99. How to Scale Your Laundromat Empire to 10+ Laundromats (Plus How to Invest Passively in Laundromats) with Ross Dodds

00;00;00;20 – 00;00;24;13
Jordan
Hey. Hey, what’s up, guys? It’s Jordan with the Laundromat Resource podcast. This is Show 99 and quick funny story is when I first started the podcast, I never expected to get this far, I’ll tell you that right now. But I did in my computer and I was labeling the files with label, you know, podcast episode 001002.

00;00;24;13 – 00;00;47;11
Jordan
So I’m finally going to get to see that first digit turn over and the next episode, Crazy, Wild, never thought I’d get 100 episodes. Maybe I did subconsciously. And that’s why we’re here. The Power of the mind. Anyways, super excited to be here with you, with Ross Dodds, who actually funnily enough was guest of Show nine and now he’s guest of Show 99.

00;00;47;11 – 00;01;18;11
Jordan
We have to keep that trend going. Ross, you and me, show 999 and 9900. Okay, let’s not get carried away. But anyways, super good episode today. I mean, it’s jam packed. When Ross came on in episode nine, like two years ago, he had four laundromats and now he’s up to 13. And you know, we’ve started an investment fund together with along with Michael Ambrose, and we’re looking to scale that number up a lot more.

00;01;18;11 – 00;02;00;07
Jordan
And so throughout this episode, we’re going to talk a lot about systems, processes that it takes to be able to scale up to ten, 13 plus laundromats. And it’s awesome. It’s jam packed with information. I love how Ross approaches his business, and I think you’re going to learn a lot from it really quickly. We do talk a little bit about diligence, capital investments, sort of in the middle of the interview and I just wanted to say that if you’re someone who’s interested in investing in laundromats on the passive side of things, go check out diligence capital investments dot com the link to that’s in the show notes was that a lot of my resource accounts

00;02;00;07 – 00;02;26;09
Jordan
are show 99 or if you’re on YouTube, that’ll be all. The links that we talk about today will be down in the description down below as well. So go check that out. If you’re looking to get on the passive side of things, if you want to invest with Ross and I and Michael Ambrose, if you want to invest with us and peek over our shoulders, as you know, as we’re doing deals, man, you know, go check that out.

00;02;26;10 – 00;02;48;13
Jordan
Get on our email as we’re getting ready to do our first round of fund raising. Okay. So that’s that. I really quickly want to shout out a brand new pro perk from prime capital, Chris Money. Chris Mihalic, who’s been on the podcast a couple times, you guys probably know him and love him lot of you guys have already connected with him.

00;02;48;21 – 00;03;10;10
Jordan
He’s offering a pro pert for the pro community at long term resource, and he’s going to waive the documents fee for our pro community, which has a value of about 500 bucks. So that’s an awesome pro perk. Again, another property that we’ve added that exceeds the value of the investment of joining the pro community along with everything else in there.

00;03;10;19 – 00;03;30;14
Jordan
So man, the perks just keep adding up. I love it. Hopefully you guys, if you’re if you’re in the industry, you’re serious about the industry, go check out a lot of my resource dot com slash pro because there is a lot of great stuff that comes with that pro community including many discount, like I said, each of which individually exceeds the value of the investment.

00;03;30;14 – 00;04;02;18
Jordan
So if you plan on utilizing any of them, just join the pro community and enjoy all the perks along with the discounts. Okay, so huge. Welcome to Pride Capital on the partnership. They’re super excited to have Chris Mihalic on board. And in fact, if you’re going to be a clean show, which I am, Ross is a lot of you guys are, if you’re going to be a clean show 2020 to come hang out with me on August 1st at 11 a.m. Eastern time, I’m going to be at the prime capital booth just hanging out, talking laundromats might go live or something, I don’t know.

00;04;02;18 – 00;04;25;24
Jordan
Do something fun. But come, come, hang out. Come say hi. Prime Capital Booth, August 1st at 11 a.m. in the prime Capitol booth. Please, Joe. Okay, real quick, I want to do a fast line. I went back and looked at the fast lane. I want to do a fast lane for us real quick. And Fast Lane is how to utilize Laundromat resource to help you achieve your goals.

00;04;25;24 – 00;04;48;25
Jordan
And my fast lane tip is easy. Go check out diligence capital investments. If you’re looking for passive investing in laundromat, you want to participate in the cash flow, but you don’t want to manage a business. You want to manage people. This is an awesome opportunity to do that. Okay, check that out. Diligence capital investments dot com. Let’s jump into it with Russ Dodds.

00;04;48;25 – 00;05;02;19
Jordan
Talk about how in the world he got up to 13 laundromats plus a large pick up and delivery business here in Los Angeles. Let’s jump in with Russ. Russ Dodds, how are you doing today?

00;05;02;28 – 00;05;04;26
Ross
Super. How are you, Jordan?

00;05;04;26 – 00;05;23;05
Jordan
I cannot be more excited because I think this is going to be episode 99 of the podcast and we’re back in episode nine, I think is when you are so from 9 to 99. We are here with an update on you. Everything going on with you.

00;05;23;16 – 00;05;26;04
Ross
And I’m just shy of 99. Laundry is too. I mean.

00;05;26;04 – 00;05;55;05
Jordan
I know you’ve almost gotten one per podcast episode done, which is it’s impressive and and I actually think that, you know, you’re going to overtake it at some point in time and I hope to be a part of that through diligence, which we’ll talk about here in a little bit. Yeah, but. Okay. So last time we talked, I mean, literally, I did not know you until and I don’t think I’d even talk to you until we hit record on the podcast.

00;05;55;05 – 00;06;18;27
Jordan
And I think I just had my jaw open the entire episode because you talked about how and give a listen to episode nine of the podcast. I’m going to link to it. Go, go listen to it because his story is crazy but you know just for the highlights you but a lot of laundromat burned down almost immediately and it took you two years to basically get back on the horse, right?

00;06;19;07 – 00;06;19;16
Ross
Yeah.

00;06;19;28 – 00;06;44;17
Jordan
And and now you’ve got a little empire that’s really turn it into a medium empire here. Yeah. And soon to be a large empire I think so. I would love for you to just tell us a little bit of your story and how you got started up until today.

00;06;45;14 – 00;07;20;18
Ross
Yeah. So the first one we acquire in December 2014, it burned down. Five days later that one reopened with our second one that we acquired at the same time, January 1st, 2017. So I really say my laundry experience outside of construction started in January 2017. I had when I was on the podcast last time, I think we were at four with our private pickup and delivery facility.

00;07;20;18 – 00;07;56;00
Ross
And then three laundromats. As of last week we were at ten and as of this morning we’re basically approaching 13. It took over some management and we’ll be acquiring those here shortly as a 13, including a new 8700 square foot facility that we’re getting ready to move our pickup and delivery. And we are watching L.A. out here. And so that has just grown exponentially.

00;07;56;00 – 00;08;09;12
Ross
And we’ve outgrown our facility that we’re in. So we’re we’re basically five folding the size of that facility for this new one and hope to have that online before the end of the year.

00;08;09;29 – 00;08;34;19
Jordan
That’s insanity. Insanity. And you know, I want to dig into because I get asked all the time, like, how do you go from owning 1 to 3 laundromats to ten? I mean, now you’re getting them in bunches. I mean, going from 10 to 13, basically plus plus grow in your pickup and delivery, you know, I mean, I think people want to know how how you did that.

00;08;34;19 – 00;08;38;27
Jordan
How how in the world do you scale like that and relatively quickly?

00;08;40;05 – 00;09;16;08
Ross
I mean, from from the standpoint of finding them, a lot of them find me I’m obviously on on Facebook groups and I’m I’m very open book within the community here and outside that I like this business. I want to share the business as there anything I’ve learned in the business and and grow more and so a lot of our partners whether that be our equipment maintenance people or our equipment sales reps know I’m looking for more.

00;09;16;08 – 00;09;46;00
Ross
And when they hear something, they reach out to me, hey, are you interested in this? And my partnerships with the banks has really helped put projects in front of us and then from the finance side of it, I mean, good relationships that the bank has helped, but there’s no doubt I have an acceptance for higher risk and we’ve certainly taken on risk growing that sense.

00;09;47;03 – 00;10;16;08
Ross
I mean we’ve been fortunate enough to be able to 100% finance several projects, but at the end of the day, there’s there’s no way to quite get 100% with with things that come up during construction delays, etc.. So we will take on debt anywhere we need to if that ends project makes sense and right now that that is working for us.

00;10;17;15 – 00;10;55;05
Jordan
Yeah. I mean yeah those are you guys listening to it. The 100% financing was in air quotes because you know, stuff does come up and there are expenses that, you know, need to be paid. So and we’ll talk about that. And in fact, here in a little bit, I know so many of you guys reach out to me all the time and it’s like, you got to do some deal deep dives and you know how much money people are putting into deals and you know how much you know they’re spending on, you know, all the various things and in Ross’s agreed we’re going to do a deep dove on on a deal here and a

00;10;55;05 – 00;11;19;23
Jordan
little bit but I want to talk about what is it what does it take? I mean you say that you’re you’re willing to take on a little more risk than normal. But what does it take to get from the three laundromats that you had to the 13 that you’re you kind of have now and are about to sort of take over those last three?

00;11;20;03 – 00;11;34;19
Jordan
Like what what would it take for somebody to move up the line like that? You know, whether they go as quickly as you or not. But what does it take to start acquiring these anonymous I mean, you mentioned finding the deals.

00;11;34;19 – 00;11;35;03
Ross
Which.

00;11;35;28 – 00;11;37;14
Jordan
Is a big deal right now. Yeah.

00;11;37;22 – 00;12;08;04
Ross
Yeah, finding deals is definitely a big obstacle, especially in some of the markets. I see people looking to expand and and they just can’t find anything. And I we definitely focus more on the rundown. I love the project part of it. My husband Russell left his job in 2020 and is in the business full time now and he handles a lot of the construction and management of construction now.

00;12;08;04 – 00;12;35;17
Ross
So that helps. And last year we brought on a project manager or not project manager, sorry, operations manager to handle all of our staffing and stuff. So definitely getting more organized. So I have more time away from some of the day to day grind stuff that was causing me such headaches. So to be able to focus on projects and find them.

00;12;35;17 – 00;13;24;16
Ross
But outside of that, I mean, I think keeping clean books, we’ve had challenges with that where we’re fixing a lot of stuff right now, even for this next set of projects, for doing clean books, is very important in being up to date so that you can show that to the banks, the landlords, to make those process as go faster and hopefully open up more buying power or borrowing power, they should say with that and I’m a crazy credit person, so I will find new business credit card programs that wants and I will open them left and right.

00;13;26;04 – 00;13;45;00
Jordan
Well, it’s funny, because as you mentioned that I’m going to I want to give you a chance to shout one out here, because you’re always posting on Facebook. And I don’t know if it’s on your personal stuff or on the on the Laundromat pages or not, but or groups or both. But I mean, you know, do you have a favorite credit.

