Renan Cortez, welcome to Acquiring Minds. Thank you. Great to be here. Renan, you've got quite a story. You started a bit later than many of my guests, but you've been making up for lost time. How hard and fast you've gone in the direction of buying businesses pretty remarkable. So, let's hear all about it. Start us off with some background on you, please, Renan. Sure. So, I'm born and raised New York City, Queens. Um you know, stayed there until I was 20, joined the military. I I didn't really have uh you know, a clear vision of my future living in in in Hollis, Queens. Um so, I joined the military as a combat medic. Um that's a whole funny story in itself, but I ended up um doing 12 years active duty. Uh throughout there, I I came across some really good uh mentors and um people that developed me as a person and professional. And um got my uh undergrad degree while I was in the military, got out and joined corporate America. I ended up um within the military becoming a cardiology specialist. So, that led me into doing medical device sales uh once I got out. Uh my first job was with Medtronic and I didn't realize how fortunate I was. Uh it's it was a Fortune 100 company at the time. I'm I'm sure it's still a Fortune 500, but it was it was like the authority on medical device uh companies back then. And it still is. Um and I did seven good years there. I grew as a clinical specialist, became a sales rep, senior sales rep, principal sales rep, went to a competing company, moved to New Jersey to get closer to family. Um and then I did another 6 years with uh Abbott medical, which is the number two device company. So, you know, I had my share of blue collar working in the military, infantry, sleeping in the in the the rain and mud. And then, you know, white collar, corporate America and strategy and sales and and high-level um stuff there. Used my GI Bill to get my uh MBA. And then, it's kind of funny, corporate actually almost killed me. I went from my military weight all the way up to uh 300 lb cuz I was wining and dining for the business. Uh you know, things like that kind of almost selling my soul for the business and that's something when I got out of the military I promised I would never do, right? So, tell us a little bit about how you were warned. You were forewarned by your your your military colleagues that like going into industry could do that. Oh, it's so I I got out of the military at 32 years old. So, I was already, you know, well into my adult years. And working at Walter Reed, you know, when you you know, give care to a patient, you know, the the physicians there, they take as much time as they they need to. Cost really isn't a factor. You do what the right thing for the patient. Getting out of the military and getting into the business of medicine was a shock for me. Um and the people the civilians that I worked with at Walter Reed, they knew that. They knew that the civilian sector is very different than the military sector. So, they said, "Look, you know, you care about the patients, you're really good about cardiology, you know your stuff. When you get into the business of medicine, don't sell your soul." And I didn't understand what at the time. I was like, "Okay, sure. I'm I'm me who I you know, I am who I am." Like Popeye, right? But um once I got into it, it it Yeah, 15 years of that, I saw the business of medicine and it did eat away at me. It it did in a big way. Um you know, and anybody who who's listening that's a med device rep, they know exactly what I'm talking about. Uh you know, just besides the regular corporate America jockeying for position, the politics and everything else. I mean, the business of medicine isn't as glamorous and as good as as people think. In the beginning, people thought, "Oh, that's that must be great." It's not. You know, all the business travel, all the dinners. So, I went from my like army weight of 215 and I blew up to like 300 lb, diabetes, hypertension. Um I was very successful, won President's Club. And uh that's when it really hit home for me. It was 2018. I was in Cabo with my wife for President's Club. And it was one of the most unhappiest times in my life. Um cuz I had to go shopping for clothes just to fit. Why you know, cuz we were going to be in you know, a tropical place. And I didn't have anything that fit and it really hit home that what was this all this for? Everybody else was excited, President's Club. And and it was a it's a big deal. I I won it when I was with Abbott. Um but it made me get very introspective. And that's when I kind of sat back and said, "Holy cow, did I sell my soul? What am I doing? You know, I made this company millions and millions of dollars. I make a good salary, but if I put all this energy into something, you know, more beneficial or more worthwhile would like. And that's when I started to figure out my why. Um and that was a very very important trip for me. That that's what got me there. like it was I mean, your weight fundamentally that was the thing that kind of woke you up, if you will. Yep. Yeah. And it was slowly over 15 years. a kind of a a ripple effect of other realizations that you would just you had just found yourself way down a path that you no longer Yeah. approved of, sort of, yourself. was right around that time also. I heard a podcast with uh Tyson Fury. Um and he's right? I know he just had a fight this past weekend, but um he he said a story of how when he won the heavyweight title for the first time, you know, he felt suicidal afterwards. It was like, "What what's next? What do I do next?" He didn't feel like he had a sense of purpose. And he's uh made a story Well, he shared a story of driving his Ferrari and then he was going to go into a brick wall. And then a little angel showed up on his side and said, "Tyson, don't do it." And he kind of swerved and he got his head out of it. But I found that very uh powerful uh because I mean, all right. President's Club is cool. A lot of reps try to win that. It's a very prestigious award. But I felt that. I'm like, "Okay, I did this thing that I've been chasing for 10 years. Now what? Is this it? Do I win it again? Do I go for a three-peat? What do I do?" Um and so, it was around that time also. So, my heritage, I'm half Filipino, half Puerto Rican. At that time, there were there were hurricanes and earthquakes hitting Puerto Rico. There were big celebrities putting a lot of money onto the island. And then I felt a sense of, you know, I could do something. I'm not a millionaire, I'm not a multimillionaire, but maybe I could go over and do something. And that's what started the whole how do I give back to community? How what what is my bigger purpose in life? So, that's what started it all for me. And I'll just stop right here. So, going to the island, figuring out trying to figure out in a a way that you can help, that takes you down a path. Yeah. So, I I fly to uh Puerto Rico. There's an investment conference and I know nothing about investment. I I I'm just a guy in corporate America that's doing okay doing medical device sales. And once again, I ran into somebody. It was a three-day three-day uh program. Around set day two point two and a half, sitting next to somebody I said, "Look, I understand probably 10% of what everybody here is talking about." And she said, "Well, you were smart enough and you knew enough that you had to be in this room. Keep getting in the room and something will And so, that that provided a little bit of, "Okay. All right." And while I was there, sure enough, I ran into a buddy of mine from Maryland. Um and he was he's like a a top-notch uh cultivator for cannabis. And we sat back and can At that time, cannabis was kind of booming in Puerto Rico and we're like, "Hey, would you want to do this on the up and up? I'm the business mind, you're the cultivator. Let's do this." So, that's what set me off on the path to possibly leaving corporate and doing some kind of entrepreneurship thing. Um so, I worked on that for two and a half, three years. And that's actually why I got my MBA because you know, I I did really well in mature corporate, you know, negotiating and and things like that, but I absolutely sucked at entrepreneurship. I did not know anything about investment. So, I put together a really good business plan, spoke to a lot of investors, didn't know the basic the basics of investing and a friend of the family really said, "Hey, look, nobody's going to give you a dime because you don't know what the hell you're talking about. You need You need to polish up. You need to understand better. You So, that's what led me to using my GI Bill. to do a cannabis startup essentially in raised I needed 3 million dollars. angel or VC sort of capital. Exactly. I needed 3 million dollars to you know, to get licensing for the for the build to to put the the whole plan to to use. Um and And you're doing this while at business school? Yes. No, no. This is before business school. This is while I'm in just regular corporate doing my job. That's it. So, so you're doing this on the side, but you stayed in your corporate gig. Correct. Correct. Um and okay. It So, so then the family friend says, "Dude, you're not polished enough. You don't know investment enough." That's right. Or entrepreneurship or anything like that. So, that led me to how do I arm myself? I use my GI Bill. I go to University of Maryland and I get my MBA. And of course, day one they're talking about simple things like IRR and time value of money. And those were the things that I failed. When I spoke to investors, they said, "Oh, what's the IRR?" I'm like, "Uh you know, what's the ROI?" Those We don't say IRR in in my my job as a medical device it's not a thing, right? Um So, very apparent that I I I had to polish up. So, I get my MBA. And when I'm you know, actually University of Maryland, they were awesome. They helped me develop my business plan to make it even more robust so that I can cuz they were excited that this is a real life thing. This isn't a fake capstone project. I wanted to take this to market. Uh so, they put a lot of resources around me and my entrepreneurship professor, she told me, she said, "Look, you need to connect with somebody named Cody Sanchez. She does a cannabis fund. You know, she's married to a Navy SEAL, so she likes veterans." I was like, "Cool." So, on LinkedIn, I hook up with Cody, and that was on a Tuesday, and I remember this because once I'm now I see her feed on on LinkedIn, I see that she's having a happy hour in Austin on that Thursday. So, I'm like, "Hell, I know where she's going to be. I know what time she's going to be there." So, I bought a ticket to go to the happy hour. I wrote her an email, and per her guidance, cuz you know, she has a lot of content out there. She said, "It's always harder for somebody to say no to if you include your picture on your signature line." So, I included my picture, all that good stuff. You know, I have a cannabis thing I want to talk about. I'm heading down from New Jersey. I show up, and you know, she gets