The Most Overlooked $10K/M Business Anyone Can Start
The Koerner Office Podcast - Full Episodes
1,120,888 views • 2 months ago
Video Summary
It's possible to start a business with virtually no money by renting out used washers and dryers. The core strategy involves validating demand on platforms like Facebook Marketplace before making any purchases. This approach minimizes risk, allowing entrepreneurs to gauge interest by posting screenshots of items they don't yet own.
The process, dubbed "Post, Rent, Buy," focuses on identifying what people want and then acquiring it. This method has proven successful, with a 23-year-old generating $10,000 a month by renting out these appliances, working only 5 hours a week. The business model thrives on low overhead and consistent demand, especially for older, durable appliance models.
For those looking to scale faster, cultivating relationships with used appliance shops and securing bulk deals is key. Additionally, leveraging low-cost marketing tactics like door hangers in apartment complexes can significantly boost lead generation and business growth.
Short Highlights
- It's possible to start a rental business with $0 by validating demand through online listings before purchasing assets.
- The "Post, Rent, Buy" process involves listing items, securing a renter, and then acquiring the item.
- Used washers and dryers, particularly older durable models, are a profitable rental item with low acquisition costs.
- Scaling the business can involve bulk purchases from used appliance stores, strategic marketing with door hangers, and efficient customer acquisition.
- The business model has low overhead and can be scaled from a side hustle to a significant income stream, working in communities of various sizes.
Starting a Business with Zero Dollars [00:00]
- The possibility of starting a business with literally zero dollars is confirmed.
- The worst-case scenario is making money back, implying a zero-risk approach.
- This business model works anywhere there are people.
- There are many ways to acquire items for free.
Renting Out Washers and Dryers on Facebook Marketplace [00:11]
- A 23-year-old named Kyler makes $10,000 a month by renting out $50 washers and dryers on Facebook Marketplace.
- He has zero employees and works 5 hours a week.
- He follows a three-step process: Post, Rent, Buy.
Validating Ideas Before Purchasing [00:35]
- Kyler initially tested rental ideas by posting items he didn't own, such as excavators and chainsaws, using screenshots from Google.
- This was done to validate demand before investing in inventory.
- He experimented in areas like hot tub rentals and dump trailer rentals.
The Washer and Dryer Idea Genesis [01:51]
- Kyler posted a washer and dryer listing on Facebook Marketplace without a clear reason why.
- He used a screenshot from the internet for the listing.
- The key was that the photo looked "real" and not blurry to attract interest.
Facebook Marketplace Listing Strategy [02:28]
- There's a "secret sauce" to wording Facebook Marketplace posts.
- A washer and dryer was listed for rent at $50 for one month.
- The speaker emphasizes that the photo needs to look real.
- Blurry screenshots signal that the user doesn't own the item, deterring interest.
The First Washer and Dryer Rental [02:07]
- After listing a washer and dryer for rent, Kyler went on a cruise.
- Upon his return, he had about 30 messages about renting the washer and dryer.
- He had not yet purchased a washer and dryer at this point.
- The listing was for $50 per month.
Purchasing the First Washer and Dryer Sets [03:15]
- Kyler bought his first set from RC Willie, a store similar to Home Depot, after securing a renter.
- He purchased three sets that day, which were the most expensive he had bought up to that point, costing around $1,000 each ($450 for a washer, $450 for a dryer plus tax).
- He invested half of his life savings into this business within the first month.
First Installation and Unexpected Issues [05:41]
- Kyler's first installation was at a customer's apartment in Orem.
- It took about two hours to install due to a lack of experience.
- The dryer vent was completely full of lint, which he was unaware of.
- The dryer wouldn't work due to the lint buildup, leading to a fire hazard.
- He had to buy supplies to clean the dryer vent, unexpectedly entering the vent cleaning business.
- He created a simple, not legally binding, contract for the renter.
- The first payment of $60 was received on November 15, 2023.
Scaling the Business and Payment Processing [07:08]
- In the first 30 days, Kyler completed four to five installations.
- To scale, he decided he didn't want to manually remind people about payments.
- He researched payment processors and found Stripe to handle subscriptions and credit card processing.
- He also sought cheaper washers and dryers.
Sourcing Cheaper Appliances [07:35]
- Kyler called wholesale appliance places in Utah and posed as a property manager or builder needing a large quantity of sets (e.g., 100 sets).
- He didn't disclose his rental business to avoid potential price increases or skepticism.
- He secured quotes and paid $30,000 for his first batch of units.
Initial Growth and Revenue [08:29]
- In the first 30 days, Kyler and his brother completed around 35 installations.
- Customers paid between $60 to $85 per month for each set.
- This generated approximately $2,400 in monthly recurring revenue in the first two months.
The Unlock: Used Appliances [09:07]
- Kyler realized he didn't need to buy the newest, nicest machines.
- He discovered that used sets for the same rental price performed just as well as new ones.
- This was a significant unlock, making him question why he was buying new appliances.
Acquiring Free and Cheap Appliances [09:49]
- Used sets can range from $0 to $200.
- Free sets can be obtained by searching Facebook Marketplace for "free appliances" or "broken appliances."
- People often give away appliances when moving, upgrading, or when they break.
- Another method is to offer delivery services for used appliance stores, picking up old units in exchange for a fee or a working appliance.
Starting with Absolutely No Money [11:20]
- It is possible to start this business with literally zero dollars if one is patient.
- This involves consistently looking for free units on platforms like Facebook Marketplace, using alerts, or bots.
- An example is given of a barber who received a free washer and dryer and started renting them out for $60-$70 a month.
