Man Who Bought Laundromat off Craigslist is Now a Millionaire
Published Originally on Business Insider
Dave Menz was working at a telephone company when he decided to invest in his first laundromat in 2010.
In an interview with Insider, he broke down how buying one laundromat off Craigslist turned into a four-location million-dollar business.
See more stories on Insider’s business page.
Dave Menz is 44 years old and has a net worth of $1.9 million thanks to his investments in Ohio laundromats.
His story starts from humble beginnings. For the first decade-or-so of his life, Menz told Insider he lived in “pretty extreme poverty” in Flint, Michigan.
When Menz was around 11, his dad got a job as a computer programmer at a hospital in Cincinnati, Ohio, and moved the family there.
“We went from being pretty poor to probably lower middle class to maybe even middle class,” he said.
Menz went on to grow up in Cincinnati, and eventually, make his fortune there.
In an interview with Insider he explained how went from working a 9 to 5 to support his family to building a laundromat empire that grossed over $1 million in sales in 2019.
“When we got into the business, when we bought that first store, our net worth was roughly $50,000. Eleven years later, it’s close to $2 million,” he said.
The first laundromat
In 1995 at the age of 19, Menz took a job at a local telephone company called Cincinnati Bell. He spent 17 years there, starting off as a 411 operator and ending as a lineman.
Menz told Insider that he realized early on in his career that he wanted to be his own boss. To turn that dream into a reality, he knew he needed to buy something. So at 29, he and his wife, Carla, started to save up for an investment, unsure of exactly what type of business they wanted to own.
“For the next four or five years,” he explained, “we lived well below our means and saved a lot of money.”
In early 2010, the stars aligned and Queen City Laundry was born.
While browsing the internet, Menz saw a listing on Craigslist for a rundown laundromat in Amelia, Ohio, a suburb just two miles away from his home at the time and around 20 miles from Cincinnati. He had roughly $30,000 saved by that point, so using a small business loan and some cash, he bought the place for $85,000.
As soon he bought it, Menz used the savings to renovate it, which included things like painting, opening the floor plan, and adding a video surveillance system.
“The three main components to really any business, but especially a laundromat, are clean, safe, and bright,” he said.
A few months later, he took out an equipment loan to buy new washers and dryers.
Seven months after the purchase, the laundromat was bringing in around $14,000 a month. After expenses, Menz was profiting roughly $1,500, which he reinvested into business.
While the income wasn’t much, Menz told Insider that it was expected, and why he kept his full-time job. Not only did he have loans to pay back, but he also had to cover expenses like utilities (water, sewer, gas, and electric) and a monthly mortgage.
Growing the business
In late 2010, Menz came across a laundromat in a Cincinnati strip mall that had been abandoned by the lessee.
He told Insider that he knew the area well, and that a functioning laundromat there would be profitable because there was no competition.
“I knew I had a mess on my hands, but it was a great location,” he said.
The landlords were so eager to get the place up and running again, they offered Menz the lease for around $1,100 a month, which he explained was on the lower end. They also gave him a few thousand dollars to fix the place up and three months of free rent once it opened.
Because there weren’t many laundromats in the area, when the doors opened in January 2011, business took off.
“Within about three weeks it was profitable,” he said, and added that it was bringing in around $3,000 a month.
Chipping away at debt and quitting corporate
For the next two years, Menz and his wife continued to improve both laundromats and pay off the loans they took out to purchase and revamp them.
By early 2014, the businesses were bringing in a $7,000 monthly profit, collectively.
Not long after, Menz came across a third location, in Anderson Township, a small village around 12 miles from Cincinnati. While negotiating a deal with the owner of the laundromat, which is the only store in the building, he was presented with the opportunity to buy the building by the property owners.
“They wanted out. They did not want to own it,” he said.
So he bought the laundromat business for $75,000 and the building for $170,000.
Once the store was revamped, which was around 8 months later, it began profiting $3,000 to $4,000 a month.
Business boomed from there.
By the fall of 2014, Menz quit his job at Cincinnati Bell because the laundromats were bringing in around $8,000 to $9,000 a month in profit. Menz used the income to replace his roughly $70,000 salary and then reinvested the rest into the business.
It’s not just about acquiring more stores
Menz’s strategy isn’t all about growing his portfolio. He told Insider that a key factor to his success is the constant improvements he makes to the laundromats he already owned.
From 2015 to 2016, he focused on adding a wash, dry, and fold service to all three locations. While it cost time and money in the beginning to implement, it ended up creating another revenue stream.
In 2016, Menz bought a fourth laundromat for about $35,000. In that store, he started a pick-up and drop-off delivery service, called Happy Nest. There are currently has three trucks on the road that serve the entire greater Cincinnati area and northern Kentucky.
Today, Menz and his wife have a net worth of $1.9 million. In 2019, the four laundromats generated over $1 million in gross sales, and the pick-up and delivery business generated just under $462,000 in gross sales.
There are a total of 40 employees across all four locations, with 17 to 20 of them working for Happy Nest.
Last year, Menz and his family upgraded their living quarters to a six-bedroom home that stretches over 6,000 square feet in a neighborhood just 15 minutes from downtown Cincinnati. The move, Menz said, was a tribute to their found success.
Eager to share his expertise and passion for the laundromat industry, Menz also offers consulting and coaching for those eager to grow in the laundromat industry.
“I’m very passionate about anything I do,” he said. “During this entire evolution I’m telling you about, I’m digging and learning every little detail of the business.”
Seven months after the purchase, the laundromat was bringing in around $14,000 a month. After expenses, Menz was profiting roughly $1,500, which he reinvested into business.
While the income wasn’t much, Menz told Insider that it was expected, and why he kept his full-time job. Not only did he have loans to pay back, but he also had to cover expenses like utilities (water, sewer, gas, and electric) and a monthly mortgage.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.