to the happy hour. She goes, "I know you. You're the guy that wrote an email, and you flew in for a happy hour from New Jersey. That is crazy as beep." And she's like, "You're going to get some time because that's that's taking a big move." Um and Ronan, was Cody a big deal at this point? She was I I honestly don't know because I'm very obtuse to the world like that. I knew all the CEOs of all the medical device companies. I know she was a big deal. She was definitely on the rise. A lot of people knew her already. Um And this is 2021, you said? So, this is Yes. Yeah, we're in 2024. Yeah. Yes, exactly. Okay. Well, and she Yeah, so she had she was in cannabis. She had like a cannabis fund, which people might not know if they know anything about her career. Um and later, I guess, got out of that. You don't hear her talking about that stuff anymore. Um she she's all about just buying businesses. But this was the kind of the first the step before she went all in on buying businesses. That's right. And so, you went down to meet her to hopefully get her to invest in your cannabis startup. Yes. Cool. Great. And so, you meet her, and how does that go? So, we you know, I tell her what I'm doing, why I'm doing it. You know, she gave me some time. It was awesome. Met her husband. Met the people around. Um you know, she said, "Uh you know, what's the exit strategy?" And then it's it was just too small of a project for her to even consider having the fund invest in. You know, they they do much bigger projects, which I, you know, totally uh was happy with the feedback, the candor, all that stuff. And she goes, "But while you're here, network. You know, listen to what we're doing." And then she said something very poignant there. Um she said, "Look, real estate has made many, many millionaire, but the top 10 richest people in the world come from private equity, you know, billionaires." And so, this guy right here Googles private equity cuz I kind of knew, but I didn't know exactly what private equity was. So, I was like, "Okay." So, this And that's always been something, you know, if I identify some a sector or something that seems to be lucrative or the place I I'll I'll go all in and start studying it, researching it, asking the questions. I have no problem asking a question that I know I I have no idea. You know, I don't mind looking silly or stupid. Um So, that was my first entry, and that was May March or May of 2021. So, now, you know, I go to the happy hour. I'm I I get her newsletter, and I see that she's holding the very first Main Street Over Wall Street or contrarian thinking uh meeting in November of that year. So, I'm still not thinking about buying businesses, but in my mind, I'm like, "I know where there's going to be a room of people that have money. Cody's going to be there again. She's going to see me again, and all her speakers, you know, they have potential capital to invest in this. So, I'm going to give it another shot." Um I fly there November, and there were a lot of big names on there, and I got to talk to a lot of these people. And what really hit me, I remember sitting at my table, and um there was a woman to my left, and you know, I was like, "Hey, so what are you doing here?" She goes, "I bought a pool business, and I'm I'm silly." You know, so I'm like, "Ha, what do you clean pools? What what is this? You know, you're You know, she's she's an older woman." I'm like, "What do you cleaning pools?" She goes, "No, I own a pool business, and then I bought another pool business, and then I bought my competitor. So, now, you know, we're doing about 20 million in revs." I'm like, "Oh, that can happen." And then I talked to the guy to my right, and he was doing some kind of vitamin roll-up. I'm like, "What is this room that I'm in?" Cuz I honestly didn't know the whole thesis of what they were doing. I just knew I I was going for this networking meeting. And as I sat there for 2 and 1/2 days and listening to people on stage and talk about how they created their wealth, and I realized And I love this this thing from the Matrix. I I'm a big fan of the Matrix. There is no spoon. There is no set way to do things. You've been told your whole life that there's a set way, and this is how you But I listened to so many stories of how many people make various ways of people making just extreme wealth, and that's what really got my mind going. And then I remember this one conversation with David Osborne because this was down in Austin, and he's one of the early founders of Gobundance. He came off stage. Pitched him the cannabis thing, and he's like, "Look, man, why are you doing this? Do you like really really love cannabis?" I said, "No." He goes, "What's your why?" I told him I want to give back to the community. I I you know, there's a I want to create a bridge between ideas and capital, and I can't do that without creating tremendous wealth myself. And he said, "Just buy a business. Buy a cash-flowing business, and start with a head start. Don't, you know, unless you really really really want to go through the whole startup thing, and you really have a thing for cannabis, just buy a business." And the way it was said, and just I guess the environment I was in, being in the room, my mind just I was like, "Okay." So, that was November 2022, and I just went deep into learning how to buy businesses, learning the private equity play on it. And And that's that's how it started for me. Yeah, just Yeah. Ronan, um tell people who or what Gobundance is. I actually wasn't familiar, but a few guests have mentioned it as being members. Yeah. Uh Gobundance. I didn't know what it was either at the time. Um but it's it's a network. You have to have a minimum net worth. Um it's more than just uh well, it's not a business network at all. There there is business that happens, but it's more about grabbing life big. That's the slogan. Um having tremendous adventures with people that you could trust, be vulnerable with, um rely on. Um and yes, there are business There's deals that that happen, but it's not purely for that. Mhm. That was a piece that I craved once I got the nod a year later after I bought my first business. Uh but it was funny how everything came full circle with the Gobundance thing for me. Okay. So, you you go to this event, and you're basically you come out a convert. Um I mean, you you literally you go in thinking that somebody who's working in the in a pool business must be cleaning pools. And then but in a short amount of time, you come out realizing, "Oh, no, these are people who buy businesses and buy multiple businesses and are owners, not people who work in." Which, of course, now you count yourself among that that group. That was November 2022. It's now a year and a half later. We're in May 2024. So, a lot has happened in the meantime. Tell us how that what the search looks like. How did you go from kind of this epiphany to actually concrete action? So, first step, you know, I started reading books by then build Walker Diebel. That that was a great start. I joined unconventional acquisitions. That's the Cody mastermind. You know, once again, be in the room. I liked the vibe. I liked the information that was being shared. I liked the community that was being built. So, I joined that mastermind. Um didn't know Once again, I felt like the dumbest person in the room. I I would get on the Monday night calls, and you know, I would hear all this stuff, you know, SDE, EBITDA, adjusted EBITDA, QOV. And but I I also I'm I'm a quick learner, and I also know that if you inundate yourself, and you're in there, you you'll just you'll get it. And you you know, you take a strong approach to it. So, I did that. By the way, if I could, that's a great call-out for the audience for people who are maybe new to this world and listening to this and aren't familiar with all the terminology. Uh like anything that feels technical or is technical when you get into it, it does feel overwhelming, and it just feels like, "How am I ever going to I'm so behind. This is so abstract." Um but sure enough, you listen to it for long enough, and you should not just listen passively, but proactively be educating yourself, of course. Uh these these all this language will start to settle into your brain, and you'll be throwing around the terms yourself. So, that's right. It's a good It's just a good case study you doing this of like feeling really intimidated, but pushing through, and like now you're just as as fluent in the language as anybody. Well, I don't know if I'm super fluent yet. I'm still Every day, I'm still learning. Yeah. You're doing something right. Go ahead. Um and uh So, yes, I I started like everybody else, you know, you go to BizBuySell. You're starting to look. And I I get asked that question a lot also. Where do I start the journey, right? For me, BizBuySell cuz what That does a couple of things. There's information available. It gives you multiples. It gives you reports of what things were actually traded at. It gives you a good idea of the cash flow and the asking price and all the intricacies that go along with it. You know, why are they selling? Once again, you look at enough of that, you start to develop a pattern in each sector. You know, you know that would you Okay, so a plumbing company would typically trade for this at this amount of EBITDA or SDE. Uh you know, a a daycare would go for this. So, you start mentally doing it. And I was very agnostic. You know, I just kind of went out and started looking at everything just to And that's kind of tough also cuz now you have all these different sectors. So, then, you know, you According to the mastermind I was in, build your deal box. You know, what are you looking for and why? So, I built my deal box. It was minimum 500,000 EBITDA. Service-based industry, something recession resistant, within my geography. I live in New Jersey, so I was looking in New York, New Jersey, Pennsylvania, as far down as Maryland. Um So, all right. I'm looking at at these things. I I looked at everything from frozen yogurt to music and arts to dry cleaning to to everything. I actually got had a dry cleaning company that um it I I got a SBA approved for cuz I had about 70,000 set aside just purely to to buy the business. So, it was going to be a $700,000 deal. At the time, uh the interest rates were much better. So, it was six and a quarter that I got for SBA because there was real estate involved. It was a term of 25 years. So, the payment was something like $4,000. Everything said and done, um it it it was really good. It was a good deal. And in my mind, I started already seeing how I could do a roll-up. I could get another one and another one and then it's all accretive. So, I was well on that path, but I was looking at all these other different companies. At the same time, I was Ronan, let let me pause you on because and we'll get right back to it, but I just want to understand a little bit kind of the background, your head space at this point, and also like what your family is saying to this because