Atusa Parsa bought a laundromat in Fullerton, Calif., three years ago. Social media had convinced her it was a great investment. She soon learned what the videos left out. There were drug dealers in the bathroom, and she had to get them out. She did it with help from the police.
John Keilman tells her story in Tuesday's Journal A-hed. The humble laundromat has become a TikTok star. The clips dwell on buckets of coins and piles of cash. The pitch is simple. Buy the machines, collect the money, go home. It's sold as passive income, and it sells well when the career ladder looks broken. Brian Wallace runs the Coin Laundry Association. In his view, some influencers leave out part of the story.
What the quarters don't show
Carlos Ochoa is credited with starting the trend five years ago, as a new owner in Visalia, Calif. In that early video, he told viewers his five-day gross was $1,419. It drew more than 1 million views. He now has 2 million TikTok followers. Even he worries about what viewers take from it. His store, which includes a wash-and-fold service, is far from passive, he says. People watch the glamour, he says, and they “forgo any other due diligence.”
Wallace gives the real numbers. About 30,000 laundromats operate in the U.S., and that count has stayed flat. A small one costs around $300,000. A large, high-performing one can go for up to $3 million. The average profit margin is 24%. Francis Dayamba bought his Chicago store three years ago. He keeps staff on site from 7 a.m. to 8:30 p.m. He's added a claw machine and an EV charger to make the payroll work. Sam Cohen left software to buy a store in Old Bridge, N.J. He hasn't broken even, mostly because of repairs he didn't see coming. Mark and Kathy Huntebrinker run a laundry service in St. Louis and film lint-screen cleanings. One of their clips has 24 million views. In a good month, the videos bring in $5,000. That's video money. The laundry didn't earn it. Mark bristles at the idea of “some magic business where you show up once a week and collect quarters.”
Our read
Our read, Cash Flow (M5). A business sold as passive income is a job with a lease. The $1,419 in that early video was gross, over five days, before rent, water, gas, repairs and the owner's own hours. Price any small business the way a lender would. Start from the net margin, and 24% is only the average, so plenty of stores earn less. Set a repair reserve aside before you count a dollar of profit. Cohen's surprise repairs are why his store still hasn't broken even. Then write down the staffed hours. Dayamba's day runs from 7 a.m. to 8:30 p.m. That's what passive looks like up close. Parsa says it was all worth it, and she's proud of what she built. The business is real. The easy part was the lie.
Here's where it touches your plan. If there's a line for a rental, a side business or a franchise you're weighing, pull it up this week. Next to the income number, write two more. One is the hours it takes each month, like Dayamba's staffed day. The other is the repair reserve, the bill that kept Cohen from breaking even. If those two are blank, that line is a wish. We'd rather fill them in with you before the first repair bill than after it.