00;13;45;00 – 00;14;09;29
Ross
Card express by far? I mean, mainly because you get into their charge card stuff and it will grow with you and with your business. I wouldn’t be able to I mean, I have I have some great credit lines with other banks, but I mean, for an example, right now, as of this moment today, I think I’m around 90,000 with American Express.

00;14;10;12 – 00;14;43;01
Ross
I can’t do that on any other credit card cards. And I couldn’t do that even a year ago with American Express. But they watch your payments and in and out payments and charges and your limit just goes like this, that internal non-existing limit kind of thing. So that’s given me and given us a lot of leeway to to float projects in between funding the financing and stuff like that that we wouldn’t be able to do otherwise.

00;14;44;09 – 00;15;04;20
Jordan
Yeah, well, do me a favor. And after this, shoot me a link to your favorite credit card. I’m going to put that in the show notes. If you’re on YouTube, it’ll be down below. Because, I mean, it is it is a tool right now. I was actually having this conversation with my wife the other day because she gets, you know, about like her credit score and credit and all that stuff.

00;15;04;20 – 00;15;28;27
Jordan
And she’s like, oh, like I’m down from 800 to 790 or whatever. And I’m like, it doesn’t matter. And I’m like, It’s kind of a waste to have it that high because it means, you know, it’s a tool, right? It’s a tool for you to use and you got to use it wisely, right? And you already said, hey, you’re you’re willing to take on a little more risk, which might mean using a credit card to float some expenses until funding comes through or whatever the case may be.

00;15;28;27 – 00;15;51;03
Jordan
Right. But it’s a tool. Right. And having those tools in the in your in your basket to use, especially if you’re in high growth mode where you’re looking for opportunities, you got to be able to move quickly on things to take take advantage of opportunities. Right. And so having those tools in your tool belt can be a huge purchase.

00;15;51;03 – 00;15;54;11
Jordan
If you’re looking for a card, the link will be down below.

00;15;54;17 – 00;16;22;06
Ross
Or really we are drills that you need a 70, 80 plus credit score and then we don’t apply for anything because we’re told that will take our score. I mean, your history is worth more than your score as thick by a long accounts, good standing. And I think most people would be shocked at how much I’ve obtained and I’ve never had above a 730 credit score.

00;16;22;18 – 00;16;49;13
Ross
I mean, I’m actually pretty low when you look at the grand scheme of 850 being your best psycho score. But it just they’re looking at more than that. And again, back to why I like it, because it’s so much on their own internal scoring there. They’re watching what you’re doing with their card that they don’t necessarily care so much about what your score is.

00;16;49;28 – 00;17;12;20
Jordan
So interesting. Okay. So I want to go back a little bit again. I’ll put the link down below if you’re interested in a card and highly recommended from the Ross Dodds, I want to go back just a little bit because I mean, you kind of casually mentioned oh yeah, you know, we brought on, you know, Russell to oversee construction.

00;17;12;20 – 00;17;42;20
Jordan
We brought on an operations manager, yadda, yadda, yadda. And I’m like, wow. Like, okay, cool. But like, how, like, how did you know when the time was for your business to bring these people on? Because these are things that yeah, these are roles that most Laundromat owners don’t have on their payroll. Right. So how did you know when the time was right to start bringing these these roles on board onto your team?

00;17;43;09 – 00;18;23;06
Ross
I think we were actually very late. We were kind of delaying some of it for our growth. And then all of a sudden when we passed about number six, it wasn’t possible to ignore it anymore. It was impossible for Russell and I to do it by ourselves. And I mean, I was fortunate enough that two years ago or a year and a half ago to go and hang out with one of the friends, went to the laundromat Millionaire Conference, Dave Men’s and him and Carla talked extensively about building the team.

00;18;24;00 – 00;18;55;15
Ross
So we did some catch up in the last year and we’re still catching up really. Once we brought on the operation manager, I mean, we’ve gone through our existing team and I would say got the wrong people off the bus and started loading new people on the bus. That where we’re back focused on, on the direction that we had kind of started with, with customer service and being part of the community and a betterment of the community.

00;18;55;15 – 00;19;30;11
Ross
So we’ve been working really, really hard on that in the last year. And and that is and like I said, I think we should have started earlier, but figuring out when I think strategically is is planning out the next one, three and five, and I couldn’t have told you five years ago that I would be here. So that made that was probably a mistake to not think of a little further out than I was thinking.

00;19;31;23 – 00;19;55;27
Ross
So now I’m trying to go back and and with our new team in place now starting to project out what we’re doing and, and pre hire before we need it so we can grow into it instead of playing catch up. Because it’s kind of unfair to hire somebody and just be like, Here, you’re three years too late.

00;19;55;27 – 00;20;22;17
Jordan
Yeah, exactly. Because I think I mean, I think that actually is a really interesting point that you can hire somebody to fix it or you can hire somebody to build it. Right. And I mean, listen, that’s a that’s a difficult jump to make. Right. And I think you say that you hired too late, but and it sounds like capacity was your trigger point, right?

00;20;22;17 – 00;20;50;09
Jordan
Like you just had no more capacity. You were working too much and Russell was working too much and there’s just no more capacity. And so you kind of force your hand to bring people on right. And but, you know, there’s there’s different ways to run any business, this business in particular, any business. I was just listening to a podcast episode with Brandon Turner, who was from Bigger Pockets, and he says there’s kind of like.

00;20;50;09 – 00;20;51;06
Ross
Four.

00;20;51;21 – 00;21;17;16
Jordan
Phases, four mindsets. It sounds like you’re jumping up to that fourth mindset and that this is not none of these are good or bad. They’re just different ways of approaching business. There’s the the DIY is what he said. There’s the project manager, then there’s the DIY project manager, CEO who’s just kind of overseeing all that. And then there’s the architect, right?

00;21;17;16 – 00;21;53;00
Jordan
The person whose job it is. Go find the deals, put deals together, get funding, all that stuff. Like you’re the architect thinking up, what could this business be? And having your sort of CEOs, your project managers and your in your employees implement your vision. Right. And I thought that was a really interesting way of thinking about it. And one of the points he made was we feel like we have to work our way from one from DIY and work our way up.

00;21;53;00 – 00;22;16;09
Jordan
Right. And he said, You don’t have to do that, right? You can you can build the business you want to build. But I think it’s it’s difficult to do if you’ve never done it before. And I think that that’s why, you know, what you were mentioning. So I don’t mean to talk about trying to talk too much, but that’s why when you were mentioning, hey, you went to go see the will of four brothers, which I was super bummed out to miss that trip with you.

00;22;17;06 – 00;22;38;13
Jordan
And you know a lot about Millionaire Conference, which I was at with you and, you know, and, and one thing that you’re really good at is reaching out to other people. And, you know, Rick Rome, who, you know, you do wash club with who’s got a ton of great experience. And, you know, one thing you’re really great at is surrounding yourself with people who are where you want to be.

00;22;38;13 – 00;22;45;09
Jordan
And it can help you shortcut those, you know, those learning curves kind of along the way.

00;22;45;16 – 00;23;27;08
Ross
Yeah, absolutely. I’ve been I’ve been very fortunate that people that have given me time and I think I think sometimes when we’re first starting out, we’re afraid to ask for somebody’s time. But a lot of people are really willing to give it to you, and especially if you don’t waste it. But I mean, I think when I started I started as an employee and and I realized pretty early on and had had somebody on the clay board with me at the time.

00;23;27;08 – 00;23;54;02
Ross
Actually, when we started Clay boards for four different regions and he said, You’ve got to stop being an employee and get out of your business and be the owner. And that was kind of my first wake up call and first big move away from actually working hours in any of the laundries without somebody else there being the only employee there.

00;23;54;09 – 00;24;21;15
Ross
Instead, I started being at the laundries as the owner and it changed the business drastically then. And so when we jumped forward and had more, it was kind of revisiting that same mindset again that I need to step back. I’m getting lost in the day to day stuff and it’s it’s starting to hinder, hinder us, even though it kind of look like we were still moving very fast in a lot of ways.

00;24;21;15 – 00;24;41;28
Ross
We were I was I was floundering in the back. And so we’ve been correcting that and that will affect us. And Dave Mens and all those people and your podcast that that has been really where I get lots of my answers.

00;24;43;09 – 00;25;08;14
Jordan
Yeah. And, and I think that that is because it’s such a hard thing right. It’s such a hard I think the, the mindset thing is overlooked a lot. Right? Or it’s minimized, but it really is like a mindset thing. I mean there’s difficult decisions to make and you got to figure out when to bring somebody on and you got to figure out who to bring on and you got to pivot when there’s problems going on.

00;25;08;14 – 00;25;33;20
Jordan
And, you know, all that stuff is you got to figure that stuff out along the way, right? But that mindset shift of, you know, I got to do it all myself or nobody’s going to do it as well as I can or all that stuff, that’s difficult. But if your goal is to scale, you’ve got to make that mindset shift because like you said, you know, you might be moving forward, but you’d be like a duck, right?

00;25;33;20 – 00;25;39;19
Jordan
Who’s moving forward on the water? But underneath the water, your feet are going a thousand miles an hour and eventually you’re going to get exhausted.

00;25;39;19 – 00;26;11;10
Ross
And I think we were building the business for people to come to, but we weren’t building the process and the people to support the business that we were creating. And so we we seem to have figured out the building, the business part. Now we’re going back and going, wow, we had this idea of building a laundromat that is community driven and, and and employees, great people.

00;26;11;18 – 00;26;27;08
Ross
But then we don’t even have the support staff for all of those great people that we have working for us and and the community that’s coming now because they like it too. So that’s what we’re implementing now.

00;26;27;08 – 00;26;53;11
Jordan
Yeah, that I was just fiercely around down. I thought that was a genius quote like you’re building the business for people to come to, but not the systems and processes which I want to ask you about here in a second. I mean, if you if you were to give someone advice who wants to scale up their business, maybe they have one or two, or maybe they’re just ambitious and they are trying to buy their first one.

00;26;53;11 – 00;27;09;17
Jordan
But their goal is, hey, I want to have five, ten, 50. I get people in like consulting calls. We’re like, Yeah, I want to have 100 laundromats. And I’m like, That’s awesome. Let’s get you 1/1, right? Yeah, let’s get you one and see if you even like it. Yeah. And then, you know, we’ll work our way to 100.

00;27;09;17 – 00;27;18;17
Jordan
But you know what advice you have for somebody who’s looking to scale from where they’re at?

00;27;18;22 – 00;27;49;15
Ross
I mean, I think you definitely have to hire people to start doing a job that they might be doing three jobs in the beginning with the goal to get 2 to 1. But they’re doing three because you’re not big enough yet for them to only be on one. But they’re learning those three jobs. Then they’ll be able to hire in the two people as you grow instead of you going back.