medical device sales can be very lucrative and I think you basically admitted that clearly and you were very successful at it. Um so, you've hard pivoted out of this. Now, that's 3 years ago. You've since tried to do a cannabis thing which took a couple years of your life, I guess. Um you've gone to business school. So, I could imagine your partner and family being like, "What's Ronan up to? Is he lost? Is he flailing?" Um maybe not. I'm you know, So, so what is what's what are the conversations at home looking like when you go down this when you start going down this journey which is such a departure from where you were going headed? Yeah, so I just a little background for me also. I have a wife. I have five kids. My oldest is Five kids? Yes, sir. Yeah, we start early in the army. Um yeah, my oldest is going to be 26 this year. She's a third-year dental student in Alabama right now. Oh, that's great. Uh second oldest graduated college already. Third is a freshman in college. Um Fourth is a freshman in high school. And the fifth, he is in a junior high. So, that's the gamut right there. They go from 12 to 26. But yeah, so I'm doing this and I always always was like super busy with everything. So, whether it's going to school at night or doing mastermind meetings or, you know, one of my biggest hobbies is jiu-jitsu. I would train three, four, five times a week. I was always I always have to be busy doing something. So, this just replaced certain things. Um you know, me doing looking at businesses and and doing diligence on that replaced me going to MBA at night, you know, doing night school for for for the MBA. So, it wasn't a really big change of pace on what I was doing. It's just a different thing that I was doing. And I was still working corporate at the time. I did not give that up just yet. So, I was still doing corporate as I was looking for businesses, as I was doing diligence and having all these conversations. So, this whole time from cannabis to the MBA, I guess night school MBA to going to see Cody to being inspired to looking at businesses, BizBuySell, all of this, you're you've you've kept your day job. Yes. Oh, okay. Okay. And how's your weight at this point? I've dropped 60 to 70 lb. Over the I mean, at this point in the story cuz I'm looking at you now and you look super fit. But I mean, did when you had that bad moment in Cabo, did you start losing weight or did that still not come off for a while? It was still there. It wasn't until I quit my corporate um in November of 20 uh 22 that Oh. Yeah. That's when the that's when the weight started to come off. And it's it's kind of funny. I mean, I have the uh the data points for it where I you know, I do my blood sugar every morning. I do my uh blood pressure. Everything was elevated. I never had a problem with blood pressure. And it was just everything was elevated. And so, you could see where I quit and how everything just started coming right back down. And now it's I'm back to normal on everything. I've lost a ton of weight and you know, So, did you pick up the jiu-jitsu after November 2022? Oh, no, I've been doing it for 18 years. Yeah. That's always been a Even at 300 lb, I was a lot slower and I would, you know, out of out of breath a lot, but, you know, it's it's been my my thing. It was always like, "How does a big guy move like that?" Well, I wasn't always a big guy. At one point, I was a smaller guy doing this stuff. And so, I have the muscle memory. But I wasn't happy, you know, even during my performance in jiu-jitsu, you know, cuz I was a bigger guy and I'm older now and so, but yeah, it's a whole new thing now. Now, I feel like I'm in my early 30s again when I'm on the mats. Yeah. Yeah. Awesome. Awesome. Good for you. Okay, your wife is on board with you quitting corporate at some point once you find a business. Yes. Okay. Yeah, she she trusts me immensely with decisions like this. She knows I'm not going to do anything without thinking it through as thorough as possible. All right. Back to the story. So, you've got your you're looking you're getting pretty close on this dry cleaning business. But I guess you're continuing to search. What happens? Correct. So, I I hired a VA that is um that that's all they do is they find off-market deals. And one of the first ones that they found using my my deal box was this big restoration company. Um doing about 2 million, you know, EBITDA SDE. And I was like, "What are you doing to me? This is this is this is not my buy box." I said they said, "Well, technically it is. It is minimum 500,000." I'm like, "Well, yeah." Um and then that's when I was like, "You know what? Curiosity got me. It's free to do due diligence at least in the beginning." Um Yeah, you know, you always wonder what what is a 20 or 30 million dollar house look like, so maybe you want to go to the open house. So, I said, "You know what? Make the introduction. I'll talk to the owner. We'll see what a what a 2 million dollar EBITDA company looks like." Um And as I was doing diligence on that, I actually fell in love with the profit margins, the strength of it, the recession resistancy of it, just a lot of factors that and it wasn't being run as efficient as it could. And I saw that from the Fortune 500 lens. And I saw nothing but opportunity. It was like, "Oh, wow. Now, I have to figure out how the heck to buy this cuz all I have is 70,000 kind of squirreled away to buy a dry cleaner for 700,000. How am I going to buy this this company?" And that's when the whole seller financing thing. I don't know if you want to talk about that, but yeah. Oh, we definitely want to talk about that. Um and and just to but a sense of a little bit more about your your getting getting comfortable with the idea of buying a much bigger business. You just told us that like I guess the answer is the the the opportunity there kind of seduced you in that direction. But still, it was going to be a much bigger lift, not just where you're going to get the money, but like you're going to have a bigger team. It's just a much bigger operation. So, did it also require you kind of mustering more confidence to just think you could lead an organization that's much much bigger, more complex? That actually I I already intrinsically have that, you know, cuz I I've led big uh numbers before. I've dealt with large uh budgets. And you know, my territory was 10 million plus. So, the numbers didn't scare me. Um the fact that it I didn't have the safety net of corporate maybe was a little like, "Oh, man, you know." But the the size of it, it actually felt more comforting. Um and that was one of the the how I compared and contrasted it. The dry cleaning operation had five people. If one or two get sick or they want to go on vacation or something, I'm the one that's going to be ironing and putting things on hangers and and working the register. And am I willing to do that for 500,000, 600,000 a year? Yes. Is do I want to do that? No. Um but when I saw the bigger company, it came with 35 people, levels of management. I was like, "Okay. I like that a lot better." And I know I I I have good leadership skills. Uh you know, I'm a people person. And the thing I don't have is construction experience. I have 23 years of cardiology experience, but no construction experience. So, I reached back into my network of people that I know. And uh somebody that I did my MBA program with, he was an accountant and controller for a big construction company doing six to 700 million dollars in annual revs. So, he's very familiar with it. He's been in it his whole life. Called him up, said, "Hey, let's meet for a beer." He lives right in Pennsylvania. We we sat. I told him the whole story, shared with him uh the vision. And he was uh the first one to come on board. So, him and I partnered up. as your controller, as your CFO? Yes, sir. Mhm. Mhm. So, that's how that started. That's how I got a little bit more comfortable with taking down a bigger company. Great. And before we hear about the company and how you did take it down, tell us a little bit about this VA for off-market deals. I'll see the occasional person like that posting on Searchfunder saying, "Hey, I offer this service." And I never know what to make of it. Um tell us a little bit about your experience, the how effective or not it was. Sounds like it was effective. Tell us what you can. So, he was a very effective for me. Uh you know, all he had to do was get uh not more more than a warm lead, but good concrete information because I've seen a lot of people that do like web scraping. And so, you're you're at the mercy of the internet, whatever you could find on like ZoomInfo or whatever. He actually he'll find the asset or the the target acquisition and and have a pre uh meeting with them. Ask them, you know, why are you selling? What are the revenues? How many people? So, you're getting it directly from the owner. He puts it in a little matrix on an Excel or whatever platform he's using these days. And he delivers it to you on a weekly basis where you look at all the targets and say, "Hey, I like this one and this one. Can you set up a meeting?" And then you're you're off to the races. Um And is this guy in the US? Yes. Well, no. No, no, he's in Canada. He's in Canada and he runs a team. Yes, yeah, he runs a team in the Philippines. Yeah. Okay. So, they they do hundreds of deals. he has a con but so he has a pre-screening conversation with the owner? Yes. So, he's actually been able to get the owner on the phone. Cuz I mean, this is all of course quality of lead. And so, Correct. he's really qualifying the lead pretty well. And to actually do that, you'd have to you'd want this individual to talk to the owner, which sounds like he does. But that'd be something that it it would be hard for somebody in India or the Philippines to do that and and pull it off. Cuz the owner's just going to be like, "I don't want to talk to somebody in India who's claims they want to buy my business." Sort of thing. yeah. So, so this guy is domestic or whatever, North American. Yeah. Okay. Interesting. And and how does he charge his services? And do you want to plug him? Uh if I can, I would love to plug him. Yeah. So, his name is Dave Collinson and uh you know, so Dave Collinson and Associates. Um and since then, you know, like just to to give another plug, Athena Simpson, you know, she she does uh something similar, except she goes uh even further and does like a white glove concierge service where she will consult and help you take down the comp- uh the the business itself. Dave will find the asset for you, but then it's up to you to to close it, right? I consider myself to be a good negotiator, good closer, so it was perfect for me. Just give me a warm lead and just let me at it. And that's how I took down this company. Um if you need a little bit more hand-holding, then Athena Simpson is perfect. You know, she does the sourcing and the hand-holding. Um if you you know, you just really want numbers and leads, Dave Collinson. So, you know, that those are two people that I