees he's not at that point yet but he's kind of got that and so this is kind of like the training for them to become full-time employees so he can potentially start his own laundry service company or vending equipment service company this is their training field for equipment and I hope they're not watching this but they do a crappy job a lot of the times yeah now let's talk about some other expenses the laundromat might experience 20% of the quarters that are going in the machine aren't reading correct there's an infrared a break beam in there and the break beams on the fritz could somebody put a like a cardboard yeah it's just an infrared sensor okay no the good thing though I that I see here is I don't see any full-time employees sitting here you are correct tell me more about the joys of employees I avoid ploy employees like the plague I had this old got older gentleman he was a CEO of an oil company and he said any time he can avoid avoid an employee do it he also was the largest subway subway franchise owner in southern Ohio you know 30 23 Subway's at one time and his whole idea was fine any business that you can get into with the least number of workers for you so he said you need to have rentals you need to have laundromats you need to have vending machines and you need to have storage lockers and I'm working on the storage lockers right now because all of those things require such little labor on them they're easy to scale so looking at the laundromat any way that I can get away from having full-time employees I'm going to do it it's also why I don't have fluff and fold here I could double or triple the net income this produces if I took in laundry from other people sometimes when great ideas come with more employees the great idea isn't that great anymore now what about like building maintenance I mean you bought this so you're stuck with dealing with the windows the floors the bathroom you know there's like a stain on the ceiling over here like how do you handle all this and what are the common things that you're up I've got regular contractors that I've had the opportunity and privilege to work with for the past six years and they come in and they do a lot of the maintenance they do maintenance for some of the other landlords here in town which is a really great relationship I pay him decently we've got a great relationship together and they come in and do the work they're also working at a trailer park for me right now and they are knee-deep into trailer park stuff so we haven't been able to come here and finish up some of the extra rehab work a lot of people say oh well you should try to grind for a discount because you've been working with them so much and I'd like to take care of them I've got a great relationship with a lot of these people in town and for better or worse I know where they live they know where I live and it doesn't it isn't an added advantage to anybody to screw somebody over in a smaller marketplace so we tried I try to be friends with my employ might not my employees my contractors I try to have a good relationship with the other investors in town and we can all build together this symbiotic relationship we help each other we make money I helped what my one contractor get into his own house a six bed two bath house paying a princely sum of 7-under dollars a month and I know this is in Ohio but I'll tell you right now that house would go for about three grand easy no I asked of Brandon ever has any crime and he went to tell me the story about when his coin pusher got broken into I didn't exactly know what a coin pusher was here's a picture of a coin pusher now I get it it's literally a coin pusher so when I had the coin pusher broke into and they're sitting there counting the quarters on top of my washer machine after they've stolen them and if you remember I said that I set quarters out no one had stolen them yeah I was able to see I'm unable to zoom in enough and when they were counting out the quarters they still like counted the quarters in exactly how much they stole from me so it's a really neat system that I've got it's not bolted to the floor properly the guys I don't understand why that he's not bolted to the floor properly and they can shake it back and forth enough that the alarm doesn't go off and shut the Machine down but enough to get some of the easy quarters to get off so so what's your long-run goal with these I mean you've got three laundromats now you're thinking of adding a fourth at the mobile home park just to cut off your competition yeah really I would like to package them up and package them up cash out refinance which is easy to do on a business like this as compared to a cheap little rental anything under 100 K is a lot harder to find yeah it's a lot harder to finance but but a business under 100 K is a heck of a lot easier and you can secure you can break off the business actual business from the real estate just based on cash flow it so that's a lot easier to do and it's why I also let me make this clear I don't cheat on my taxes because that's the goal for this laundromat is to be profitable and when you do like an SBA loan on a laundromat you have a profit multiplier of five times your income so if you're cheating your laundromat I'd figured it out you're cheating your laundromat say ten bucks a day that is three thousand five hundred and sixty dollars per year you're not