00;27;50;00 – 00;28;15;06
Ross
Well, I’m going back now and trying to put in people way back in the beginning that should have been there. But we skipped them to to have more equity for not equity, but have more cash flow to put into deals. So, I mean, it managed to work out for us that we’ve been able to grow and and sustain.

00;28;15;16 – 00;28;39;23
Ross
But I think we we had a we had a project where we cut some corners to save some money and and I look at pieces of that laundry now and I don’t like it. And I nobody’s ever said anything. I don’t think anybody else would notice. But I know I know where we cut. And so we stopped doing it on the very next project.

00;28;40;25 – 00;28;57;10
Ross
And so I’ve learned those lessons. Some of them have been costly, some of them have just been cosmetics. So we’re kind of going through all of that in a rapid pace, I guess you could say.

00;28;58;03 – 00;29;27;27
Jordan
Yeah, yeah. And I mean, in not this is not a corner cutting or anything, but I know you’ve tried a lot of different software solutions and a lot of different. Yeah, you know, just like technology to help you run your businesses like how not necessarily looking for like best brand name or anything on here, but like how, how do you go about making the decision on what system you’re going to set up to use for your businesses?

00;29;28;08 – 00;29;52;25
Ross
I think, again, it goes back to are you planning on just running the one or is your goal five or ten? But I think we get in our heads that we can’t possibly spend that much money now. It’s like it’s like social media or advertising it. What’s the first thing people cut in in in a downturn of the economy?

00;29;52;26 – 00;30;18;28
Ross
Is it social media and advertising? And it’s like that should be what you should be ramping up when when the economy is starting to go down. And so I actually I typically am able to keep my mind out of chasing, stepping over dollars to pick up pennies, I think is the saying. But but sometimes it’s hard when you’re looking at 5000 or 15,000 to buy something.

00;30;18;28 – 00;30;52;11
Ross
You’re going, I can replace it three times. How bad can it be? But guess what then? When you have to oversee the project three times to have it replaced, you have to start putting a number on your time. And my time was more available when it was two and three locations. At ten locations, I don’t have time to meet somebody for fixing a facet, something silly, like a faucet at every laundry.

00;30;52;22 – 00;31;17;09
Ross
And in a day. I can’t go to ten laundries in one day. So we’ve started to look at everything down to our soap dispensers, our paper towel dispensers, the brand of soap that’s going in them. It has to be able to be ordered in quantity. I have to be able to have it shipped to me and it needs to be the same throughout.

00;31;17;12 – 00;31;46;12
Ross
I mean, the keys are like the biggest thing in laundromats and and we’re working on replacing the locks now so that we have to one for all employees, one for management, for all laundromats. It seems so simple, but when you’re ten in now, instead of replacing four locks for replacing a 100 box, it just becomes a much bigger project and later to try to implement them earlier.

00;31;46;12 – 00;32;29;08
Ross
So I think I’m missed some of that. We brought on an answering service last year. Gosh, now I can’t even imagine why I waited to spend the $500. It’s just incredible to get a text or an email. I choose that for what the issue is because we’re an all card store. So a lot of issues I can solve in 2 minutes if I just get a text versus somebody calling me, not explaining it because they have to answer the answering service and and then I’m able to just text them and be like, oh, $10 back on your card.

00;32;29;08 – 00;32;40;17
Ross
And they’re like, Oh, then they’re not even angry. But if they reach you on the phone, it’s like the world is crumbling. So little stuff like that has been a game changer for us.

00;32;41;16 – 00;33;07;25
Jordan
Yeah, well, I mean, that’s not I mean, it’s little stuff, but it’s not little stuff, right? It’s game changer stuff because. Yeah, I, you know, I listen for my, my laundromats. I have spent I don’t know how much time talking to people because of just silly things like, oh, hey, you have to actually close the door all the way before the washer is going to start.

00;33;07;26 – 00;33;23;14
Jordan
Or you can’t put like you can’t put that much soap in. Like the only way there’s that much soap in the washer is if you put that much soap in the washer. So, you know, just don’t put that much hope in next time. And they’re mad at me and the machines obviously don’t work, you know, all that stuff, right?

00;33;23;14 – 00;33;41;11
Jordan
But gosh, man, that’s got to be like 80% or more of my headaches. Right? Is that. And so having an answer or having a filtering service is really what it is, right? That can pacify people and give you a quick way to solve that problem. That’s huge, right?

00;33;41;11 – 00;34;05;27
Ross
I mean, we we we are very clear. We have the phone numbers up on the wall. We have business cards at the door. So we we don’t hide out at the mine tech desk. But the flip side is that human nature is people react before they take a step back and look at things a lot of times. So you’ll get a call like my my dryer’s missing.

00;34;05;27 – 00;34;34;10
Ross
And then before I can even answer the answering service text message, there’s a follow up saying, Oh, it was in a different dryer like that. So now having an answering service that’s taken that 2 minutes away where the person then is waiting for the phone call and they’re looking around and then they realize what actually happened. So they solve it themselves instead when they used to just reach me directly.

00;34;34;28 – 00;34;39;04
Ross
Now we’re on the phone together, both panicking and. And it doesn’t solve it.

00;34;39;27 – 00;34;55;03
Jordan
Yeah, I mean, and I remember a while back hanging out with you at times and you’re like, Oh, I got to take this car, I got to take this. And it was like all the time. And I’m like, Man, I don’t know if I want any more laundromats. I deal with enough of it with you. You know, it’s like, holy crap.

00;34;55;26 – 00;35;24;08
Ross
And we’ve been working on empowering the, the team members to do things themselves. I mean, I think Luke said recently on their podcast, like, nobody is ever going to get in trouble for giving somebody five or ten bucks on their laundry card or starting a washer dryer. That’s hard for some of our team members from where they’ve come from.

00;35;24;20 – 00;35;58;19
Ross
That that that it’s not actually giving away $10. It’s creating probably a lifetime customer and it’s giving away one washer that’s not $10. So we’ve really had to try to educate and train our team to that because that’s the biggest thing, too. People want to feel heard. And at the end of the day, if they’re calling us for a dry I hope that changed their day, it’s not going to affect us.

00;35;58;22 – 00;36;20;15
Ross
So why argue with them? Why create a scene for everybody else to be looking at? Because then other customers don’t know what necessarily is happening. So they don’t see that somebody is conning you. They see your team member screaming at somebody. You just don’t want to yell at people. So we want to eliminate that as much as possible.

00;36;20;15 – 00;36;25;20
Ross
And if that’s true, I do not care about you.

00;36;25;20 – 00;36;49;17
Jordan
Want to eliminate your employees yelling at people’s materials? Where’s the fun? So I legit pulled up to my laundromat one time and one of my employees was out front like screaming at a customer. And I was like, What? What’s going on here? Like, what’s the deal? And basically somebody was trying to con us for a wash, but it was like $3.

00;36;49;17 – 00;37;00;29
Jordan
And I was like, Hey, I was like, Go take a breath, you know? And I mean that was the end of that employee. But, you know, go take a breath. I’ll handle this. And I was like, look, here’s three bucks. Don’t come back.

00;37;02;14 – 00;37;05;05
Ross
End up on some online.

00;37;05;14 – 00;37;06;22
Jordan
Yeah, yeah, yeah.

00;37;07;07 – 00;37;08;19
Ross
I laundry owner.

00;37;08;27 – 00;37;45;07
Jordan
Yeah, exactly. Exactly. Yeah. Okay I mean, we’re kind of already into this. We’re talking about this already, but and you already mentioned it. But like what, what other categories of systems are are you working on putting in place? I mean, you have the answering service. You know, you’re you’re working on empowering your employees. You’ve got you’ve got a hierarchical system, basically, where you’ve got an operations manager, you’ve got Russell overseeing construction, you’re looking for deals and working on the financing and all that stuff and overseeing kind of everything.

00;37;46;11 – 00;38;01;25
Jordan
What, what are the kind of categories of systems do we laundromat owners who want to scale up our businesses? What do we need to be looking at and what categories of systems do we need to start developing of vending?

00;38;01;25 – 00;38;28;17
Ross
I think you have to choose very early on. Rather, you want to own it or or send it out to somebody else and do a process split or something. We own all of ours. I used to think it was my fun little once a month project where I would go check out what I could get at Costco or the Jetro and and switch up products and see which one sold.

00;38;28;17 – 00;38;51;19
Ross
And now I’m like, No, what’s my like six products that are going in here and how do I buy a pallet of it? Like, I can’t even I can’t even make a run in the van anymore. So we’re we’re looking to have a vending route manager here. It’s not going to be full time yet, but that’s going to be a two or three day a week.

00;38;52;25 – 00;39;19;07
Ross
And then we we’ve had a collection manager and thank goodness we are all card, but our first couple of stores were hybrid until until COVID and then we eliminated Bitcoin altogether. So only coin. Now when we first take over something until we switch it. But with ten stores even, that is an entire day thing. So I have a collection manager.

00;39;19;28 – 00;39;47;07
Ross
So the collection manager will now start working with the vending manager because they’ll be on off days so he can collect and say what’s needed for supplies at the store. And then the vending manager can come in and deliver those. Point of sale is really big. We’ve got some great new options and some options that have just been growing over the years since I’ve been in.

00;39;47;07 – 00;40;04;05
Ross
Brian built out his own system and continues to just add great things to that. I see all the time. I don’t use it myself, but I do follow it. And he’s done some great stuff.

00;40;04;12 – 00;40;05;18
Jordan
It’s was trifold, right?

00;40;05;24 – 00;40;07;01
Ross
Yes. Thank you. Yeah.

00;40;07;12 – 00;40;14;05
Jordan
I’m going to I’m going to link to all these things that you’re talking about just in case if you want to check them out. But Brian does an awesome job of less stressful. Okay.

00;40;14;18 – 00;40;40;22
Ross
And I mean, I think it’s also important to to look at other people that are in the industry because they know firsthand some of the stuff that either you’re experiencing or you can probably expect to experience as you grow. So I think there’s a lot of great options. I always say meet with people rather that be zoom or phone or if you’re local or able to travel to them.

00;40;41;04 – 00;41;03;04
Ross
It goes a long way to be able to make sure you work with that person really well. I mean, same with pickup and delivery software. I just work really well with Brown. We can tell each other to f off and it’s totally fine. You can’t do that and a lot of is just stuff. So that’s been an excellent partnership.

00;41;03;17 – 00;41;08;13
Jordan
That’s Wash Club track in case anybody wants to check them out. Rick Rubin does an awesome job with that.

00;41;08;28 – 00;41;43;12
Ross
And so that’s been very important to us of who have managed to partner up with Michael Ambrose. I met him through Western State Design, his sales Dexter here in Southern California, but he’s now our business partner and diligence capital, which we’ll talk about. So again, just growing the relationship over the years and what it’s becoming and where where I’m looking for it to go in the future.

00;41;43;12 – 00;41;43;24
Ross
Yeah.