Yeah. I highly recommend. And yeah, Athena Athena is actually who connected us. And I had the chance to meet Athena in in uh Salt Lake City for SMBash. And she's great. So, thank you, Athena, for for connecting me here with Ronan. Um but yeah, people should should consider both of those two folks as uh if they don't want to kind of be running the mechanics of their own outreach and search. Okay. All right. So, tell us more about this business that you found and most specifically the seller financing piece of it. Sure. So, I had already been a approved for the SBA loan for the dry cleaning, but now I'm in talks I'm doing due diligence with this restoration company and I infinitely like it better. I'm like I I have to I just have to figure out the barrier of of capital at this point. Um so in looking at all these deals on BizBuySell to begin with, what I did is I created what I call the dumb calculator. It's a it's a really silly little It looks like something from Commodore 64 times, Oregon Trail type stuff, right? Um but it has all the basic things in there that I need, acquisition price, what is the the cash flow, the profit that I would expect from this, and what are the financing terms. You plug all these things together, after debt service, you see what you're really working with, right? And then you still have to apply taxes and depreciation amortization and all that, cuz everybody's situation is different, but it was a really good indicator on if I liked the deal or not, if there's enough meat on the bone. Uh so, I had this thing already set up. And this is an Excel spreadsheet, basically? Yeah, and it's just a simple PMT function, equals PMT, and then you put in all the, you know, the things and and then it'll tell you what your debt service is for whatever percentage rate and how many years you want. And the other two things you plug in are purchase price and cash flow, or you know. So, that's something I use just to really quick tell me how to, you know, if I like the deal or not. Um and I after some time of looking at BizBuySell, I could just look at numbers and say, "Oh, this is a good deal." But in the beginning, you know, I I did that just for the the muscle memory. So, I used that same calculator, I put a amortization table in there, and I just started trying to figure out, how can I do this? If I get a loan for this or if I get investment for this, and then I said, "Well, hell, I see on the internet people talk about this seller financing thing and 100% whatever. Let me see if I could structure a way to do that." And I sure enough I I put it into the calculator, I I put some terms, I said, "This might work. This Now I have to sell it." So, this is two and a half three months into doing due diligence with this they're two brothers. Um early you know, early 50s, very young. They just have other business ventures, so you know, it was taking too much of their time. So, we had already established a rapport, a trust. I didn't go in day one. So, this is what a big thing that I'm going to say also, I did not go in day one talking about I want a seller finance this company. I It was just I just wanted to see if I even want to buy this company. Let's do due diligence, let's learn each other, and let's talk. So, we did that and it was just a lot of question and answer, what does this mean, and you know, what mitigate Ronan, but on that point, like they are going to for a business that of that size, they're going to want to not spend time with a tire kicker. They're going to want to know that you know, have a certain sense of certainty to close with the person they're talking to. So, for the two months before as you said, you weren't planning a 100% seller financing strategy. You were kind of going down this these conversations, rapport building, negotiation in good faith. Um but so how did you bridge that gap? Because if they knew that you only had 70 grand in the bank and really didn't have a source of funding for this lined up, they were probably going to run. That's right. We never talked about it. Not from the very beginning. asked. They never pressed you. If they did, well, you know, they I would I would kind of turn it they they would say, "Look, how are you planning it?" Oh, you know, I'm going to put a percentage down. It's probably going to be higher than an SBA loan, so we're going to have to go conventional. Uh I'm going to raise some capital. You know, I could talk to some capital partners. But before we even get to that point, let's just make sure we're a good fit. Mhm. Mhm. You know, cuz and that's that was in the debt truly is the mentality I went in with. If I liked it, then yes, I was going to find a way to purchase this thing. Bring in investors. Uh you know, cuz I had already been down that route for the cannabis thing on speaking to investors and knowing what drives them to a certain extent. So, I felt not 100% confident, but that I had the gear that I could ask somebody, a total stranger, to invest in a project as long as it's a strong enough project, cash flowing, and there's a good return on investment for them. So, it was just about that was a puzzle that I needed to figure out, but I was confident that we were going to be able to do this some way, somehow. And they felt that confidence. They're like, "Okay, let's let's take it for a spin." So, now we get down to brass tacks. I really like this. I prefer this over the dry cleaning. And so, I I I said, "All right, I'm going to give this a shot. If I could get this for a seller financing uh bid, you know, then we're this is what I'm going to do. If not, then I'm going to default back to the dry cleaning." So, that was my my my algorithm there. If you could get them to agree to 100% seller financing, you were going to go for it. If not, you were going to buy the dry cleaning business. Why was it not you were going to try to go raise money from investors if they wouldn't do 100% seller financing? Oh, okay. So, yeah. If it and if I could not, you know, I was unsuccessful with capital raise, you know, and Okay. Okay. So, you're going to try any way you could to get this business. If not, you had the dry cleaners the dry cleaning business as a fallback. I was going to give the the 100% seller financing a go, then I was going to give raising capital a go, and then if I just hit a wall or I saw that the horizon was just too far out, then I would close on the dry cleaning. Yes. Okay. So, how do you convince these guys, these brothers? So, I yeah. I have this this and it's not like I said, it's not a complex uh sheet at all. It's has all the basics, but I have an amortization table built in. And I sat with them. And you know, I put in a bunch of different variables. Uh you know, I I won't say different variables, just different things like percentages and um and years, you know, time time to hold the note. And uh I sat down with the guy, his name is Carrie. And we went to a diner. I said, "Hey, look, question for you. Would you ever consider holding the note?" And he's like, "What do you mean?" "Look, we could do this without needing a bank at all. I don't know if you realize that." So, just to give them another little thing, this takes a lot of customer education or, you know, education to the to the seller. Um because I had what I at that point, I now had to tell him how I valued his company, right? These things normally trade between three and 3.5x. So, that was already established. Uh we had to talk about how typically these things are financed. You know, you put some money down, you raise capital, you get the rest via a loan. So, he's very well aware of all that. So, now I hit him with the "What if you were to hold the note?" He goes, "First of all, I didn't know that was possible." I said, "Oh, it it sure is. You know, as long as we have a a lawyer put together a promissory note with terms that we negotiate, we could do whatever. It's it's totally He goes, "Well, why would I want to do that?" And then I said, "Well, would you rather I pay 8 million for your business or 11.8 million?" He's like, "What What are you talking about?" And so, this was a little bit of a hey, "I could go to Bank of America, Chase, you know, uh you know, whatever, go go to like a a conventional bank and uh with some investment money, get the loan, and now I'm paying them the interest payment. You get your money, which now what are you going to do with an 8 million dollar check? You know, you're going to get taxed like that. Or we could turn it into smaller increments over time where I'm not paying the interest to the bank. I'm paying the interest to you. And if we negotiate this right, that's going to be in excess of 3 million dollars." So, to be clear for everybody, the the delta between the 8 million and the 11.8 million, that 3.8 million are the interest payments, correct? Over time. Yeah, the total the sum of the interest payments over time, which yeah, that goes either to the lender or in this case, you're pitching that it just go to him. That's right. And so, yeah, he he that that was a big pill for him to swallow. He's like, "What are you talking about?" So, I open up my laptop and I show him my dumb calculator and I So, we start putting things in and like, "Hey, look, how long Let's just play hypothetical right now." Um I showed him that I was approved for an SBA loan at 6 and a quarter already. So, I said, "Look, what if I give you a higher percentage rate? Let's go 7%. So I anchored it at 7% because now we're there, 7%. And I said, "Let's Let's try to pay it off in 5 years." Put it in 5 years, the debt service was tremendous and I netted about 100 grand for the year. I said, "So what do you think about this?" He goes, "Oh, I would never do that to you." I mean, he's And he's a good guy. So that's We were already gelling. He's a very good person, you know, good friend of mine now. And he's like, "I There's no way I would I would in good conscience could sell you this business and you only net 100 grand because I know the power of what this thing can do." I'm like, "Oh, I'm glad you said that." Um So we kicked it out all the way to 20 years. He goes, "Well, I don't I'm not going to hold the note for 20." I'm like, "Yeah, let's just see what happens." We kick it out to 20 years. Uh after debt service, it clears about 1.2 1.25. Um but I'm like, "We We don't like that either cuz that's way too far out." So we started going back away cuz it's That's the beauty of an Excel spreadsheet. You just plug in a number, things happen. Mhm. So then we landed at 7% at 12. And at 7% at 12, it's just shy of I mean, oh a little bit over a million dollars that it's it's netting after debt service. Um and he was happy with that. And then I did And then I went and took it a step further. I said, "Look, in 2 years of profitability of me actually command and control owning this company, I could get this entire thing refinanced and then you're totally out. Or you could keep getting the the interest payments and then we could go for this ride for as long as you want. But at any given time, if