pouring on your taxes which for your average Joe off the street night I to be honest with you I met a couple one a couple laundromat owners that do that well it's okay it's all cash it's so easy that people a lot of people will actually overpay for cash businesses because they think well I'm gonna be saving 30 40 percent of immediately takes the tax money out now the thing is you have a competent CPA and this all this equipment can be depreciated very effectively so there's there's major tax benefits to owning a small business especially like a laundromat but when it comes time to cash out refinance or to do that kind of thing that $10 a day as per the Small Business Administration the SBA loans that gets multiplied by five times so your your 15k for $10 and I don't know about you I'd rather take a $15,000 refinance that has because the interest is you can write that interest off your taxes if there's there's all these tax benefits to running the business the right way I want to find somebody with passionate who's with passion that they are all about a laundromat and potentially partner with them and say here's this laundromat it's been cash out refinance i financed the underlying mortgage I've refinanced my partner out this is Brandon's and then find that version of me however long down the road it is that can be passionate about cleaning the gasket out of the laundromat doing whatever it takes that might be why it's so hard for families to pass on well and then the family doesn't care there's nobody else cares you're passionate about it because you're building wealth with this and if my kids aren't passionate about it and they can't go into this big business I have four kids and I've told my wife and my wife's on board with us if my kids can't be passionate about cleaning a gasket in the laundromat which I can be passionate about because I see the long term goal I don't care about what happens to me in the next year or the next two years or the next five years for that which reminds me about what Brandon said earlier I could go walk out these doors right now and get hit by a bus I mean pork pork Kevin could get hit by a bus - I mean it could happen well I got ladder by the way was so easy oh my gosh yeah we were talking about this yesterday like because I've been going back and forth like applying for different life insurances and they keep me emailing me like what you have to call this person you have to call this 1-800 number and I'm like I don't know if time for that crap so it's literally been sitting by email for weeks and yesterday right before going to bed I go let me look at this ladder life.com or whatever it is literally approved and here Apple paid for your premium your first 50 dollars within like five minutes it's insane so I've got I've got a nice fat life insurance policy now straight up ladder life did not ask me to pitch this Brandon recommended this company to me the day before at dinner and I seriously didn't want to believe him but the application was really easy and it actually did take five minutes I was blown away so feel free to use the link down below if you're interested apparently if you're in California you get $10 if you use the link ten years to 20 years that's what I'm concerned about so the fact that Brandon had to spend an hour or thirty minutes going down to Dollar General buying those toothbrushes and scrubbing it out with that's not a big deal to me but if my kids can't see that long-term goal that I've got a hustle I've got to learn I've got to be passionate I've got track these things down my kids aren't getting the laundromats they're not get my rebels it seems like you've got a lot of you have you a lot of them yeah well it seems like you've got a lot of your focus on the long term where I think there is so much societal focus now on the short turns people are counting how much they're making every minute yeah now I've been watching the camera and obviously we've been in the laundromat somewhere out two hours now there have been just a couple people what where when does the traffic come it usually is in the evenings and Tuesday is technically my absolute slowest day yesterday was pretty busy I'm we looked at the quarters there and it was pretty high for Monday usually Monday through Friday a laundromat does one amount of money and then that money usually they do on just Saturday and then they do a repeat on Sunday so your Monday through Friday traffic's garbage than your Saturday and Sunday traffic is great so there you have a little bit of insight into the coin laundry business and how Brandon was able to buy this building for zero dollars out of pocket which he had the experience doing this one because he bought a different set of laundromats for zero dollars out-of-pocket so it really goes to show what you can make happen in America with a good reputation the effort then energy to get out there and go hustle and the motivation to just say you know what let's just get in and do it [Music] [Applause] you [Music]

Channel: Meet Kevin

Views: 972,835

Rating: 4.7922258 out of 5

Keywords: laundromat, laundromat collection, coin collection, money collection, laundromat business, entrepreneur, business, starting a business, money from a business, cashflow from laundromat, laundry business, exposed, $0 laundromat, $0

Id: EcCx5zgZC4M

Length: 25min 57sec (1557 seconds)

Published: Thu Nov 14 2019