Scaling Faster with Used Appliance Shops [12:26]
- Kyler discovered the value of the used appliance market.
- He found a family running a used appliance shop and, posing as a property manager, negotiated a deal for bulk purchases with a two-year guarantee.
- This made the used units a zero-risk investment as they paid for themselves in 4-5 months.
Strategies for Sourcing Appliances [13:10]
- To go slow and cheap, look for free units or buy them affordably on Facebook Marketplace.
- To go fast, look for sellers listing multiple times a day and develop relationships to buy everything from them.
- These shops get appliances from sources like Costco, Lowe's, or Home Depot, where drivers sell them for a small profit ($15).
Appliance Delivery as a Side Hustruggle [14:29]
- Kyler's grandparents own apartment complexes, and he helped with maintenance from a young age, delivering and installing cheap washers and dryers.
- He placed an ad for "appliance delivery" and secured work from appliance shops that didn't handle deliveries themselves.
- He charges for deliveries, for example, $150 for a single washer, taking about 45 minutes.
Opportunities in Appliance Delivery [15:35]
- Mom-and-pop appliance shops often don't have their own delivery services and are happy to outsource it.
- At least half of these smaller shops don't do their own deliveries.
- There are approximately 15,000 mom-and-pop appliance shops, presenting a large opportunity for delivery services.
- The key to getting leads is having a good flyer and answering the phone promptly.
The "Ugly White Things": Durable Appliances [17:30]
- Kyler is passionate about Whirlpool direct drive washers and dryers, which stopped being made around 2013 due to efficiency regulations.
- These machines are built to last, comparable to high-end brands, but cost around $200.
- Parts are readily available and affordable (under $30).
- They are simple, easy to repair, and don't have suspension, making them stable.
- Kenmore appliances with similar designs are also often made by Whirlpool.
Pricing and Sourcing Durable Appliances [18:51]
- An average price for a used set is around $200.
- A good price is $100 for both, or $300 with a warranty.
- Kyler stores appliances in his grandparents' rental property garages.
- He finds a local collector who scraps washers and dryers, sending him pictures daily.
- Front-load models are typically sold for $200 quickly, while top-load models are refurbished or parted out.
- He bought a dryer for $25 that could fix approximately eight other dryers by using its parts.
Addressing Skepticism about Privileges [20:09]
- When faced with the idea that he benefits from his grandparents' resources, Kyler emphasizes using what's available and that his grandparents are not involved in his business operations.
- He notes that one can rent a storage unit for about $80 a month.
Transportation for the Business [20:40]
- Kyler uses a Toyota Highlander with 260,000 miles and a hitch.
- He has a trailer, valued at $500-$1,000, which can fit six machines.
- He notes that one can rent trucks from Home Depot for $25 a day or trailers from U-Haul.
- This setup can generate $320 a month in recurring revenue per trailer load.
Essential Tools and Marketing [22:18]
- The essential tools are a drill (Ryobi recommended) and a pair of channel locks.
- A marketing hack involves hanging door hangers in apartment complexes that don't provide washers and dryers.
- This method can generate three to four leads per complex.
- Kyler ordered 10,000 door hangers, estimating a 1-2% conversion rate, aiming to double his business from 10,000 to 20,000 sets.
Churn Rate and Business Scalability [23:52]
- The churn rate is very low, around 1.5%, with most customers renting for over a year.
- The business is not labor-intensive, with the ability to work as much or as little as desired.
- Another operator with 900 sets still only works two to three days a week.
The PRB Process: Post, Rent, Buy [27:57]
- Step 1: Post It: Create listings on Facebook Marketplace.
- Step 2: Rent It: Respond to inquiries and secure a renter.
- Step 3: Buy It: Acquire the appliance after renting it out, validating demand first.
- This process ensures zero risk.
Leveraging Multiple Facebook Profiles [28:25]
- Kyler uses multiple Facebook profiles to post in different locations and bypass algorithm limitations.
- He uses different email addresses and has never been banned.
- Paying $12 a month for a "badge" can help with customer support and unbanning if an account gets flagged.
Crafting a Facebook Marketplace Listing [29:32]
- Create a listing with photos of washers and dryers.
- Title examples: "Washer and dryer rental" or "Washer and dryer for rent."
- Price: $60 to $85 (listing the lowest at $50 initially).
- Description: "Never go to the laundry mat again. Rent a washer and dryer month-to-month. Free delivery, install and maintenance. Message me for more info."
- List in multiple relevant groups on Facebook.
Responding to Inquiries [31:22]
- Being responsive is crucial; reply within the same day.
- A typical inquiry asks about availability and monthly cost.
- Pre-written messages can be used for common questions, detailing rental terms (month-to-month, used sets for $60/month, new for $85, minimum 6-month rental, first payment on install day, free delivery/install/maintenance).
Customer Pricing Sensitivity and Tips [32:31]
- Customers are generally happy to pay, as it's cheaper and more convenient than a laundromat, especially with free delivery and installation.
- Some customers have given tips of up to $100.
Comprehensive Business Support [33:01]
- A school community is available for in-depth training on Facebook ads, door hanger templates, setting up Stripe and Google business accounts, website building, sourcing, fixing, and flipping machines.
- The business can generate $500 a month to over $30,000 a month and works in communities of all sizes.
Business Scalability and Reach [33:44]
- One individual in Salt Lake City is reportedly making $60,000 a month with 900 sets.
- The business works in small towns (e.g., Burley, Idaho, with a few thousand people) and large metro areas.
- It has low overhead, is accessible to anyone, and is passive.
