Should I buy this laundromat?

[boisepaw]

A friend of mine got a virtually brand new laundromat in the Pacific Northwest a few years ago when the owner went bankrupt. It has 48 washers (not sure how many dryers) that are now 3-4 years old. It is open from 7 am to 10 pm daily, has only averaged about $12-15k/month in sales the last 9 months while paying an average of almost $4k/month in utilities and another $4k/month in payroll. He also has four tanning beds. By his own admission he isn't making a penny on it but since he lives 500 miles away he just wants to get rid of it. He paid $85K for the equipment a couple of years ago. He wants to get something for the equipment but his primary goal is to eventually get his rental back up to $5500+ per month. He'll start at $3700/mo rent. His broker has had it listed at $200K which my friend recognizes now is very unrealistic (1.5 years listed and no offers). Is it possible to turn around a business like this and how much should one pay for what is obviously now a losing proposition? Any ideas? A note, he isn't asking me if I want to buy it. He's considering just shutting it down and re-leasing the property to someone else. But it is really a very nice facility with very high drive by traffic so, being the glutton for punishment that I am, I'm wondering about buying it.

[JamesD]

Turnaround is an interesting concept, since it doesn't sound like it EVER made any $$$. He should pay you, or someone else, to take it.

Get over the fact of how new, pretty, or big it is. If it doesn't make anything it is a dog.

How about cutting a "lease" deal with him where you run it for free for 6 months to see if you can bring it back. You pre-negotiate a price and buy it at that time if you think it will work or walk away if it doesn't.

The cost of the equipment and setup to him is irrelevant if it isn't profitable.

[boisepaw]

Thanks for your note...
Actually it seems to have made a little money at one point. He has never attended to it, living 500 miles away. But in March of 2003 the sales were $18,763 and in September of 2003 the sales were $16,231. He was paying himself rent of $6-7k per month and paying onsite staff $4000 a month.
Is the main problem lack of attention and marketing or is it more endemic than that?

[Burley]

$6-7,000 per month rent? How many square feet are we looking at here? Also, does the WDF service actually pay for itself? Could you go unattended, cutting cost, and still make a go of it?

[dram]

If this mat is in Salem, I initially looked at it and since I was about 1hr away I walked away from it. It has been for sale for a long time and there is a very good multiple mat owner in town who you would have to compete with. The owner as I understood lives in Eagle and owns the whole shopping mall and in my opinion wants way too much for the rent. After I saw the gross and rent numbers I did not pursue any further.
If you can get a good lease, the location is not bad and you might be able to make a run at it.

[petefritz]

rent is to high for the gross. The space may not be viable for a laundromat at 5500 a month with 12k sales. This explains why nobody wants the place, even the owener