How to analyze a laundromat deal
A good deal is rarely great on one dimension and terrible on another; it is solid across the board. The analyzer scores the six signals that decide most laundromat purchases and rolls them into one number, so you can triage a listing in seconds and know exactly where to dig.
Key takeaways
- A strong deal scores well across all six signals, not just one.
- Price, coverage, and return are the financial core.
- Rent, lease, and equipment are the durability of that cash flow.
- The score is a screen; verify every number in due diligence.
The six signals
Each signal is rated good, fair, or poor. Here is what each one measures and the rough thresholds behind the ratings.
| Signal | Good | What it tells you |
|---|---|---|
| Price vs value | At or below mid-range | Whether you are overpaying for the cash flow. |
| DSCR | 1.5x or higher | Whether the cash flow safely covers the loan. |
| Cash-on-cash | 15%+ | Your leveraged return on the cash invested. |
| Rent-to-revenue | Under 20% | Whether rent will squeeze the profit. |
| Lease remaining | 10+ years | Whether the store can stay put long term. |
| Equipment age | 8 years or newer | How soon a big replacement bill is coming. |
What to do with the score
Treat the score as a starting point. A strong result means the fundamentals are there, so move into real due diligence and verify every figure. A mixed result means negotiate: the weak signals are your leverage on price or terms. A weak result means walk unless the seller will fix what is broken. Whatever the score, confirm the SDE from tax returns and utility bills before you rely on any of it. Then dig into each signal with the valuation, ROI, rent-to-revenue, and due diligence calculators, and follow the buyer's roadmap for the full process.
Common mistakes to avoid
- Chasing one strong number while ignoring a poor one.
- Scoring the deal on an SDE you have not verified.
- Treating the score as a decision instead of a screen.
- Overlooking a short lease or old equipment because the price looks low.