Forget Snack Machines. This One Refills Itself

$15,000, $20,000. Wow, a month? Yeah, $500 to $1,000, you can get a small ice machine. You're talking about like 7 to 10 cents for the bag, and then all in, 10, 15 cents.

Jeez, so it's like 90% margins.

We're leasing this for $550 a month. The first week we did somewhere between $1,000 and $1,500 on Saturday.

Wow.

The first week.

Would you believe that this boring business right here is a cash cow, especially if you have them in the right locations? Today we're going to talk to CJ here in Fort Worth, Texas, He just has a few of these things about a mile apart from each other. He has zero employees. He didn't know anything about this industry. And most importantly, he's going to tell us how to find the best deals for pennies on the dollar, how to find the best locations, and how to scale this business semi-passively with no employees. Let's dive in.

How I personally got in the ice business was I used to own DFW Pool Services. We were spending like a couple grand a month on ice and water. So we had 7 trucks and 3 vans just for our little business and crew.

Just keep them hydrated?

Yeah, so keeping, uh, filling up their igloos on a daily basis. And then every, every guy in the back of their truck had their tie-down cooler. They were getting ice and putting water, Red Bulls, Celsius, whatever they were doing. Yeah, probably a couple grand a month just from us. Yeah, so 7 different trucks and 3 vans.

Okay, so you're like, man, how do we turn this cost center into a profit center?

Yeah, how can I get involved in this ice business? The employees are always tough. So like with this, we manage it ourselves. You know, I'm here doing this, obviously with help, Like Bobby's here today. We've got one tech. That's really important. But no employees. We're maintaining it. We'll get jams, you know, things get dirty, the doors break or crack. Most of the stuff's pretty— we can do ourselves. One of the most important things, again, is location. So I think that's the first step to getting an ice machine is trying to get the location. You can start networking with other owners, which is really how to get into this business, is network with the owners of Everest or water stations from Cooler Ices.

Like individual local owners?

Yeah, individual local owners. So hyper-localized. Yeah. Get with those owners. Most people are like, you reach out to me, are pretty cool. We're small business owners. Get with them and ask them how they started. How did they get into the business? How much? And a lot of them are selling their machines. They're older, older guys, older women, guys. So they're selling their machines. And a lot of times they're just trying to get out of the business. One of the ones we're trying to buy down the street, the guy kind of has just let it go. It's like distressed real estate. It's a distressed water station and ice business, and we're hoping to pick it up for way less than we paid down there.

Yeah.

But like a buddy of mine that actually bought my first Location Everest machine, he got one for $500.

Wow.

So the owner was like, hey, he only owned one. You're looking for owners with one ice machine or one bending water station.

Because they're not at scale. They're max stressed out. Yeah.

So like if something goes wrong, they're like, it's of course on a Saturday and they're with their family or whatever they're doing. He was like, hey, just take it. It's kind of beat up and broken right now. It just needed a few parts. He probably—

What was it worth in that condition?

I think $10K to $15K easy, easy, easy. And he put that little bit of money and moved it to another location. He's actually selling that machine. machine right now because he's getting a bigger machine. He's probably— I think he's going to sell it for $15K or $20K. The biggest thing obviously is location and accessibility. So how many cars— like, you're seeing a ton of cars go by here. So we get about 30,000 to 35,000 cars a day going by here. You look at traffic counts. Yeah, you can look at .gov, see traffic counts. Like, standing here right now, you can just see there's just a ton of volume. Um, the other thing most importantly is, is, is from location to parking and then being able to pull in with a trailer.

Yeah.

So you're gonna get like yard guys, electrical guys, pool guys, construction.

Do you even survive without them? Is that like your core business?

I think so. Yeah, guys with— that's learning from the pool company. So they're getting ice almost every day, if not every day. Like every guy's Monday through Friday, we're doing the pool routes. They're filling up a cooler, waters, their Red Bulls, their little lunch.

Yeah.

Different snacks.

And they're coming here because it's cheaper than the gas station or the grocery store.

Yeah, way, way more realistic. Some of the CVSs, you're talking about almost $4 for 7 pounds. So right here we're 10 pounds for $2 and 20 pounds for $3.50.

Wow.

So you're getting almost 3 times the amount of ice.

What are your margins on that? Still good.

Yeah, really good. The most expensive thing is the ice. So I'm sorry, is the bag.

The bag, yeah.