you want out, we could refinance this and so at that point, my question to him was, "One, do you think that the revenues of this company could support seller financing?" He said, "Yeah." Showing him everything that we did, he goes, "Yeah, oh absolutely." Two, "Do you think I could run the business?" Yes. So this is this is me paying you for your risk. The extra 3 million of interest payments, this is us uh going on the ride together and and making as much money as we can during this deal. And And that's that's what did it. Now Renan, that that's a spectacular story. Congratulations, huge congratulations on on that. Um but I I I got to stress test this guy's logic because because first of all, this is a this is not only a 100% seller financing deal. This is 100% seller financing deal for a big attractive business, or at least according to the numbers. We don't, you know, we don't know what's under the hood or whatever, but let's just looking at the numbers. So 100% seller financing deals are things that we hear people hawking courses and gurus telling us is that that's the way to do it, but anybody who's been in the space for 5 minutes knows that it's it's not a good approach for a lot of reasons that the audience will already be familiar with. And yet here you pulled it off. So we need to really um understand why you were able to pull it off cuz I I would be loath to kind of encourage people to think that this is something repeatable that they should go out and do. Oh, it is extremely difficult. Yeah, so so before I start with my questions, why don't you maybe give us a little bit more about how you feel about this? That this is not indeed not something that you recommend people either. You In fact, people in the in the Cody Sanchez community come to you saying, "How do I do this?" and you say, "You don't. Don't ask me." So So So tell us how you feel about this and the good fortune here. If you feel like you're really vibing with the owners or you have a good relationship good enough to have that conversation, give it a try. Why not? It's It's a good It's a good conversation piece anyway. You're not trying to pull one over on anybody cuz it truly is a win-win if you structure it correctly. Uh but it is not repeatable. There's no way, you know, to do it over and over and over again. So that's why I Anyway, oh we're going to talk about that in a bit as well. Uh but I had to actually put out like a public service announcement and saying, "Hey look, I I speak a lot about, you know, the 100% seller financing." Now I'm not selling anything. I don't sell a course. I just like sharing the story cuz it's a real thing that happened. But what I don't talk about enough are like the other 20 or 25 that never made it off the ground floor because people don't want to hear it. They want money in hand. They need the check because they have obligations. They So it has to be the perfect storm of somebody who doesn't need the capital right away, has that longevity that they're not like in their 80s ready to, you know, spend that money on their grandkids, but, you know, see it as almost an annuity, right? Instead of a lump sum check. So there's a lot of other factors that have to be present and I got lucky. I I It was a perfect storm of consequences or or variables and it worked in this instance. Um So you had been talking to I mean, trying to do other deals, not just the dry cleaning. In fact, you talked to 20 and 25 owners and floated in varying degrees to these other owners 100% seller financing and just got lots of no's. As As As part of uh refining my pitch, refining my talk track, and that's all part of sales for me. You know, the more you say it out loud, the the better you get at saying it. Yeah. Um so that was kind of like a proving ground for me. What's working? What What gives good feedback? What doesn't? And And that's what helped me refine it during the process. Yeah. So this This for example, this thing about I can either pay the bank 3.8 million dollars in interest or I can pay you, seller, 3.8 million dollars in interest. That was something That wasn't just a light bulb. That was something that you had kind of iterated and figured out over 20 prior conversations. Yes. Yes. Mhm. And so So going back to I How did you put it? The alignment of the stars with these these gentlemen, these brothers? It was What was the alignment of the stars? That they were younger, so that they didn't want all their cash immediately. They So they didn't need the capital. They But what else? Like Why Why would these guys not, especially if they have other busi- business interests? They're probably somewhat sophisticated business owners if they're if if the business that they have is generating 2 million dollars and that's not their biggest That's not their biggest venture. That's not the biggest thing they got going on. That's the one that they want to move to the side to go off to give their attention to bigger things? They're probably pretty sophisticated business people. Why wouldn't they first at least go to a broker and, you know, say, "What can I get for this?" as opposed to just just trusting the man off the street who who pitches them on 100% seller finance? So here's additional information for that. They were approached several times by private equity in the past. And the thing that the recurring theme for them that private equity wanted to do was keep them in the business. And, you know, just they they would buy them out, keep them in the business. They wanted to be assured that I would completely get them out of the business. And yeah, we did. That was one of my things. You're You're out. I mean, a good transition period of a couple of months. I mean, it turned out 2 months into it, we had full control of the company. It It wasn't that hard. Um but he they wanted to be assured that they were not going to be in the business at all. They were kind of done with that, just totally out. And um Oh man, there were there were Oh, that goes back to the education piece. Uh Normally these things trade for three three and a half. I told them I'll give them a higher multiple for it. Four times multiple. Right. I already showed them that I had been approved for 6 and a quarter. I'm giving them seven. So now they're getting more money for the asset once again because they're doing a seller financing. That only comes with seller financing because then the alternative is, "Okay, I raise capital. I go to a bank." The bank is never going to approve an 8 million dollar purchase price for this. You're probably looking at 6 and a half, seven. So do you want to go that route? It's going to take longer because you have to jump And And I shared my pain point with 10 months of getting an SBA loan for the dry cleaning company. I said, "I've been working on this for 10 months and this is 700,000. Imagine what it's going to look like going for whatever, you know, we're going to buy this thing for." So it was a little bit of I don't want to say fear, but the quickest way to close is if we come to terms and we could close and be done with it. And, you know, with terms that everybody likes, yeah. So it sounds like another thing that was special about these sellers was that they were just had a real sense of urgency. They wanted to move on. They didn't want to have to give That's right. any more attention than they had to to this business. a clear path forward. Yes. Yeah. Be- Because you wonder, you know, like why they couldn't just hire an operator. A business that's throwing off this much cash, just hire an operator and collect, you know, 1.7 million dollars from now until they're 80. Well, that that's another part of the the special sauce there and and the one of the the unicorn things, they I'm not talking bad about them at all, but control, control, control. There is no way that they're delegating anything to anybody. So that's why it took so much of their time because they spent 12, 13 hours a day on the business, but they weren't running it as efficient as it could. Um And so I saw that as an opportunity and they thought I was crazy when I started putting uh They had all the levels of management in there, but they weren't really truly operating in that capacity. It all was was him. They were so kind of micromanagers, these people. big time. So it was a total culture shift when we took over and we started delegating. We implemented EOS, right people, right seats, and it was kind of like we broke them broke them out of jail and said, "Let's go." And uh that So that that's another little piece right there cuz it All right, so this is a perfect example. There was another company on my my deal list, electric company, about the same size, 2 million EBITDA, right? That guy, I kind of shot myself in the foot because we were talking seller financing. Um and this has been in his family for 100 years, 101 years at the time. Yeah, it was like third or fourth generation. Um Build the trust. But I said to him, I'm like, "Hey look, if you're selling purely to once again, early 50s uh, I said, "If you're selling purely to get your life back, why don't you just get an operator, somebody?" And sure enough, he did. And so I I I I was kind of like booted out of the deal. I'm like, "Oh man." But I'm okay with that because when he is ready to sell, you know, he still knows where I am and and we'll talk. Mhm. Um But yeah, there was no way that they're going to delegate. It wasn't in the the cards for them to do that. So they wanted out. And what were they going on to do? I I I It's just It's so curious to me. development projects. You know, they have a labor company that they they run. There's several different things that they they're into, yeah. Anything else on on the deal, Renan, that I that I'm not asking just because it it just seems incredible to be able to buy an $8 million business with 0% with 0% down? I yeah. I didn't realize it at the time, but yeah, a year and a half later, I I I'm very fortunate that everything lined up that way cuz it did change my life forever. Yeah. And is is 0% financing stuff that in the Cody Sanchez world is people try to do? I mean, is it talked about? It may maybe it was kind of normalized for you a little bit. You were like, "I could I could do this." It wasn't really heavily. I know. No. So that that kind of I became almost the poster child for that, you know, the the guy who did it. And I mean, other people have done it smaller deals, you know, maybe they had the relationship already. But I mean, I I truly went in with the letter of the law and then and did it. You know, and that's not what I was trying to that's not why I was in the community. I just wanted to buy a business and this was the path that got me a business. Yeah, I did not set out to try to do 100% seller financing, you know. So it just kind of happened. Yeah. Well, Renan, one one more question on their psychology just before we leave this cuz this is such a this is so powerful and um that you were able to get this deal. You know, you just think from their perspective about the level of risk they're taking. So they're you know, getting their money dripped out to them over What did you say? 12 years? Yes. So at any I mean, that's an that's an enormous amount of risk for them to take. So even though they're being compensated, you offered them, you know, a premium on the multiple that this might have otherwise traded for a more generous interest payment. You were just compensating them to just kind of make it just make it more attractive. But if you think about this purely from kind of a risk reward perspective, you know, is that compensation enough to to um offset the additional risk they're taking where all of this money, this basically 12 million bucks is all being dripped out to them by this Renan guy over the next over the next Excuse me. Yeah, no, 12 million bucks. 