00;41;45;17 – 00;42;06;19
Jordan
Yeah. And I mean, I would throw in, you know, in terms of the systems, I mean, you’re you’re doing a pretty good job of that deal flow system to, you know, kind of on the bigger sort of that architect level scale is that deal flow. And if you look in the scale, it doesn’t do you any good to want ten, 20, 50 laundromats if you can’t find them.

00;42;06;19 – 00;42;20;16
Jordan
And right now especially, I mean, laundromats are tough to find. And, you know, even us who you know, between you, me, Ambrose, you know, we’re pretty well connected and we still have difficulty finding finding deals right now.

00;42;20;16 – 00;42;49;27
Ross
So it takes time and you have to be willing to walk away. We’ve already had one that we had to walk away from. I have four, as many as I’ve acquired. We’ve lost away from just as many the land. Your lease is the most important. I mean, there’s lots of information out there on free laundromats there possible get ready to to invest on the back end.

00;42;50;01 – 00;43;22;15
Ross
Nothing is free. But here in Southern California, free is harder to come by. I would say it still exists, but I also find sometimes it’s just easier to pay a little bit. Some of mine I probably could have acquired free or much cheaper if I had waited, but I might have had to lose out on it and wait for it to come back on because it didn’t work out for somebody else that was trying to buy it or who knows.

00;43;22;15 – 00;43;45;28
Ross
So I sometimes put a price on time and how quickly I want it to move forward. I mean, our new facility, we’ve been looking for a facility for a year and then found this one and I negotiated that in two emails. I mean, he started you just never know sometimes. So that’s that’s important.

00;43;46;16 – 00;43;56;19
Jordan
Yeah. Well, I mean, and just in contrast, I mean, one of the deals that we ended up walking away from with diligence, we were going back and forth trying to work out a lease deal for.

00;43;57;11 – 00;43;59;05
Ross
Blake once it was announced.

00;43;59;07 – 00;44;11;19
Jordan
Yeah, like I don’t know, like, it was crazy. And then eventually we were just like, I, yeah, I don’t think that’s going to happen. So yeah, I mean, the lease is a big is a big deal.

00;44;11;19 – 00;44;25;04
Ross
Yeah. You can’t, you can’t pick up your, your laundry machines and, and go somewhere else. It’s it’s not like the you’re taking your toys on the playground somewhere out. So it’s you have to have a long lease for them.

00;44;25;14 – 00;44;52;13
Jordan
Yeah, you do. You do. You got all that infrastructure in place real quick about I mean, we’re still talking scaling here. How are you or how is your team? It sounds like your team maybe is doing this now, but how is your team? Well, okay. Let me back up real quick, because I want to talk about your your top tier team, your operations manager, your collections manager, you know.

00;44;52;13 – 00;45;09;18
Jordan
Well, not so much, Russell, because we know how you found Russell, but but you know the rest of your team. I want to talk to you about how you’re finding people who can play those roles. And then I want to jump down a tier and figure out how you’re finding people and how you’re training those people. So let’s let’s start up hire.

00;45;09;28 – 00;45;17;09
Jordan
How are you finding people who can run the you know, the run your operations? Who can run our collection?

00;45;18;00 – 00;45;55;27
Ross
Our collection manager actually was a friend that we had met in a previous business, and he just saw how much I was handling on my own and was kind of like, what if I did this? And it kind of started and it’s been a couple of different roles over the years, but with his other aspects of life and, and our business and the collections has ended up being a perfect role for, for him.

00;45;56;15 – 00;46;23;11
Ross
And it’s somebody I trust, which was the, the biggest thing I didn’t let it go for the longest time is you’re giving somebody all access. And yeah, the systems track it, but it also takes time to to double check all of those systems. So I only want to look if every once in a while to sure things are right, not not every day or watch what you collect on a camera.

00;46;24;19 – 00;47;12;19
Ross
So that worked out that way. Our operations manager actually was a longtime friend and came from hiring and training for a a a corporate restaurant. So it was a perfect fit and we had been working on it for a while. He was very concerned about coming in, being a friend into business. So we we kind of put in place a lot of contracts and contingencies around the contract to try to protect all of us in, in that way to to provide some safety in the beginning, if we all wanted to walk away, we don’t want there to be hard feelings.

00;47;13;15 – 00;47;44;22
Ross
And, and it’s been working out fantastic. We couldn’t be happier. I hope he’s happy. He’s in Hawaii right now on his vacation. So I’m holding down the fort this week without him. But that can be challenging. Hiring people, you know, are other people like our shift managers that we have brought on recently as shift managers we’ve promoted from within.

00;47;46;02 – 00;48;16;23
Ross
So that’s been great to be able to do that for both us and them. It’s what we hoped as we built this, that we would have a career path for those interested hiring is is never not going to be probably one of the biggest challenges of the business. I mean, since I started wages went from minimum wage at $9 and we were paying like 1050.

00;48;16;23 – 00;48;59;23
Ross
We were so far ahead and it was wonderful. And now July 1st, Los Angeles just went to 1602 and we start at 17 for our basic and go up from there. But just in five years, five years, six years and 9 to 17 is a is a big, big jump for a company. And thank goodness I’ve kind of been leader since the beginning, but I’m not going to lie even as price leader, I’m behind with these latest jumps.

00;49;00;07 – 00;49;34;03
Ross
So that’s a challenge for us. We do. We’re hiring a lot through indeed and not indeed the other one, Zappos or I think. Yeah. Been having some good luck with where we’ve had to start paying for ads to hire people we never used to. But it is helping us bring in a little bit higher tier candidate, I guess I could say.

00;49;34;03 – 00;49;49;06
Ross
I hate saying something like that, but it’s been challenging. We used to be able to just put up a sign in the window or something. I don’t find that helpful anymore. So we’ve gone online.

00;49;49;06 – 00;50;14;01
Jordan
Yeah, I mean, I think that’s been a challenge across the board, not just in L.A., but, you know, across the country and not just in our industry, but kind of across the board for everybody. And of course, California and L.A. in particular does not make running a business easy typically. So I feel your pain there. What about training when you when you do onboard people?

00;50;14;01 – 00;50;22;24
Jordan
Do you I mean, do you provide a manual for them or do you just have somebody who’s walking them through and and training them? How do you how do you get through one of these?

00;50;23;02 – 00;51;10;23
Ross
That’s another one of the things that we’re catching up to now. Fernando, is our operations manager. He is building out a video online source for training, but currently, we we typically do 3 to 4 what we call test shifts and just bring people in to work with our our senior staff or our shift leads and get on the ropes and and also have the opportunity because some people think they’ll love it or think that particularly in our Laundromat locations, that they some will come in like as an attendant and they’re like, I have time to do my homework.

00;51;10;25 – 00;51;31;28
Ross
This is my side job. Close the store. I can kind of hang out and then clothes and make sure everything’s good. And, you know, we’re busy doing class and folding our stores so it doesn’t end up being a good fit. So we find the test shifts work out because it gives people the opportunity to come in and work for 4 hours and and and collect cash for those 4 hours.

00;51;31;28 – 00;51;53;27
Ross
And we don’t have to go through the paperwork or payroll. And then they say at the end of the shift, jeez, this isn’t what I thought would be. Thanks for the opportunity. So that works out for both of us that way to kind of do that. But we are working on building out kind of the manual and video of of what’s expected that they’ll go through.

00;51;53;27 – 00;52;02;06
Ross
But there’s still two test shifts with our leads to get to a core of what’s happening.

00;52;04;00 – 00;52;13;25
Jordan
Yeah, I mean I like the test shift, I like idea. And in that model, I think it’ll be interesting when you finish out the.

00;52;14;14 – 00;52;15;00
Ross
Uh.

00;52;15;12 – 00;52;40;24
Jordan
You can shot the video course and and see how that kind of plays out with the new people. And I’m sure that there’ll be some, you know, fiddling around with that too, as you go along and because that’s just kind of how it goes. But that’s one of the one of the things I really love about you and how you operate your business is you just kind of go and then you kind of change, right?

00;52;40;25 – 00;52;47;25
Jordan
Like when you need the change, you’re like, This is way too much of a headache. I’m just going to go all car or you know, this is too much of a headache.

00;52;47;25 – 00;53;11;15
Ross
I’m just we just cover all of our payroll and I am leaning towards switching it again. And some of my boss that has been with team members like our leads are like really we have do onboarding again. And I was like, you don’t understand how much it is for us to do it, but it, it’s got to fit.

00;53;12;03 – 00;53;37;08
Ross
And, and I have accepted when I make a mistake that it has to be fixed. I can’t ignore it because the problem will only grow. So I try to to especially with software, I try to use them as much as I can before, during the switch so that I don’t do a whole company wide. And then it doesn’t work.

00;53;38;01 – 00;53;59;04
Ross
But where we’re close to, kind of going back in the direction that we were on for a little while, and then I just put the brakes on it and did something else and I probably shouldn’t have done that. But so, you know, you’ll see more, I’m sure, on the Facebook when I finally make the switch and have the right partnership.

00;53;59;04 – 00;54;00;24
Ross
So yeah.

00;54;01;15 – 00;54;23;05
Jordan
Yeah. Well, and I want to talk about Facebook here in a second to because I think I mean, you run what I would I would consider it to be the best Facebook group on their laundromat specific. So we’ll chat about that in a second. But real quick, any who’s who’s running watch club for you watch club L.A., how are you doing that still or what’s that looking like?

00;54;23;11 – 00;54;27;27
Ross
Well, we have a separate call center watch club than we do for the laundromats.

00;54;27;27 – 00;54;33;08
Jordan
Just for clarity. That’s the pickup and delivery service. Just everybody’s on board. Okay, I got that.

00;54;34;25 – 00;55;06;06
Ross
I mean, our watch club team is as large as our team for all nine of our other laundromats. So it’s it’s a big business. It it does take most of my time. But like I said, when we brought on Fernando as operations manager as quickly as possible, he was kind of hiring surf blades. So we started the whole shift thing at last club and now have been rolling it out.

00;55;06;06 – 00;55;57;05
Ross
So Laundromats where needed and now are our smaller operations that down to five and fold will start having one shift that probably oversees three or four locations. And so that’s in the process right now. But so we have the answering service and we pay for a little bit higher level on the answering service. So if it’s new customer, they will actually place the order on the phone with the answering service, existing staff gets text over and so now the shift leads are starting to take that’s scheduling is is still all done by Fernando we’ll see in the future some of the chef stuff might might take that but they’re starting to handle supplies and some

00;55;57;05 – 00;56;18;15
Ross
of that a lot of that is still coming over to me. We’re trying to centralize more of that to the store and which accounts they’re able to just order on their own versus need need my approval for. So we’re still working on that structure. But yeah.

00;56;18;15 – 00;56;30;25
Jordan
Well, what’s your what’s your plan with what I mean, are you obviously moving to a new facility? It’s significantly larger. Are you planning to really ramp up, wash Club? Because here’s why I ask the questions, because I am in your Facebook.

00;56;30;25 – 00;56;31;04
Ross
Group.