Excuse me, is the bag. You're talking about like 7 to 10 cents for the bag. And then, you know, maybe all in, maybe a quarter, maybe 10, 15 cents for the ice, you know, max if you're selling good volume.

And then what do you sell for? $1.50 you said?

The ice we're selling 10 pounds for $2.

Okay, geez.

And then 20 for $3.50.

Jeez.

And you're at CVS, Walgreens, you're probably talking about 7 pounds, almost $4.

Yeah. So, it's like 90% margins.

Yeah. Huge margin. I mean, they're still— I mean, they're making a ton of margin at that and they're just selling to a different clientele.

Yeah. But like you're at 90% margin even charging $1.50 or $3.

Oh, yeah.

What's one thing that takes 2 seconds and means a lot to me? Just hitting subscribe. You think you're subscribed because you see my videos in your feed, but you're not. Just hit subscribe and it would mean the world to me. What I'm curious about is, do you own the real estate or are you leasing the real estate? You just own the hardware or what?

So, we lease all of ours. At our first Our first location, the thing we do over there is we actually do a revenue share. So you can normally revenue share from about 20% to 32%. The owner over there, it's a really, really busy self-serving car wash.

Okay.

So that's our busiest location. We get about 40,000 to 50,000 cars a day. So we do a revenue share there at about 30%. So it's great for us in the sense of it's our only location there. In the 7 years we've been doing this almost, we got broken into one time and it happened to be that location. So we were down for a couple months. They drilled through the machine, so we had to get some things welded and fixed. But the good thing about that location is we're revenue sharing. So if we're down, we're both taking the ride together for that 30%.

What is your revenue at that location?

Yeah, so on average, you'll say, you know, between $2K and $3K on a really busy time, we can get up to $4K or $5K a month.

Wow. So let's say $3,000. You're giving about $1,000 of that to your landlord.

Yep.

Right.

Which isn't a bad deal because on the slower months, December, January, February, You know, we may only be doing $300 or $400 a month.

So $2,000 left. How much of that goes to electricity, bags, and water?

Yeah, so that's the other thing to factor is at this location, this is probably our best bang for our buck. We're leasing this for $550 a month.

Okay.

Not revenue share at all. We make— and we have this and this, and we might even have a food truck come and rent this space. So then they would pay— we're probably going to charge them like $500 a month.

Yeah.

You know, we'd basically be at 100% profit besides Utility and water.

Yeah.

And so on this, it doesn't take as much. So we're looking at around, say, $500 a month for water and utilities. On the high season, probably up to $700.

Okay.

Down there, we're renting for about $900 to $1,000. It goes up soon, and we just took over that other property. But now the bills are much higher, and we have a way, way bigger machine. It's 3 times as big.

Okay.

That machine holds 6,500 pounds in ice. This holds about 1,500. And then the old machine that we were down there, the Everest, is 550 pounds. So obviously—

That's like the vending machine size.

So, and those are obviously all each as you go up, the bills cost more.

Okay. So, if you have a $3,000 a month over there that you're left with 2, most of that's profit.

Yeah. Besides the rent.

Well, and some like occasional maintenance and stuff.

Yeah.

Right?

Which is the other biggest factor.

Yeah.

So.

So, across how many locations total right now?

4.

4? What's your total average monthly revenue and profit across all 4?

That one's brand new. That's why it's hard to say.

Okay. Well.

So, we just got that one. But we're going to be looking probably hopefully $15,000, $20,000.

Wow.

A month?

Yes. In profit?

In revenue.

In revenue.

Yeah. So then probably say $5K a month with everything. So like you saw Bobby out here cleaning. Down there we have a guy that it's about $600 a month.

Okay.

So he's gonna be coming by, checking jams, tweaking any parts. And that's the biggest thing is to stay on top of it. And that's why the guys with one machine, they're trying to do it all themselves.

Yeah.

So we have a guy that comes around to all the machines. Like I said, it's about $600 a month depending on how busy he is, maybe up to $1,000. So normally when I come in here, I just open it up, hit the light, and then so you can kind of see. So all these are electronically kept. Everything runs from our phone. So like, say someone gets a jam, they call or text me, we can run these off our app and like dispense free water bins.

Oh, that's cool.

A lot of times reset the machines. Now if there's a coin jam, that's like is what it is. You got to physically do it. That's why you still got to come out here and be hands-on somewhat. But if it's just like Coin that needs to process through, or just like a computer. I mean, every once in a while you got to reset your phone, computer. We can reset it all from our phone. We have these machines. I mean, we have counters on them all as we stick in money. I mean, this one in the last month, you know, $2,500, $1,900. You know, I can't see that one, but I mean, these things get a ton of volume.