8 plus 11.8 11.8 over over 12 years. So call it a million bucks through this Renan guy that we've known for 2 months. I mean, that's a lot of risk for them a whole lot of risk for them to take on. And and and and and it was Yeah. Just to take a step further, it they it was not decided at that diner. It was a pill for for them to swallow, to discuss. And then a couple of days later, they came back, "All right, what if we do it this way?" That Yeah, and we've landed on final terms after probably 2 weeks of going back and forth and saying, "How about this?" And then we had to talk about the accounts receivable included. What are we going to do about that? And so there was those where the But once I knew that we were talking about AR, I was like, "We're we're there. We're we're going to do this. We're going to do this deal." Um and then that was it. Yeah, it was just And it's funny. I When we got to signing or when we got the purchase agreement done you know, he made the comment. He goes, "Yeah, my lawyer thinks I'm crazy. My CPA thinks I'm crazy." I'm like, "Hold on. Is this deal done?" He goes, "No, it's not done, but I know what we're doing." And he's a very smart guy, you know, and and everything is knock on wood going well. But yeah, it I thought at that 11th hour we were going to lose the deal because of outside influence. So one of my thing things, that's why I prefer off-market deals because I mean, I I don't really deal with brokers as much. I'm sure there's good brokers out there. I'm not sure. I haven't, you know, but from what I've heard uh, in in the communities, a broker can either make you or break you. You know, if they don't want you to have seller financing, they're going to talk to and they they're the ones that have the trust with the seller. So by by surpassing that and me getting the the relationship and the trust and it's just myself and the owner, then it's that will it's a higher probability or percentage of doing a deal like that. Mhm. Well, that I guess is one takeaway you you have from your experience here of of of some of the value of proprietary outreach is that you kind of get to um shape the thinking of the seller rather than having a broker do it. Is there any other takeaway um from your story? What can other than cuz again, neither neither you nor I are sitting here advocating that people should try to go out and get 100% seller financing deals. But given that you got it, is there what other takeaways are there? Maybe the I like the idea of what you said about the reps of just like refining your sales pitch. Although that's, you know, most most of the audience who's actually been talking to to sellers will have will already appreciate that that you get better with reps. Um so that's not really unique to your your situation. Any anything else that we can learn? Uh, for me personally, the thing that it that should where it set me off belief Well, yeah, and that that's the thing, the the sense of of belief that things can happen if, you know, you put your mind to it, once again. And then the big the big takeaway for me was, "Hell, if I could do this with no money, imagine if I raise capital to buy additional companies." You know, cuz now I already have in my mind the pitch for 100% and I've done it and I have it. So now I could leverage that, start raising capital and buy additional businesses with a component of seller financing built in. But if I could put 30 30% down, I should be able to close 60 to 70% of the deals, right? So that's that was my biggest takeaway. Hey, theoretically Well, that that teases that where we're going to conclude our conversation today, but not just yet. Um I want to hear first how the transition has gone, what you've found in this business. And then I want to hear just a little bit about the restoration business cuz this is one that searchers you'll hear searchers buy on the type of businesses searchers buy. Um first, how's it how's it going? What was it like to get into this $8 million 35 person business? So year one, we did all the things. All the things that you just they that are written in the books that you're supposed to do to a business, you know. We put in SOPs, systems, processes, you know, we did a rebranding, technology. And we went hard and I am This is a I am going on record and saying, "Do not do all the things right away because there's something called working capital that you need to be very very mindful of." Um thank God we had a lot of meat on the bone because we did we I mean, we I moved location to a bigger professional building so we all had offices, increased the fleet so we bought additional vehicles, bought additional equipment different, you know, rebranding, swag, um marketing. I we we did everything and I found myself where we're like, "Holy cow, how are we going to pay payroll?" Because we did all the things. You know, the sec We had it built in. We did a sensitivity analysis. What happens if revenue goes down? What happens if it goes up? And we could take that, not a problem. But that's based on all the things that were from before us. Once we implemented all these new systems and process, it cost more money. And then when we had that little bit of a dip it it wasn't as comfortable as it should have been for us. So working capital is key, knowing exactly how much you're going to need and building a war chest. That, you know, I'm I'm scarred by that. And so it's not going to happen ever again, hope knock on wood once again. Um you know, you can say I can say that, but right? You know, But that was a big thing for me, yeah. And and you say you're scarred by it. What What was there a moment of panic? Was there a fetal position moment? What What was it? At the worst moment, what did it look like and feel like? I'm not in my stomach. Let's scare the audience straight about working capital. Yeah, and I'm very transparent. So that that's the thing. I'll ask questions what I don't know and I'll I'll tell you exactly how I felt. I'm talking about deep dark, not in your stomach, crying because you do not have the backup or the safety net of a big fortune anything or big corporate America. It is on you. There's families at stake. There's there's other people involved that you're responsible for. And if you can't pay payroll I mean, what are you doing, right? If you can't take on the bigger jobs. So it got a little scary for us, I would say about 6 months ago. And then um we we got out of that tailspin and we've been doing all right since, you know. Did you get out just because happily revenue came back, sales came back when it had momentarily dipped? a bridge loan. Oh. Yeah. Had to get a bridge loan. Yeah, I had to and that was a panic moment as well. Like, where where are we going to go for this? Um Yeah, and that goes that kind of leads into, you know, the the end of this story because, you know, I am waiting on bigger capital. That's why I made all the moves that I made cuz I was counting chickens before they hatched. And I'm I'm still counting them because they haven't hatched yet. But any day now, any day. All right. Hold Hold on before we get to it. And just to be clear on the timing here, you bought it in Jan of last year, Jan 2023. I actually signed for it in November of '22, took the I quit my corporate job then, took the entire month of December to just kind of recalibrate. Um and then January 1 full-time operate Well, not operating, but full-time into my new venture. Um I will say what I'm going to put out put this out also cuz this is another thing that I I'm in the communities I'm in. When I speak to people looking for businesses and they say something like, "Oh yeah, I really like this. It's It's really good revenues, blah blah blah blah blah." and the previous owner does 4 hours a week on the job, whatever. So I I could keep my job. No. No, they could do that because they put 30 years into the business prior to you. If you do not know the sector, unless you already are like an expert in that field, but if it's something that you're pivoting or something that you're not that familiar with, it's going to take a lot more time than you think. You know, if you're going to do it right. You have to know the industry, you have to know the ins and outs, know the people, know your business and then you could kind of put the brakes on maybe a little bit. But I I don't I don't like that mentality of, "Oh, I'm just going to buy it as a side hustle." and that's not fair for anybody. That's just my personal take. Yeah. Well, it's good Renan cuz I feel like we've now addressed the two things that can be over promised in this world. 