00;56;31;24 – 00;56;38;04
Jordan
And I don’t know if you’re able to keep any vehicles. B Yes.

00;56;38;04 – 00;56;49;24
Ross
Yes, I have another banded total. Oh, gosh. Like a month or so ago, I just picked up a nice pretty a Honda Odyssey. Vans are not with the black one.

00;56;49;24 – 00;56;50;07
Jordan
I saw.

00;56;50;07 – 00;56;51;07
Ross
It yeah.

00;56;51;08 – 00;56;53;20
Jordan
It’s got some tricked out rims and stuff they.

00;56;55;15 – 00;57;03;16
Ross
To so I, I mean everybody jokes that I should be buying tanks for. Right right. Right.

00;57;04;08 – 00;57;11;01
Jordan
I don’t I don’t think people are joking that I mean, maybe that’s a problem that you think we’re joking, but we’re not.

00;57;12;11 – 00;57;37;14
Ross
75% of the time. That’s not even my drivers. But yeah, L.A. is. It’s it’s crazy. I mean, knock on wood, I, I haven’t really crashed for my own cars. So I also think of that sometimes, but I don’t drive as many routes and, and, and miles every day as our vans. So it’s just kind of one of those things.

00;57;37;14 – 00;57;52;03
Ross
They’re on the road a lot. There’s a lot more chance for something to happen. It’s unfortunate. My auto insurance is $23,000 a year now, and I mean that. It’s mind boggling to me. It hurts.

00;57;52;09 – 00;57;59;29
Jordan
Seems like a bargain compared to all the damage. I’m just being straight up with you. If I was your insurance agent.

00;58;00;08 – 00;58;14;12
Ross
Oh, that’s a new one, I would be the buyer and finally gave up after that. So yeah, I marched in my calendar. When I can go back to state farms, we don’t have anymore.

00;58;14;12 – 00;58;28;29
Jordan
Yeah, yeah, yeah. They’re like, yeah, I calls in a year. Future action for like a two year. Yeah, yeah. So yeah one of those calendars that yeah yeah out like no accidents since the start of our.

00;58;31;21 – 00;59;00;07
Ross
But yeah so that there’s definitely a lot of challenges I probably have the most frustrations around our pickup and delivery. There’s no doubt about it. Our pickup and delivery also was probably the slowest growing out of all of our companies. I mean, and in huge part because I continue to acquire challenges on the side, I just always kind of lap watch them grow as it would grow.

00;59;00;07 – 00;59;33;01
Ross
And slowly but surely it was kind of doubling in the background over and over again. And until finally it was like, Hey, I’m big for you just to kind of run a slide. So we’re yes, we are. We are expanding and we want to grow it. We’re in Los Angeles, where it’s already a very large business, but it’s probably a 16th of what it could be based on like.

00;59;33;11 – 00;59;35;09
Jordan
Unlimited growth here potential.

00;59;35;15 – 01;00;10;24
Ross
Yeah. So we want to expand more into I mean, are we kind of specializing in not going after the huge Santos stuff, but we want to get into more of the boutique stuff where we’re higher and our prices are higher. And I mean our residential were to 49 a pound now with 38, 49 or 42, 99. I was just answering that the other day on Facebook minimum, depending where where they are in our route per order.

01;00;11;12 – 01;00;41;09
Ross
So we’re definitely not I think we’re the most expensive in L.A. and that’s the the market we want to stay in and grow within that. So it brings different challenges too, because if you’re going to be the expensive one, then people want the service that matches that. So we’re just trying to maintain that consistency and implement the processes to make sure that happens.

01;00;42;22 – 01;01;09;10
Jordan
Yeah, well, I mean you’ve mentioned now both with Wash Club Track or your Wash Club and with your your self-serve laundry is that you basically are the price leader. Can you talk a little bit about why you’re the price leader? And I mean, is that something you recommend for I mean, obviously, everybody can be the price leader, but I mean, you know, like you recommend being at the top end of that.

01;01;09;10 – 01;01;36;13
Jordan
And if so, you know why? Because I think, you know, kind of going back in history in our industry, that has not been the philosophy of the majority of laundromats. Right. It’s like a race to the bottom. Don’t don’t invest a bunch into your laundromat and run it as cheaply as possible. And, you know, don’t worry about being the price leader, but you’ve chosen to go the opposite way.

01;01;36;13 – 01;01;51;14
Jordan
And and I would not say it’s extreme, but I think a lot of people might say it’s you’re you’re on the extreme end. I in fact, I think you just posted like a day or ago or something a customer who was basically saying that, like you’re charging way too much for all this stuff.

01;01;51;14 – 01;01;52;16
Ross
It’s been good myself.

01;01;53;01 – 01;02;03;01
Jordan
Yeah. And right. And so, I mean, can you talk a little bit about why you decided to go high priced leader and if you recommend people going that route?

01;02;03;05 – 01;02;23;10
Ross
I think when it started, when we bought the first laundromat, I mean, one of the things that I kept looking at when I was going to all these laundromats while I was looking to purchase the first one is they were all also they they were dingy as the lights were turned off. There was no air. There was no there was no nothing.

01;02;23;11 – 01;02;52;13
Ross
It was just like you have to do laundry. So this is your place that you go to do laundry and deal with it. And nobody was really getting into technology. I mean, shoot the apartment buildings that they’re building now, don’t do coins. But yet when I started there, barely any laundromats, there weren’t any in my neighborhood or around me that took anything but coins.

01;02;52;13 – 01;03;18;15
Ross
And and we’re just not in that world anymore. I kind of always argue with people, you’re never going to get rid of money. I’m never going to say that. And don’t don’t say I’m insinuating you’re going to get rid of cash. But the fact is, when people are only going to collect quarters because they need to do laundry or wash their car, what does that say about the industry?

01;03;18;15 – 01;03;26;18
Ross
I mean, you’re not going to the grocery store with quarters. You’re not going out to dinner with quarters. Why is it that I do.

01;03;26;29 – 01;03;28;09
Jordan
But I’m just.

01;03;28;09 – 01;03;32;06
Ross
Kidding. Would you like a roll or would you like that?

01;03;33;17 – 01;03;36;10
Jordan
And unroll them just because we.

01;03;36;10 – 01;04;03;04
Ross
Just want it? That was one of my very early goals was why does it have to be so dreadful to go to? And in part in doing that and putting in the court’s countertops, that just required our price to be higher because it costs us a lot more to build it. But we very early on and so when we go into a new neighborhood, we certainly have pushback from.

01;04;03;04 – 01;04;29;13
Ross
Some people and I, I was I do take it personal, but I’ve learned also that the loudest people are usually your it’s twofold either either you have your best customer that tells you everything that’s wrong and everything that’s good all at the same time. Or you have your worst customer that never stops complaining. So so you have to learn who to listen to.

01;04;30;05 – 01;04;58;17
Ross
And at the end of the day, my customers created my business, but they don’t own my business. So I had to go a route. I had to choose how it was going to be, and then I had to work on educating why the prices were the way they were and what they were getting. And most of the time over the years when we’ve done increases, you might hear somebody say, I’m going somewhere else.

01;04;58;17 – 01;05;19;19
Ross
And I guarantee you two or three weeks later you see them again. I mean, we were one of the first lounges to do full cycle dry. You would find it’s the customer that’s looking for the top loader. We don’t have top loaders in any of our laundromats except when we first take them over and I rush to get them out of the store.

01;05;20;16 – 01;05;39;03
Ross
I don’t care unless you tell me that top loader is four or $5. I don’t care what customers say. They will love the front load once they use them. It cleans so much better. Same with the full cycle dry. The customer that says they’re not going to use your laundry just because of the full cycle dry is not your customer.

01;05;39;08 – 01;06;15;15
Ross
If they’re focusing on $0.50, I’m focusing on a on my lady that’s coming in doing £500 for six family members like I don’t I just can’t be focused on the loudest complainer so and that kind of carried into when we started doing fluff and fold we we get our logo reusable tote bags. I’ve been with green garments since I opened.

01;06;16;04 – 01;06;44;27
Ross
There’s definitely cheaper options. I love my relationship with them, so I continue to use them to this day. And so we we put everything into a plastic bag and then it goes inside the green garment and it gets a sticker on it. It gets a name tag. We do luggage tags. So those are reusable too. And it’s just a different presentation and that costs more to do the presentation.

01;06;44;27 – 01;07;01;20
Ross
Some people don’t care. We have some customers that will never bring a bag back and we’re obviously not going to give them one every single time they come. But for the most part, people appreciate it and so they keep bringing it back and we’re able to keep reusing it. But it just at its end of presentation.

01;07;03;06 – 01;07;10;27
Jordan
I mean, I love that. So do you recommend that everybody should be at the top end of of pricing?

01;07;10;27 – 01;07;46;27
Ross
I think you have to decide what you want. But keep in mind, I would never want to be the low price leader and I think the challenge is, is people get held into their own personal feelings of that. Something is expensive. So then they say, my community will not pay that or my neighborhood won’t accept that. Well, maybe it isn’t currently offered, and that’s why they don’t accept it.

01;07;46;27 – 01;08;04;21
Ross
And people will say that about card system. The guy down the street put in the card system, he took it out because everybody revolts and didn’t come. Who did? Did he do the washers and dryers? I just posted where my mother in law was in the laundry, and she did her credit card at a washer and got to the dryer in its headquarters only.

01;08;05;09 – 01;08;33;13
Ross
Well, you have a card system. It’s going to fail. What the cook sees the card and now she has no cash and no quarters. What’s she doing for the dry? She has to go somewhere to go get quarters or go to an ATM to get money. You just that would infuriate me. It infuriated her. Text me. I mean, like it’s just you have to think a consumer and also think of how train a consumer the consumers are trainable.

01;08;34;07 – 01;08;56;20
Ross
I mean, what what did we pay for gas when we were 16? We seem to accept gas prices continuously raising as much as we complain about them. We’re still paying them. It’s the same with groceries. Laundry, everything. You just have to work with the customer and show them that there’s another reason above and beyond the price to focus on.

01;08;56;24 – 01;09;04;09
Ross
And so that’s what we tried to do. I think a lot of people see me complain otherwise, but it’s just my vent. Venting.

01;09;04;09 – 01;09;12;14
Jordan
Yeah, venting. Sad fact that, you know, I like those old guys are like when I was your age, gas used to cost me a nickel.

01;09;12;24 – 01;09;13;03
Ross
Yeah.

01;09;13;11 – 01;09;20;19
Jordan
This is how I know I’m an old guy, because when I was in high school, I used to pay $0.89 a gallon for gas, which is crazy.

01;09;20;19 – 01;09;22;29
Ross
I mean, I remember my 95 cent.

01;09;22;29 – 01;09;47;03
Jordan
Yes, yes, man, I’m getting old. Awesome. Oh, and you know some this I’m not sure. I mean I, I am sure I would not I would not state this as 100% my opinion and definitely not fact. But I kind of almost think you need to be the high priced leader or the low price leader, and the people who get killed are the ones in the middle.