Yeah.

And then we reset them normally like every month or every quarter depending on where we're at and just timing. So we come in here, grab, grab the coins. So what I normally do is grab all the coins first and then grab the cash. And so these being street front-facing, these 2 machines get— are a little busier just because sheer just facing the front. I'll grab the cash and then I just test it. I'm dropping a quarter in. And so, uh, that one's good to go. So there's no jam.

So your first location you built from scratch, you wouldn't end up doing that again?

I don't think so. Um, I think we've gotten well networked from meeting people on Facebook to all the other owners around this little niche area. So we're gonna keep trying to buy locations.

Was this your second or was that your second?

Yeah. So this is the newest location that we just got starting as of May 1st.

So this is going to be the cash cow. Hopefully. Yeah.

That's the goal.

I mean, this could do the revenue of your others combined.

Probably combined. And then our goal is to get another big Twice the Ice, which is on the other side of Seminary and 35th. You know, like we were talking earlier about business, just jump in and go. You don't have to know everything. Try to find the best location you can, or there's different location services. So like if you can get in with someone on Facebook or reaching out, every owner's phone numbers are on the machines. I mean, if You could go to the machines in your area and just call the owners and finally catch one. I mean, I have other people call me. How I reached the other owner on the other side of 35 was I literally went to the machine and called him.

Yeah.

Texted him, called him. But yeah, just find— doing networking through any of those things. And then a lot of times, like the first machine we bought that's off West Long Avenue in Fort Worth, some of the actual businesses— so Everest, Cooler Ice, or even Twice the Ice— if you're going to buy a brand new machine, they'll help you find a location. And like Twice the Ice is like anything like McDonald's or Chick-fil-A, They won't allow you to have a machine within a mile or 2 of each other.

Yeah. Yeah.

So the other Twice the Ice is a couple miles down that way. And, and then the other one is, you know, a little farther down that way. So they're all close.

Can you get the machines financed?

You can. So we haven't financed any. I would highly recommend not. Most of the machines that we've picked up, we've had some other machines too that we've ended up selling. Like this one was financed and the other machine we've bought was financed. And so what we've seen is during the slow times, especially the unique time during COVID some of them were really busy and some of them were slower. And so the people that had financing or something go wrong with the machine, especially if you own one or two, they're starting to get these big bills and maybe some of the frustration of having to keep paying water and utilities and the monthly thing like anything, and they're not bringing in more, so they're losing money. So they're willing to sell. So, um, I don't know. I recommend starting small, getting one and building it up. And, you know, within a year or two, depending on the location, maybe 2 to 3, you can make 100% of your money back and be all profit.

Yeah. How in Fort Worth proper, how many machines would you say there are? Like, how big is the market just in Fort Worth proper?

Great question. I actually don't know the answer. How many? There's, there's a lot. Yeah, there's a ton. I mean, obviously we have a water and ice machine right there that you can see.

Talking hundreds, tens?

Yeah, hundreds.

Really? For sure. So you're doing, call it $25,000 a month with just a tiny sliver of just Fort Worth's market. Yeah, that's a huge industry.

I think less than 1%.

Wow, that's crazy. So if you really wanted to scale, like I know you do a lot of real estate. That's probably where your real money's made. But if you said, for whatever reason, I'm just going to go all in on ice, I'm going to call every owner only in Fort Worth, this could be a $10+ million business.

I think so. Definitely.

I think some people avoid this industry because they assume you have to own the real estate and they're, they're pushed away by that. But that's not— that's probably pretty rare, I would imagine.

Yeah, we would love to own. We've tried to buy that real estate multiple times. He bought it right before COVID for like $50K and now it's worth A couple hundred probably. And he's right by that gas station.

But most, most—

I think a lot of people know, they think most people are leasing though.

Yeah. Hundreds per month, low thousands.

Yeah. I think most people are leasing from $500 to $1,500.

Yeah.

I'm at that really good location by, by our house in, in Flower Mound Highland Village. He's leasing for probably closer to $1,200 to $1,500, but it's a phenomenal location. Insane location. It has everything. We call it a legacy location. He's by the lake, right by 35, multiple entry points. You can enter with a trailer in 2 different areas. Super busy area driving into all the construction areas in Argyle and Lantana.