100% seller financing, which we've covered in depth, and buy a business and have somebody else run it or have it be passive or semi-passive and you collect checks and work continue working your W-2 or go to the beach or whatever. Um and so So, your your opinion on on the latter of those two is also clear and and I share it. Uh just from There are There are again, there are exceptions to that too. I've had them on the podcast, people who are not full-time in their business. Um but but even those stories, I'm thinking of like a Matthew Saskin who bought a business and hired an operator to go into the business while he was closing on the business, so he didn't have to be full-time in the business. He's still giving his business 10 and 15 and 20 hours a week um even with an operator there. So, anyway. Um And by the way, how did people at Abbott take it? How did they were they were like Did they have any notion that this was coming? That Renan was Renan was buying a restoration business and it's going to be a small business or that. They're in the process of that. I actually left Abbott and went to a medical device startup and then another medical device startup. And I remember one of the this key conversations I had with a gentleman down in North Carolina. I told him I was leaving, this is what I'm doing. And he thought I was crazy. He goes, "That is so risky. That is so What happens if the business goes out of business? What happens?" You know, all the what ifs. I'm like, "Hey buddy, me and you have the same resume. I could just dust the resume off and get a sales job, you know, if but I'm going to give this a chance." Two months after I left, took over the company, did all that. The company that he still worked for let go of 75% of the They got rid of the CEO and 75% of the field because it was no longer a commercial medical device company. They went back to research phase cuz it was a startup and a lot of people lost their jobs and that's where the risk to me lies. I'd rather depend on myself than depend on a company to take care of me. Right. Right. For sure. You know, and it's it's the old thing about W-2s being seen as the the least risky of all possible options, which is such a um you've got essentially I like how to put it that you've got 100% customer concentration when you're a W-2. All of your revenue is coming from a single customer, i.e. your employer. So So it's it's hardly the risk-free choice that people like to think it is. All right, Renan, where were we going to go from here? Oh, the Let's hear about the restoration business. So, I heard you use the word construction. Um Is this fundamentally a construction business? Tell us what you Tell us. So, the reason I like this is our the margins are very strong. A lot of it is insurance based. So and it's necessity. You know, gas could be 20 bucks a gallon, but if you're you have 2 ft of water in your house, you're going to call a plumber and you're going to need your house dried out and and built back up. Um And and to be clear, the restoration is for what? Flooding and fire and mold, asbestos. I like my company because it's not a franchise and we have a whole out reconstruction division in-house. So we take it from the beginning to the end. You know, customer knows what they're getting. A lot of franchises, they go in It's still very profitable franchises. You go in and you do the drying or the remediation and then you leave the reconstruction to somebody else or they have their subs. But you know, we go soup to nuts on everything. We do capital improvements. So we partner up with big developers, builders, you know, commercial builders and do punch list construction. We could do a whole out renovation if you want a new bathroom. So I like the you know, the the flexibility I have with this which is why I did not want to buy a franchise because franchise you're mandated to do one thing and one thing only unless up top tells you different. But for us, we could add or remove a division as needed and we could pivot as as the market goes. So we've actually done that because we were heavy residential restoration like on the back and call of a storm or pipes bursting. But now we're pivoting more to commercial contracts, multi-year, multi-million dollar contracts where we're on site and we're doing stuff like uh replacing all the drywall, repiping, uh you know, all the mold for 500 units uh over X amount of time. So those are better, more consistent contracts. It puts us there and we're the first ones on on site if if a disaster should hit. You don't need to call a franchise. We're already there with the capabilities to do the restoration. So you know, that and Yeah, yeah, that that's why I like the and like I said, I told him about gross profits, 70% 60-70% it distills down to 30% net net, 25 to 30%. So it's That's why I say there's a lot of meat on the bone there. I would have thought that construction had lower margins just because every every kind of general contract not every general, but a lot of general contractors just seems like there'd be a lot of competition for this. Well, new construction the the margins are lower and a lot of other construction companies if if you're subcontracting a lot, that's a lot of overhead and profit that goes to them. If you have everything in-house like we do, then we realize more of the profit. So that's that's that's another reason why I like this particular company versus let's say a franchise or or cuz you could theoretically have a GC company that has three people and you're subcontracting everything. It could still be very lucrative. Huge top line, but once all the the operating costs are figured in, you're you're talking about 10 to 15% profit margins because a lot of that is going to the subs. Sure. But in your case, when you have when you're not subbing out any work and it's all everybody is an employee for you, the the risk there is what? That in a soft market, you're going to not have work for your people. So you can't you can't flex as easily. Exactly. But but then because we're not a franchise, we could pivot. So last last summer, you know, summer's is traditionally our slower period. We did a lot of jan san, janitorial sanitation. You know, I had the guys going in stripping, waxing floors, doing cleaning, dispenser installs. Those kind of punch list item work throughout the summer and that kept us whole. So it sounds like Renan and maybe this is what you're trying to say about having bought an independent business and not a franchise, that you're you'll do kind of almost anything that involves that's not new construction and that's not super technical, but anything kind of that is touches remodeling, you'll do. Yes. Absolutely. Yeah. And is that whereas say you had bought a franchise, they would like just stick to the the the restoration and restoration For the most part, that's what I've seen. Some Some of these franchises say that they could do the reconstruction and sometimes they do. They have an in-house, but that's not the the norm. They'll sub They'll sub it out or they have trade partners that'll come in and do it, which eats the profits as well. And and don't get me wrong, we use subcontractors as well, but not as much. You know, cuz we I mean we can't do the HVAC systems cuz we don't have anybody HVAC licensed on our team. So Right. Right. And how do you think about the kind of strategy and positioning of the business where, you know, being a niche player and you just do one thing and you do it really well and everybody knows you for that versus a strategy which it seems you're now pursuing where you'll you offer a whole suite of services. So that was actually part of our rebranding. The original name of the company was called Restore Pro and because we are we are offering a suite of services, we rebranded to Syndicate Building Solutions. So just a bunch of building solutions for commercial and residential needs. You know, where we could do everything cuz there's additional acquisitions at play right now as well. And some of these companies, they do stucco, doors, windows, roofing. So it's a complete suite of services that we could offer soup to nuts. And so we rebranded to Syndicate Building Solutions and that that leads to the bigger vision of what we're doing. Right. Fascinating. Um And what about just being in the construction business, Renan? As you know, lenders don't like to don't like to lend against construction businesses. They're seen as extremely They are quite cyclical. So, you know, construction kind of tracks the economy. Recognize you're not doing new construction which much more tightly tracks the economy than kind of restoration um work and then all the attendant things that might come off of that. But uh still construction has a reputation for being not kind of the opposite of recurring and whatever on the spectrum of recurring to not, it's kind of at the far end of that spectrum. So, how do you how do you think about how kind of the quality of revenue at the business. Yeah, so and that that's why I'm I'm pivoting a little bit more towards capital improvements because those are multi-year contracts and if I could show the bank we have these contracts in place. Like there's a company in California we're getting ready to acquire. They have 180 million in contracts over the next 5 years that have been awarded. So investors look at that they have they want a piece of it cuz they know that growth is imminent. As long that the big in this space the restoration and capital improvement space the the biggest caveat that I've gotten from people in the field is do not grow too fast. Believe it or not. It's not that we're going to do this. It's we're going to go this too fast and you have to do it responsibly and you know with intention. And so I'm building a good team around that. But yeah, I mean it's a very strong space. I would say the big players in the space account for about 20% of the market. Everything else is fragmented. So there's a great opportunity to do roll-ups in this space. And now that I just gave the playbook away to everybody. Now I'm going to be fighting everybody for restoration companies. But no, they it really is. There there's a ton of good companies like this in the space that are mom and pop, you know, silver tsunami. They're getting out. Kids don't want to take it over. And if you professionalize it, put in system and processes, you there's a great opportunity in this sector. And do you think for people listening that might find a business like this that their playbook should be similar to yours in that they diversify the actual service offering or that they stay in restoration? I would say I mean you know, we arrived at that because of the the opportunity that was presented to us. So I'm pretty good about pivoting to where the opportunity presents. If they have an opportunity to let's say concentrate on hospitals because you know, maybe uh they have an uncle or somebody that's integrated with decision-making then do that. You know, I So I go where our relationships are the strongest and where I see the biggest opportunity. Um you know, for us one of our competitive advantages like I was a veteran. So this is all veteran owned. Um there's set-aside capital for that. You know, each federal and state uh entity has a mandate for set-asides uh for GSA bids. So that's one of our competitive advantages as well. You know, we're we're building a national portfolio of you know, a veteran owned uh restoration service Seneca Building Solutions. So yeah. Great. Well, I've teased it long enough. What what what now tell us directly. What are you What are you building? After this first acquisition, what are you working on kind of Well, yeah. So that's exactly it. You know, we we're doing acquisitions around the country in this space uh that are heavily capital improvements, restoration, um reconstruction, right you know, that that those kinds of companies. And uh we are putting it all under one banner and raising capital to do so. So we have some significant money that's supposed to be coming in. And you So raising capital is one of the hardest things I've ever done also. Uh it's taking three times as long as it should have. But you know, we we have some very strong uh capital coming in hopefully within next month or two. That's when it's finally be done and then we pull the trigger on these acquisitions that we have. Pennsylvania, California, Florida, um South Carolina. And and tell tell us about these acquisitions. They're restoration companies around the country. How big are they? How big are they compared to Restore Pro or what used to be Restore Pro, your first acquisition? So you know, comparatively speaking uh Restore Pro had 2 million EBITDA or Seneca Building Solutions has 2 million EBITDA. The one in California has doubled every year for the last 4 years. Uh they've been in the business for 20 plus years. They built this company to sell to private equity. And so they know how to do this. So they're skyrocketing. And so I'm buying them at a very very good uh value investment. And that's $18 million still. But it's I mean the the this is the company that has 180 and 180 million in contracts for the next 5 years with another 100 million pending. You know, we just have to kind of close the deal on that. And then the the Pennsylvania company is 3 million in EBITDA. Uh we're doing this for $11 million. And they have tons of contracts with HOAs and decision-makers as well. They're on a really good trajectory. Uh the owner there is staying on for biz dev and we have a general manager running it. The one in California, it's two owners. One's going off to the sunset and one is staying on for the second bite of the apple because he's uh we're doing a rollover equity for him. Um same as Pennsylvania. They both have equity in in the deals. So they want the second bite and we do have a projected exit 5 to 7 years for 1.5 to 2 billion based on 100 million of uh EBITDA across the the the portfolio. 