01;09;47;07 – 01;09;51;28
Jordan
Right. You either go the Nordstrom route or you go the Wal Mart route.

01;09;52;10 – 01;09;52;14
Ross
Yeah.

01;09;52;17 – 01;10;12;10
Jordan
And if you go in the middle, you’re you might get run over, right? But if you go the low route, your margins are going to be lower obviously, and you got to have the volume to be able to to do it. Now, you know, at that point, I mean, I think you’re dealing with two different demographics of people by and large.

01;10;12;10 – 01;10;33;29
Jordan
Right? And so, yeah, there’s pluses and minuses to both. But I’m not sure that I’ve made up my mind on that, but that’s kind of where I lean and I think, you know, don’t don’t live in the middle because that is no man’s land. Go provide excellent service, as you know, as gets thrown around our industry a lot, provide value.

01;10;34;07 – 01;10;55;19
Jordan
I think you’ve given a lot of really great practical examples of what value looks like and and charge for it or, you know, cut the costs and and, you know, pass the savings on to the customer like Wal-Mart does. Right. Do your tough negotiations and, you know, and and give them a low price.

01;10;55;19 – 01;11;30;22
Ross
And we’re in a lot different neighborhoods throughout Los Angeles, Hawthorne, South L.A., which would probably in the past be considered some of the worst parts of town. It’s not that way anymore. But I mean, we’re not in the same demographic in all of our laundromats. When we take over a laundromat, we are certainly not the highest priced or or sometimes the lowest price or already on that high end for no reason.

01;11;31;11 – 01;11;58;09
Ross
So it’s not saying that it can’t be changed. We we change every neighborhood we go into, and that means that some people are going to find somewhere else to go. There’s no doubt about it that I will lose some of the existing customers when I take over a space. But that is just going to be what happens because we remodel them, we retool them, the prices can not stay.

01;11;58;09 – 01;12;21;01
Ross
I didn’t get the laundromat because it was doing good because I don’t typically buy laundromats that are doing good. I mean, if you buy one that’s doing good, then maybe you don’t have to be so drastic. But we’re buying rundown or buying foreclosures. That didn’t happen because it was running great and the prices are right regardless of what ten out of 50 customers tell you.

01;12;21;26 – 01;12;48;02
Ross
So like the ones we’re taking over right now, they do a half price day. That’s going to end very, very soon. And I and this store is already on a card system I see in that one day. They do as much for the month than they do the other six days. So Yeah, we’re going to lose some customers when we cut that away.

01;12;48;02 – 01;12;59;03
Ross
People have circled their calendar, their life around that day, but it’s it’s not the business that we run and it’s not going to fit our model moving forward. Yeah.

01;13;00;25 – 01;13;22;15
Jordan
I love that. Okay. I want to jump into the deal deep dove in a minute. But before we jump into that, I mean, I want to just take a second because I mean, we’ve kind of alluded to this already a couple of different times, but you and myself and Mike Lambros, who was a guest on the podcast, all link to his episode to is a great episode.

01;13;22;15 – 01;13;46;07
Jordan
In fact, I should write that down. So don’t forget, um, so we, we kind of got together and started an investment fund diligence, capital investments where we’re going out to buy laundromats and commercial real estate and partnering with, you know, some of you guys who are listening accredited investors to go out and and find deals and and to scale that way.

01;13;46;07 – 01;14;10;28
Jordan
So that’s another sort of avenue that you’re using to scale your business. Just wanted to kind of bring that up and ask you a couple of questions about diligence, capital investments and what what you think, uh, the how, how diligence kind of fits in with what you’re doing and what you think the future of diligence is, is going to be.

01;14;10;28 – 01;14;25;09
Jordan
And one of the reasons and that I’m strategically asking that is because we’re getting ready to raise a round of funding to go out and take down some deals. So Let’s talk a little bit about diligence, capital investments.

01;14;25;29 – 01;15;12;09
Ross
I think it serves a lot of a lot of people’s interests from the standpoint that deals can be hard to find. And it does take relationships sometimes to find those. And the three of us have some great relationships that we’ve been working on for years. And and not only have I been doing a lot of these changes with Russell and now Fernando for our company, but it’s gearing up, getting ready to be able to manage other laundromats or other existing owners or or diligence capital to be able to plug and play.

01;15;12;09 – 01;15;34;00
Ross
And our process, our remodel, our construction, all of that right in place so that boundaries aren’t hands off as much as people want them to be, and you can build them to be. But the first year plus, you have to get the processes in place and and that takes a lot of time so.

01;15;34;04 – 01;15;35;20
Jordan
And the right people in place too.

01;15;35;20 – 01;15;55;14
Ross
Yeah. So I think as more people dig in to really wanting to own a laundromat, then they realize, I want to own a laundromat, but I don’t want to run a laundromat. So we kind of created this to solve that, that you can have a piece and and sit on the sidelines.

01;15;57;09 – 01;16;17;27
Jordan
Well, yeah. And I mean, for me, this fills a huge need, especially right now in this crazy environment where there’s so much uncertainty in the market, there’s, you know, real estate’s going it’s you know, nobody really knows what’s going to happen. And you prices have been going up like crazy and people are talking about maybe they’re going to come back down, but rents are still going.

01;16;17;27 – 01;16;48;06
Jordan
I mean, it’s just like insanity, right. And there’s so many investors out there who are looking for cash flow. And I say this all the time. Right. But laundromats, the average real estate deal cannot touch the average laundromat deal in terms of cash flow. And that is just it’s just a fact. And that’s partly a way a result of the way that real estate’s valued in the way that laundromats are.

01;16;48;06 – 01;17;24;05
Jordan
And because laundromats are a business, they’re valued a little bit differently, and that allows for room for that cash flow. And so I’ve been getting more, more and more requests for people who are interested in in partnering with people who, number one, have a lot of experience. Two can find deals and number three can allow them to invest and have that piece passively and even, you know, look over our shoulders as we’re doing those things, because maybe they do want to run their own laundromats or their own laundromat empire at some point.

01;17;24;23 – 01;17;41;14
Jordan
But they want to, you know, look at somebody who’s, you know, who’s gone through the things that you’ve gone through, who’s gone through the things that I’ve gone through and Michael’s gone through and all the the very difficult and expensive lessons that we’ve learned. Well, it’s a lot easier to look over our shoulders and learn those lessons.

01;17;41;20 – 01;18;08;18
Ross
And I mean, listen, none of it. I didn’t get into this industry going, geez, there’s a pandemic coming in the future. I understand that. That was a great happenstance, awful thing to happen. But Laundromats are now recognized, not state recognized as essential. And I think the other thing it did is shed the light on how laundromats were operated.

01;18;08;18 – 01;18;47;29
Ross
And for us, it set a light on a clean, bright space that felt safe, even in the middle of the pandemic. And frankly, that’s how we have expanded so much in the last two years, is because of the mismatch, honest or hands off people that were running and owning laundromats in the area during a pandemic, people stopped accepting the the closest laundromat because they had been going to it for years and started to want to actually feel safe in the middle of this pandemic.

01;18;47;29 – 01;18;58;23
Ross
So it sat a light on that we were doing something right before we even necessarily needed to.

01;18;59;25 – 01;19;34;15
Jordan
Yeah. And I think that that is huge. I mean, I think that, you know, and I get like obviously nobody’s, nobody’s happy about what happened with the pandemic and, and all of that. But what it did do was it, it illuminated this industry, I think, and the opportunity here. And in fact, something is interesting. I think maybe it’s starting to happen already that I just as I’m observing you know, I’m doing I do consulting calls all the time with people from all over the country and and beyond.

01;19;34;27 – 01;20;00;01
Jordan
And you know, as I’m meeting new owners and stuff, one of the things I think that’s interesting that’s happening is a lot of mats, I think, are on the precipice of hitting their prime and maybe I’m just biased but I genuinely think I see this you know I saw I watched over the last you know 510 years as self-storage kind of blew up car washes kind of blew up.

01;20;00;01 – 01;20;08;27
Jordan
And, you know, the real estate community in particular have really latched on to that self-storage side of things. Well, I think laundromats are in that same glory.

01;20;08;29 – 01;20;11;14
Ross
Or never sexy. And they’re getting sexy.

01;20;11;20 – 01;20;54;04
Jordan
They are getting sexy. And not only that, but they are they they haven’t taken off yet. Like that’s the that’s the thing, right? Like laundromats right now are like self-storage, like eight or ten years ago, right before it really blew up, I think. And so it’s a great time to kind of get involved, get your foot in the door and whether that’s something that you want to do passively and maybe, you know, partner with Ross and Michael and I diligence capital investments or or do it yourself like I think that there is opportunity right now to get into an industry that I think is about to blow up as I’m watching this as models change.

01;20;54;04 – 01;21;28;19
Ross
And you’ve done and you’ve done the podcasts on the franchises, there’s some good franchises that have popped up in the last several years. And so there is there I think we chose the direction of the funds because if you want to own it and run it, but want full on guidance, then a franchise might be a better direction for you were a different option to maybe come in and just be a partner instead of a full owner because of the amount of investment.

01;21;29;24 – 01;21;36;15
Ross
And so we’re excited to get going on this.

01;21;36;21 – 01;21;54;09
Jordan
Yeah. And so I mean, just, you know, not, not to make this into a sales pitch or anything, but if you’re interested in learning more about diligence, capital investments can check out diligence. Capital investments dot com. On that home page there, there’s a little form that you can fill out through your name and email address on there. You can get on our email list.

01;21;54;09 – 01;22;16;04
Jordan
And like I said, we are getting ready to do a raise and fundraise to go out and take down some deals that we’ve been kind eyeballing for a little while. And it’s very exciting, I think. I mean, to, you know, to see that coming down the pipeline and coming to fruition and just cool opportunity for for all of us, I think.

01;22;16;18 – 01;22;16;27
Ross
Yeah.

01;22;17;27 – 01;22;40;20
Jordan
Okay, let’s if if you don’t mind, can we just shift gears and go into a deal? I know we’ve gone through like a lot of stuff already, but I get people asking all the time, like, can you just do like a deep dove? And you said you’re willing to do that. So let’s talk about maybe a specific deal or just kind of in general like what deals look like.

01;22;40;20 – 01;23;05;09
Jordan
And I want to try to get as specific as we can in terms of, you know, well, let’s just talk about it like when a deal comes across your desk. I mean, we talked a little bit about how deals do come across your your desk, you know, on a maybe a typical deal or if you want to single out a specific deal, what what what kind of capital are you coming to the table with?

01;23;06;04 – 01;23;47;10
Ross
So my initial goal is zero and it never ends up being that way. And one of our locations that we recently in finally just got opened and I talked about plumbing issues and we will talk about the numbers related to that and the mistakes I made. But that particular deal was a a manufacturer stepping in to take back over because their loan wasn’t being handled and the owner had kind of just stepped with COVID and just stopped paying everybody.