And the weekenders with the boats.

Weekenders going the other way from the other side where we are to the lake. It's in a liquor store parking lot.

Oh man, what do you think he does a month?

Yeah, so that's the guy. He's probably— he could get up to $15,000 to $20,000 a month, I think, especially during the 6 months of busy season, which is May to September.

Yeah. Now do people buy these on multiples? Like if you were to go start texting Owners, are they gonna wanna sell at a 3x profit? Are they looking at the value of the actual machine or?

Yeah, I think great. Your question to go backwards earlier, that's probably the biggest thing that people are worried about is, is having to think they have to buy the land.

Mm-hmm.

And then also a lot of the owners are selling in 2 to 3 multiple, 2, 3 times multiples. So say this makes like $100K a year, he could have easily sold this for somewhere around $300K. And then like the owner that we've been trying to talk to that's trying to sell for $400K and $500K, I mean, he's doing about $15,000 A month. So he's selling for over 3.5 times, or, you know, 3.25.

And is that normal?

Yeah, I would say 2 to 3 times is pretty normal.

Annual profits? Yeah.

Okay. So annual profit slash close to revenue.

But I imagine you can get some for just total steal of a deal.

Yeah. And I think that's where networking in the community, the Facebook, calling the other owners, like, I mean, we're hoping to pick these other machines up down here for, you know, way less. Yeah. So hopefully one for one, but a lot of them also are going to require maybe $10,000, $15,000, maybe even $30,000 in work.

Yeah.

So that's what I think will scare people off from buying a current, buying a current location is, is that they're going to require work or just the unknown. But the other thing you pick up from buying like a current location, this has been here since roughly 2008. So we already have a clientele built up that's using it every day. Like within the first week, that Saturday I told you about, we did somewhere between $1,000 and $1,500 on Saturday.

Wow.

The first week of owning this, this machine.

It feels, I feel like people start this from scratch cuz they're, they don't wanna call, they don't wanna do like the hard work, but they're gonna pay a ton more.

Yeah.

If they start it from scratch, like you're better off texting, calling, driving around, and you'll get a bet— much better deal.

So that's, I think the other biggest thing that people are worried about when you're, if you're buying a brand new machine, and even we were worried about it, is first off, we bought the machine before we had a location. Mm-hmm. And then you also on a, depending on which machine you get, like on these bigger ones, you have to go through, get city permitting. You may have to build. brick around it. You have to stay in city code. You could not be up and running. I mean, best case, maybe 60 to 90 days, but you could not be up and running for maybe 6, 7, 8, 9 months.

Yeah.

On top of that, you're gonna have to follow city code, get inspected.

You have no idea how it'll even do. It's a total gamble.

And you don't even know if the location is, is good enough. These are really hard to move. The cooler ices are a little more realistic to move. Like, if we sell that machine because this one's doing so well, because we could just get all the people down here and keep selling water over down the street. Those are maybe $1,000 to move and they're pretty easy. You just unhook them. But these, these are like moving a house. Yeah. I mean, you can move a house, but yeah, I don't know. I don't know how realistic that is. And they're, they're, I mean, that's why they're called Ice House America.

Yeah.

I mean, these are basically houses.

Yeah.

I mean, these range buying them for maybe $150K to $500K.

So how much money do you think someone needs to get involved with this business if, you know, at the, at a bare basic level?

Yeah, I think from $500K to $1,000K, maybe to $2,500K if you can reach out to other owners like myself. I would love to steer you into networking or meeting other people online to buy. You can really have machines delivered from the Everest to the cooler for, you know, maybe a couple hundred dollars from, especially if you're in Texas, anywhere in Texas to anywhere in the country. People are selling machines online.

Yeah. So just drive around, look for machines, text the owners, call the owners, try to work a deal. That's the best way to get one.

Maybe that's used or just needs a little bit of repair. Maybe $500 to $1,000. I think you can get a small ice machine.

Yeah. What about you? Like, where can we find you?

Yeah.

If people want to learn more about your business or your real estate or your channel, whatever.

Appreciate it. Don't want to plug too much, but on YouTube, we're Lovis Realty DFW. And then on Instagram and Facebook, we're the Lovis Realty Team and, or Lovis Realty Team. Give me a call anytime if you're looking to get into the ice business or real estate.

Awesome.

Thank you. Thanks, man. Thanks, Chris. Nice to meet you, man.

Likewise.

Good luck to you.