The Top 5 Questions I Get About Laundromat Ownership Answered

Hi, I’m Keira Hamilton. I’m an SBA loan broker and former laundromat owner. If you’ve ever wondered what it’s like to own a laundromat, you’re in the right place. Since buying and operating my own mat in San Francisco, I’ve gotten a ton of questions from folks curious about the ins and outs of the business. Today, I’m answering the 5 most common ones, diving into why we made the leap, how we financed it, what our profitability looked like, and some of the biggest challenges we faced along the way. Let’s get into it!

1. Why Did You Decide to Buy a Laundromat?

When my husband and I were looking for our next investment, our first thought was more real estate. We already owned a small multifamily property in Oakland, but we struggled to find another property where the cash flow made sense, even in out of state markets. Plus, with real estate in the Bay Area, there’s a lot of risk and concentration—if one tenant stops paying rent, you can lose a significant chunk of your income.

That's when we started exploring new avenues and came across the idea of entrepreneurship through acquisition (ETA). The thought of owning a small business intrigued us—especially the potential for a greater return on investment compared to real estate. I’d gained valuable skills managing commercial buildings in San Francisco, but I was also ready to try something different than a typical 9-5. We were nervous and excited to try something new.

Laundromats specifically appealed to us for several reasons. For one, they’re straightforward—the service is easy to understand, and the business model isn't complex. If you have some basic business skills and the willingness to learn, you can pick up the operations pretty quickly.

While laundromats aren’t entirely passive, they do offer a level of flexibility that’s hard to find in other industries. Sure, they require work, but compared to a traditional 9-5 job or other businesses, laundromats have stretches where they’re unattended yet still bringing in revenue through self-service customers. While they are not recession-proof, they are pretty recession-resistant. People will always need to wash their clothes.

2. How Did You Finance the Purchase?

We purchased our laundromat for $190,000, and we were able to finance it through a loan from a family member, which allowed us to make a competitive cash offer. The sellers were only considering cash offers, so this arrangement worked out well for us.

For those curious about SBA loans for laundromats, they can definitely work, though there are some challenges. Laundromats often deal with a lot of cash. And like many small businesses, they are often mom & pop shops and may not have the cleanest financial records. But as more laundromats transition to card payments and apps (75% of our revenue came through Cents and PayRange), they become easier to finance through SBA loans.

3. How Much Money Did the Laundromat Make?

People often hesitate to ask this one directly, but I know it’s on everyone’s mind! We improved our laundromat’s profitability by about 36% since we bought it, bringing our seller’s discretionary earnings (SDE) up to around $80,000. SDE is a common metric used in valuing small businesses, as it reflects the earnings available to the owner.

While $80,000 in annual income wouldn’t be enough to sustain us in the Bay Area on its own, my work as an SBA loan broker provides additional income, allowing me to maintain a balanced lifestyle. Plus, the flexibility of both roles means I get to spend time on the things I love, like training and competing in Brazilian jiu jitsu.

4. What Were the Biggest Challenges You Faced?

Owning any business comes with problems. It’s all about picking the problem you’re able and willing to deal with. Here are the top challenges I encountered:

1. Distance
Our laundromat was in San Francisco, while we live in Oakland. Without traffic, it's a 25-30 minute drive, but it could take up to an hour and a half one way. That distance could be challenging when unexpected issues arose, like equipment problems or last minute employee coverage needs.

2. Machine Issues
If there’s one thing that can make or break a laundromat, it’s the machines. Older machines require more frequent repairs, and that means more customer complaints and service calls. When I first took over, I relied on large repair companies, but they were expensive and often ineffective. I eventually found a fantastic independent contractor through Craigslist, and he was a game changer—affordable, experienced, and reliable. If you’re struggling with repair costs, I highly recommend seeking out independent techs.

I learned over time that even new machines can have problems. We had Speed Queen washers that were less than 3 years old, but there were a couple times when the door sensor didn’t catch a small obstruction and the seal didn’t fully close, causing water to leak out all over the floor as the machine kept washing. It’s impossible to anticipate when a problem like that is going to happen, and when it does you want to respond quickly.

3. Pickup and Delivery Logistics
We offered wash & fold services with pickup and delivery. Cents (our POS) integrates with Uber and DoorDash, so we didn’t need to have our own driver. For the most part, it worked well—I liked the flexibility of being able to open delivery slots any time of day. But, because the drivers weren’t my employees, I didn’t have very much influence over how they interacted with customers. There were occasional hiccups, like missed pickups or confusion with addresses. About 95% of the time, things went smoothly, but those other times required a little extra effort from me.

5. Why Did You Sell Your Laundromat?

Ultimately, we decided to sell because a hands-on investment didn’t make sense for the new stage of life we were entering, one where we wanted to travel and then likely settle down in a different city before starting a family. Laundromats are not passive income. Even completely self-serve laundromats require daily attention. We needed to either commit to San Francisco, double down and buy a couple more laundromats to be able to afford a manager, or sell.

I still think laundromats are great businesses, and I’d be open to owning more in the future, but it would need to be at a larger scale where I was able to afford a quality management team to respond to the day-to-day issues.

Final Thoughts

Owning a laundromat was an incredibly rewarding journey. It felt like getting my real world MBA. From the initial decision to buy, to the day-to-day operations, to the experience of brokering my own sale, I learned so much about business acquisition and ownership. I now have the confidence, capital, and capabilities to make a larger acquisition in the future.

If you’re considering buying a laundromat or just curious about what it’s like, I hope this post has been helpful!

If you have any more questions about acquiring, owning, or operating a laundromat, check out my YouTube channel for more info! You can also stop by my Office Hours or book a one-on-one consultation with me.

I wish you the best on your entrepreneurial journey!