01;23;48;04 – 01;24;14;28
Ross
So we came in, worked with the bank and worked with the landlord. So the landlord obviously hadn’t been getting paid, so they had a high interest and getting somebody new and experienced and so they gave some concessions to us and usually in, in the form of free rent periods, stuff like that. And the bank to start getting paid for the existing loan.

01;24;15;03 – 01;24;37;25
Ross
And, and also then in this case we needed to do a full remodel. So in the interest of us coming in and taking over the existing loan, they were willing to loan on the new equipment and also the remodel and tie.

01;24;38;26 – 01;24;41;04
Jordan
So we had a tenant improvement.

01;24;41;04 – 01;24;56;13
Ross
The way what that typically looks like is we get this new and that I think in this case it’s a 15 year lease with two five year options. So 25 years we had one year of rent abatement.

01;24;57;24 – 01;25;00;09
Jordan
And where you’re not paying rent for a year.

01;25;00;09 – 01;25;37;24
Ross
Right, yet. Yes. And then the bank we took over the existing loan with so six months, no payments and six months interest only payments on the existing loan which the existing loan was equipment that was only about five years old. Everything else in the store was awful. So they agreed finance the equipment that we wanted to purchase for the remainder of the store.

01;25;38;02 – 01;26;27;27
Ross
And then they also agreed to I believe in this case we were at 75,000 was our projected remodel that includes install of the store. On the downside, we’re in the middle of COVID, so it took nine months to get the equipment. So we just ran the store as it was for those nine months. And then where where it takes a turn that I’ve posted a little bit on Facebook that we just really have planned for, or we could have planned for a little bit or maybe is we didn’t ever run the the lines we knew we were taking over rundown.

01;26;28;05 – 01;26;47;20
Ross
We knew we were replacing equipment. We always plan on replacing plumbing from ground up and replacing electrical. We want shut offs on every washer. We want a watershed and electrical shall last at every washer or electrical service that every dryer. So we always plan to do that.

01;26;49;05 – 01;26;52;22
Jordan
You guys showed us that every dryer, by the way. I started doing that, too.

01;26;52;22 – 01;27;27;17
Ross
Yes. Yes. So gas that us intellectual shut offs that ever dryer. So what happened when we took out the row of washers when we were finally ready to start the remodel is we found a and basically the bases were six inches high and there was five inches of water in the base and underneath the washer just sitting. And so that’s started our kind of, oh, we’re going to have to take out a section of concrete.

01;27;27;17 – 01;28;08;26
Ross
And then when we took out the section of concrete, we found a leak in the main line, which is, I would say, more untypical than normal. I mean, usually the lines running to the main are bad, but so we had to run a new water line. And, and I know in other parts of the country, in this particular case, we were in a shopping plaza of three and we were at the ends and the water line came in on that side of the shopping plaza and went under the slab for the entire shopping plaza.

01;28;09;13 – 01;28;13;03
Ross
So we had to take a new line up. And those are the ways it.

01;28;13;03 – 01;28;14;26
Jordan
Was the water line, not the sewer line.

01;28;15;04 – 01;28;16;12
Ross
This is the water line.

01;28;17;06 – 01;28;19;08
Jordan
I mean, you don’t really scope a water line.

01;28;19;08 – 01;28;26;04
Ross
Normally, do you? Now, I don’t think. We could have really caught that one. We could have cut the sewer line issues we had.

01;28;26;16 – 01;28;40;25
Jordan
We always, by the way, always go for your sewer lines because you want to know. I’ve had multiple consulting calls of people who had a rude awakening within the first six months where they had to replace the sewer line. And you just don’t want to be in that position. So, yeah.

01;28;41;26 – 01;29;11;19
Ross
It’s shocking how orders actually can create a pile and a sewer line and end up blocking an line. And so, yeah, so in this case, we ended up having to take out the concrete in the entire store down the middle, which was never planned. And then also replacing the main water line, which is copper. And we know how much copper is right now.

01;29;12;09 – 01;29;40;08
Ross
And we said we’re going to do it in phases. So we didn’t have to close the laundry. We ended up having to close laundry for three months. And so all in all, concrete new water lines and stuff, we were over by 50 at least, and then that didn’t include our closures that weren’t planned for. And in this case, we paid our employee because that that wasn’t what they signed up for.

01;29;40;08 – 01;29;46;01
Ross
So we continued to pay all of that while being closed. So all and.

01;29;46;01 – 01;29;47;17
Jordan
Thank God for that Amex.

01;29;50;05 – 01;30;02;03
Ross
Has a point. So all in all, that project ended up being about 75 or so out of pocket and over budget.

01;30;02;14 – 01;30;03;06
Jordan
Aspect of the.

01;30;03;07 – 01;30;42;05
Ross
Project that was 100% financed. So when you start talking about this as a cash intensive business, not only as a cash intensive already, but then when there’s errors or or things that aren’t taught or planned for the sheer cost, especially now with materials, we couldn’t get some of our electrical materials. Oh, actually, no. I take that back. It’s not 75, it’s almost 100 over because the day before we went to open, our water tank blew.

01;30;43;01 – 01;30;53;26
Ross
So we ended. So we ended up replacing it with tankless and that kept us closed another week. I forgot about how did I forget that? Separate things out.

01;30;54;13 – 01;30;58;05
Jordan
At some point you just got to laugh? Like what? Like now.

01;30;58;06 – 01;31;12;17
Ross
Yeah. And so those are things that we’ve now penciled in that unless a boiler has been replaced in the last five years, it’s coming out or putting in tankless. I don’t care the cost, it just saves us.

01;31;12;17 – 01;31;19;02
Jordan
Keep that in mind. Tankless business is out there. Rust does not care the cost. Well we quotes.

01;31;19;05 – 01;31;43;22
Ross
Luckily we have some people we work with now, but I mean that was only cost more costly because we had to remove dryers to be able to get the tank out. And if we had done it during construction, we wouldn’t have had to pay for anything to be moved. We wouldn’t have had to pay for the contractors to then patch walls that were already complete.

01;31;43;22 – 01;31;52;08
Ross
So so that was one of those lessons that was one of those stepping over a dollars to pick up, pennies to not replace.

01;31;52;18 – 01;32;13;23
Jordan
Yeah. And let me throw that back to our conversation where, like, you don’t know what you don’t know. And so getting around people like you, like the will of firms like Dave Mans, like Rick Rome, like getting around people like this who’ve gone through it and who can say, hey, you know what, you’re your boilers, 12 years old, your mines.

01;32;13;23 – 01;32;25;21
Jordan
Well, if you’re replacing all this equipment, you might as well, though the boiler in there do tankless, you know, and you know and but you don’t know that. Right. And you didn’t know. And you do now.

01;32;26;14 – 01;32;57;04
Ross
You’re now know. So yeah. And I mean some of the other things we’re doing now is we have a different brand and swap cooler that we’re using when it works out size wise and and electric wise, we’re now starting put actual AC in, which is unheard of out here other people across the country like what are you talking about you cheapskate putting AC and you don’t see it in California for laundromats.

01;32;57;04 – 01;33;37;20
Ross
So that’s something where kind of being the first around to start doing is putting AC in instead of swamp coolers but it’s the price difference isn’t even close. Yeah, let me go. Well since we do courts and all the other laundromats now and so folding space is very important. Seating Is very important. Yeah. You don’t want people to hang out and you don’t want something that they can easily ruin, but you have to design and build it for your customer, not for the people that are going to steal from you.

01;33;39;07 – 01;34;02;22
Jordan
I like that. So when when you got hit with that 100 K of extra costs on your free laundromat, I mean, did you have that cash on hand? How did you how did you handle that unexpected expense? I think it’s a big fear of people. And, you know, a lot of a lot of people who are listening to this, a lot of people who I’ve done consulting with.

01;34;03;12 – 01;34;03;17
Ross
Are.

01;34;04;03 – 01;34;21;06
Jordan
Are trying to get into the business and don’t have a ton of extra capital. So that’s like, holy cow, that’s fear inducing. They’re already having trouble taking that first step because there’s already enough to fear, let alone getting $100,000 bills. So, I mean, how did you navigate those unexpected costs?

01;34;21;06 – 01;34;43;27
Ross
I mean, certainly when we were only doing one project at a time, we can cash flow from our our other locations and try to cover some of that. You can’t cover a hundred thousand to months. I mean, we’re not we’re not we’re not rolling like that. But yeah, I mean, we’ve over the years, I, we work with a lot of the same contractors now.

01;34;44;08 – 01;35;10;02
Ross
I’ve, I’ve asked them all to set up merchant accounts and I pay them with credit cards. It’s not ideal, but it, it has allowed us to grow. And then and then I can, I can pay back the credit cards and that allows me to do the next project. So am I. You apply for credit when you don’t need it.

01;35;10;02 – 01;35;36;03
Ross
I have lines of credit through half a dozen credit unions all around the city and across the country really apply anywhere I can get one and then. And then I’ll take on credit cards and and so and then we’ll we’ll pay it back when the project opens or when, when we get the remainder of our funding and kind of do that flow.

01;35;36;23 – 01;35;50;16
Ross
But that’s where we tend to be a little bit riskier in how fast growing is is I’m not afraid to use a credit card until we move on to the next project.

01;35;50;16 – 01;36;04;00
Jordan
Yeah. And I mean, I think that that’s a good point. And what’s the whole there’s like a joke about basically the banks will only give you money when you don’t need it, right? Like when you need money, that’s when the banks won’t lend to you because.

01;36;04;08 – 01;36;12;16
Ross
You’re not standing down. I ask for more and I open more. Yeah. Then borrow it and pay it back.

01;36;12;21 – 01;36;39;06
Jordan
That’s right. Oh, I’ve seen it. Oh, yeah. One other question. I mean, I think a lot of people will be interested in this. How did you become an owner that banks or manufacturers or distributor or whoever will come to with deals where, you know, owners were mismanage? And basically, how did you become the rescue go to rescue guy?

01;36;39;26 – 01;37;08;23
Ross
That’s with me constantly being out there saying, I want I want more. I will acquire more, I will take on the risk. I love the project. A lot of people don’t want to or don’t think they can cash flow a complete remodel. So they want to look at something done or or are afraid to get stuck in waiting for equipment for 12 months on a laundry that’s losing money.

01;37;09;20 – 01;37;33;10
Ross
There’s a whole list of reasons why this can be a challenging direction, but it’s it’s what we’ve found that we enjoy the most. And have done well with. So, yeah, we just put ourselves out there and people know.

01;37;34;00 – 01;37;52;26
Jordan
Yeah, I mean, you know what that’s a that’s a testament to two things I think to you is number one, I mean, you got in the game, right? And even, you know, like you said and way back in the beginning and last episode that you did episode nine, right, you got in the game five days later, the game slapped you upside the head and knock you out for two years.

01;37;52;26 – 01;38;11;20
Jordan
Right. And you got back in the game. Right. So, number one, you got to get in the game and and learn those hard lessons like that’s number two, right Like the only way you have the confidence to go in and take over a laundromat that’s not performing and say, okay, I’m going to, you know, 100 finance this thing.

01;38;12;00 – 01;38;27;10
Jordan
And then on top of that, I’m going to put some money on credit cards or lines of credit or whatever I have to do. If things come up until this thing becomes profitable. The only way that you know to do that is that you got in the game, you’ve learned the lessons, you’ve learned. You’ve got around the right people.

01;38;27;10 – 01;38;57;20
Jordan
You have the confidence now because you’ve done it. You have the confidence that says, okay, I can take this risk. You say you have a high risk tolerance, which is true. I mean, I know you pretty well like you do have a high risk tolerance. However, I think that risk tolerance needs to be adjusted. Right. It needs to be like, you know, the risk you’re taking from somebody new is significantly higher than the same exact risk that you’re taking for you.

01;38;57;28 – 01;39;24;12
Jordan
Right. Because of the knowledge and the experience and the team and the systems and on and on and on. Right. That you have developed over time, through going through everything you’ve been through. Right. And so risk adjusted, I think it’s not as risky as people might feel it is. And if you’re brand new looking to get in, maybe that’s not the route that you go because it is a cash intensive business and it is risky.

01;39;24;12 – 01;39;52;09
Jordan
Like if you go 100% financing and you take out $100,000 on a credit card and you don’t have the knowledge that you need to have to make sure that that thing is going to perform and it’s going to work for you. It’s a big risk and maybe you want to take it. Maybe you don’t. But when Ross does it because of this huge, huge mass of knowledge, experience team, etc., that we’ve been talking about this whole episode, it’s not as risky for you.

01;39;52;09 – 01;39;53;25
Jordan
I mean, would you agree with that? Is that.

01;39;54;08 – 01;40;20;10
Ross
Yes. Yeah. And I think that’s why we’ve been able to I mean, we some of our deals are cross collateralized within the same banks to to other deals that we have. But I think one of the reasons we’ve been able to do that with the bank is because they’ve also done other projects with us where they they know what we’re going to come in and do and how we’re going to change it.

01;40;20;10 – 01;40;53;10
Ross
We’re not going to just take it over and try to make it successful with the same equipment by painting it. We’re not going to do that. We’re going to drastically change it. And right now, with equipment delays, we’ve even gone so far, we spend nearly twice the amount of money because we’ll go in and do the signs, paint it and do the floors, etc., and then sit and wait for all the equipment for 9 to 12 months.

01;40;53;10 – 01;41;21;10
Ross
And then during the remodel and an and retooling, we have to redo the walls and redo the floors again. But part of that is getting the neighborhood that has been so used to what has been there to know something is going to happen and just bear with us. That’s going to take time right now because of all of the setbacks with everything else in the world.

01;41;22;05 – 01;42;02;13
Ross
So that’s what we’ve been doing now, been working for us. Yes. It’s it’s much more costly to to do floors that cost $8,000 and then you have to reseal them. We’ve got a project right now. We did the floors and we just ruined them. We don’t normally ruin them. That was another thing. But and also on money, utilities, utilities, I don’t know how they are in other parts of the country, but here in Los Angeles, they’re looking for five and eight times deposit of an average bill.

01;42;02;18 – 01;42;41;17
Ross
And they if don’t have good information from the previous owner, they will calculated themselves. I just had an electric or a water deposit. It was $18,000. What the heck. And you can’t really do anything with that. And this this laundry that we’re talking about, when we first took it over, thank goodness we went through escrow because, I called up the gas company and said, I’m then I just acquired this.

01;42;42;19 – 01;43;25;29
Ross
And they said, Great, you have an existing bill of $64,000. How would you like to pay back? And I was like, No, I don’t have anything to do with the previous owner. I don’t know whether it was missed training or power trip, but they somebody at the gas company labeled the account as that. It was blocked from being activated by anybody until the bill was paid and that my escrow said that I acquired all debt with the business, which was not true.

01;43;26;20 – 01;43;52;07
Ross
And luckily we were under a still under a no shutoffs in LA or else they would have shot us off and then we really would have been screwed. But we had to actually get a hold of the gas companies attorney, their counsel to send our escrow and say, excuse me. And that took a long time to reach the council.

01;43;52;07 – 01;44;16;18
Ross
But once we reached the council one day and they personally called me because it it was obviously a huge overstep and a huge mistake. But if I hadn’t of been through that before and known what could happen with escrow, I could have just balled up and put it on payment plans and and then I would have screwed myself out of $68,000.

01;44;16;28 – 01;44;30;14
Ross
I mean, there’s a lot of stuff that can come up that not all of it you cause and sometimes it’s getting around somebody that thinks they know something or has decided something and it’s not true. So.

01;44;31;01 – 01;44;57;01
Jordan
Yeah. And not a lawyer. Not legal advice, but asset purchase. Do an asset purchase. When you acquire, don’t do a stock purchase. Well, consult your attorney and your you know, your all that stuff. But in general, the way that I approach it at least is do that asset purchase community, do a stock purchase. You are assuming the debts, any liabilities, all that stuff.

01;44;57;01 – 01;45;04;00
Jordan
So I mean, just super important. And again, another great reason to have people who understand the business around.

01;45;04;25 – 01;45;37;06
Ross
You know, your brokers can be expensive. Not all brokers are created equal, but you get a good broker and they are worth all the money they charge. It’s like a consultant. You get a good consultant. I know. That’s why you started in your business. And I mean, it may cost upfront, but until you know it or until you can surround yourself with people pay somebody, it’s just so worth it.

01;45;37;11 – 01;46;08;27
Ross
I mean, we still pay a lot of different people for different things that yes, I can probably navigate most of them myself, but I still do escrow. We pay an escrow company to file everything for us. We don’t sell file. I use a broker probably 80% of the time. It just because I know what to look for now doesn’t mean that I want to take on what somebody else does every day, all the time.

01;46;09;13 – 01;46;11;20
Ross
So that’s what you pay them for?

01;46;11;20 – 01;46;39;29
Jordan
Yeah, absolutely. And I mean, this has been like chock full of such good stuff. I just want to say, first of all, thank you for coming on and sharing again, sharing your story. If you’re not in the in the Facebook group, I’m going to put a link to the Laundromat owners. Facebook that Ross runs. Again, my opinion best laundromat Facebook group out there at least not.

01;46;39;29 – 01;46;43;19
Ross
Already booked for a clean show. Just go and book it now.

01;46;44;10 – 01;46;53;20
Jordan
We’ll be we’ll be hanging out there come and and I’m pretty sure everybody that we’ve mentioned who were like you should probably know these people, all of them will be.

01;46;54;02 – 01;47;02;09
Ross
Going, yeah, and you can’t get the bonus points in time, but you can get an Amex before going Atlanta and meet your spend bonus.

01;47;02;25 – 01;47;37;11
Jordan
That’s right. And so that link will be down below as long as you send it over to me. And no but seriously. And and I just want to say to like, you know, if you’re a credit, an investor, you’re thinking about getting in, maybe you’re a little apprehensive about running it yourself or, you know, you you’re doing more valuable things with your time, but you do want to deploy some of that money for, you know, to to benefit from this business that think is a great business, not just in terms of return on investment, which I think is really great in that some of the tax breaks and all that stuff, that’s awesome.

01;47;37;25 – 01;48;10;08
Jordan
But genuinely, I love this business because laundromats are parts of community, right? The different communities and you know, people gather at laundromats, they’re they’re scattered and peppered throughout communities all over the country and all over the world, really And it is one of the few gathering points that people have left for people who use laundromats. And so I love the ability to come in and make an impact, do something positive for a community.

01;48;10;08 – 01;48;44;07
Jordan
You’re making huge impacts in communities by taking over laundromats that are, you know, just maybe not in the best shape. And you’re in you’re the extra mile to show them that there’s something different out there for them in terms of how they do their laundromat or their laundry. The experience doesn’t have to be a bad one. And so, you know, if that’s something you’re interested in, your credit investor diligence, capital investments dot com can benefit from, you know, the tiny bit of relatively tiny bit of experience and knowledge that I have accrued.

01;48;44;07 – 01;49;16;18
Jordan
And the more knowledge and experience that Mike Lambros has accrued and the mountain of experience, knowledge systems, all that stuff that that Ross has behind him and can be a part of something awesome. Because I think what what’s happening with diligence is, is awesome. And what’s happening with laundromats in the industry is awesome, right now so comes yes diligence capital investments dot com come see us at the clean show come see us on Ross’s Facebook group Laundromat Owners and.

01;49;16;18 – 01;49;22;21
Jordan
Ross, you first of all, why did we not do this in person together? We should. We’re not that far apart.

01;49;23;00 – 01;49;24;12
Ross
I don’t know if that’s all right.

01;49;24;12 – 01;49;27;00
Jordan
Next one episode 199.

01;49;27;22 – 01;49;30;19
Ross
Got the three of us, Michael, you and I.

01;49;30;19 – 01;49;33;06
Jordan
That’s right. We’ll do it all together in person or, you know, I’ll.

01;49;33;06 – 01;49;34;06
Ross
Bring Russell into.

01;49;34;09 – 01;49;41;24
Jordan
It. Yeah, yeah, absolutely well, somebody’s got a dog. Sit all your little tiny dogs, so maybe Fernando can do that for anybody.

01;49;41;24 – 01;49;43;20
Ross
Who wants to babysit while we’re in it. Yeah.

01;49;43;27 – 01;49;54;20
Jordan
Yeah, we’re looking for bond dogs that are volunteers. Matt, thanks again for coming on. This has been great. And any parting words for everybody now?

01;49;54;20 – 01;50;08;19
Ross
Just just in somewhere. Do it yourself. Invest in us. Look at somebody else to to invest with. But you get in. This is this is awesome industry and great people in it now.

01;50;09;04 – 01;50;12;07
Jordan
It is. And it’s a great time, I think, to be getting into this industry.

01;50;12;07 – 01;50;13;08
Ross
So. Yeah.

01;50;13;10 – 01;50;33;17
Jordan
All right, man, thanks again. And we’ll chat soon. All right. What a cool interview with Russ. Hopefully you pull a lot of stuff in there to help you in your business, whether you’re just getting started or you own one or multiple laundromats. There was something in there for everybody. So what I always say is pick one thing and put it into action this week.

01;50;33;17 – 01;50;54;05
Jordan
Take one thing from this interview and put it into action. There was a whole lot in there to choose from. But again, listening to these interviews, hearing how other people are succeeding, hearing how people are feeling and what they’re learning from it all that is great stuff. None of it leads you to accomplishing your goals until you start putting it into action.

01;50;54;05 – 01;51;09;19
Jordan
All right, so pick something put into action this week, maybe go shared on the forums. A lot of my resource accounts are forums, and with all that said, man, I’ll see you next week for episode 100 of Laundromat Resource Podcast.

01;51;09;25 – 01;51;42;12
Ross
All right. Piece.