100 million of EBITDA. Yes, sir. So that means we need to have top-line revenues 5 6 700 million to distill down to 100 million EBITDA. Um you know, have everything professionalized, SOPs, um culture across the board. And um yeah, either go IPO or exit to big private equity. So where I battle tested that I didn't want to go through the same embarrassment of you know, when I was raising capital the very first time without having my MBA. So I ended up enrolling in Columbia Business School for private equity and venture capital taking that it it wasn't a a degree. It was a certificate program. But still I was in Columbia Business School in New York. Same professors, other fund managers in there, my cohort. And I pretty much battle tested there and they're like, yeah, those that's how it trades. That's what it is. Well, why isn't everybody doing this? And what was their answer to that? Well, cuz a lot of people like I let up met a lot of VC people. They don't want the 3X 4X return on their money. They want the 50X the 100X that you get with crypto or or or some kind of AI platform that's going to take over the world, right? Uh some people want bigger returns for their money and the projects that they do. But then there is a strong sector of people doing roll-ups like this. You know, so I mean that's what private equity is. Well, yeah. Yeah. And did you get the impression that other people in your class were were were they attempting things like this as well? Not the not the professors. It was very weird. A lot of them were like data analysts or they they worked for a private equity firm or a VC firm and they didn't have the vision of just doing this themselves. I was like the weird oddball in my cohort as well. Everybody worked for JP Morgan or Coca-Cola or something in a big way. So they were analyzing big numbers. And I'm the one buying 100% you know, seller financed $8 million company and they think they're like, holy cow, that's crazy. And so there there's I know we're doing something special. We're building our own private equity firm. It's Seneca Venture Group. Um and yeah. Okay, so $100 million of EBITDA you said you need to get to what? 6 to 800 uh million in revenue. That's that we have we're estimating there. We're going to see how everything shakes out once the portfolio really takes shape. But that's that's our best guestimate right now. Cuz if you figure 25% uh you know, to net you know, it should be 400 million. But there's going to be a lot of uh uh reinvestments and debt service and everything else. Uh so we're shooting for like five or 600 million top-line revenues. Uh I mean the California company themselves by themselves uh they project they are going to do annual revenues 120 million by year five. So you put a bunch of those together. And that's it. Where where are they now though? They uh they went from 3 million to 6 million to 12 million and this year they're tracking to a little bit over 20. Mhm. Man, and and so you want to get to 100 million in EBITDA over how long? This project is is the direction of your career. 5 to 7 Oh, you said that. 5 to 7. All right, Ronan. Well, I'm not going to I don't want to just sit here and pick at this plan. You're you're you're um you know, people listening are going to be very familiar with the the idea of a roll-up and that the numbers can get big and and interesting uh and make people multi-millionaires in a very real way in a half decade. Um but these numbers are so big. I know. Even for ambitious private equity people. Um what connect the dots between this level of ambition. You know, I'm almost I'm almost like I almost want to say to you, only 100 million in EBITDA? You know, why why don't you make it a billion dollars in EBITDA? Ronan, come on. No, but like it it's such a big number that you're targeting. Connect the dots between that where you were how you arrived at that and you know, where you started almost buying a dry cleaning business for 700 grand all in. The vision. I see it. And just for perspective there, a little over well, a year and a half ago when I had to Google private equity, right? Um my goal and I have it written down on a gold card cuz I I do the gold cards. I was sitting there with Cody and Austin and they were like, put your next three to five year goals. My goal sitting there in November 2022 was to raise $3 million to buy additional businesses. That was my goal. And then in talking to people in the community, they're like, do at least 10 million. Okay, 10 million. And then somebody else, Eddie Carroll out of Washington D.C. He comes from the private equity world. He goes, nobody's going to respect you unless you do a $100 million raise. Guess we're doing a $100 million raise. And it's just in having these conversations and speaking to the professors at Columbia, it we settled on $100 million for our first raise. Once I Since then I wanted to be in the room. So I joined Family Office Club. I've been going to those events. Um you know, I'm I'm in on the radar Richard C. Wilson. He's the CEO of that. We've actually had really good conversations. And I've seen the world of the ultra wealthy and how these things trade and how money gets exchanged for projects. So I've been fortunate to get in that room where we have significant capital coming in and so I Now that I've seen it, I can't unsee it. I didn't have this vision 2 years ago, but as we progress, I guess I'm pretty good about pivoting where the opportunity presents. The opportunity's presenting. I see it. We're going towards that. I mean, even if we don't get a 15x, we settle at a 10x, which I that's going to be crazy cuz I've seen trades, you know, at 20 million for 10x. But 20 million EBITDA at 10x, but even if we do it that that's a billion-dollar exit. I'm okay with that. I'm not greedy. I'm okay with that. You know, I I split it up with my C-suite. any big if I have any doubt, Renan, about this this vision, which I totally applaud you for. It won't be that the the multiple won't be there. The multiple will be there from everything I understand. I And that's I've had hundreds of people It's going to be harder maybe that I would think it might be harder than it seems to roll up all these together. The integration, the what whatever. So it's it's actually just going to be able to and to do it on the time frame that you want. That's where And and then access to capital. Are you really going to be able to raise as much money as you need? Speaking of which, you you had said the the chickens haven't hatched yet. So, how much how much of this capital have you raised? Can we Or Wait, rephrase. Tell us what it looks like to have this plan, go to the capital markets, and raise the money to do it. What What does that all look like? So once again, you know, like I said I referenced early on, there is no spoon as far as the Matrix turn. There is no hard and fast rule on on how to build a a project or a fund or an offering or anything like that. So going through the the the certificate program, I took the best components of VC and private equity and I put it together where I actually had an a bit of an argument with my SEC lawyer. He's like, "You're giving away the farm on your first 10 million tranche." And I'm like, "Well, that's by design. I'm an emerging manager, never done this before, no track history. So I do kind of have Once again, how do I mitigate the risk of somebody investing in somebody who's never managed a fund? You make it that much more lucrative as far as the terms. So I did that and that's what got me into a lot of conversations and since then I've evolved and found my way into maybe direct deals or right now what we are working on once we close this 203 million dollars of private debt. And so that's one one thing that we're we should be closing July I'm sorry, June 15th. We're going to hear by May 31st how that's going. And then something I'm already signed up for is I I went to a JP Morgan big investment meeting and I met a gentleman that well, a firm that specializes in emerging managers. So they subscribed for 17.5 million into the fund and they did that as a a way to show other investors it's okay it's safe. He has his first investor. And they specialize in that market. They have a a mandate for it. They love the story. They they looked at the project as we did the due diligence. So that is supposed to hit I mean, that was supposed to hit two three months ago. They had to do a reverse stock split on their end. The program is still viable and then we're going to do this. They're called the beneficiary. If anybody wants to reach out and look you know, if they're an emerging manager and you know, I can put them in contact with them as well. But so we have 17 and a half there. We have 203 in private debt. And the private debt people is a multi-billion dollar family office that I met through Family Office Club. All goes well here, I'm going back to the well to build cuz these guys, they usually do like 5 to 700 million dollar for real estate development projects. That's their thing, but I'm buying cash flowing operating companies and this is like a home run for them. You know, the the risk is really mitigated because it's not a construction development project. This is cash flowing and it's strong cash flowing. So, you know, I once again, knocking on all the wood that we close on all of that and then take down these acquisitions. And when you say raise 203 million from this group for private debt, that's on that's kind of like a line of credit basically. Like you tap it as you need it No, no, they're they're deploying it over 12 months. There there's we had to sit there and and figure out how much we're going to need for the first 6 months, working capital and so we we were very uh you know, we put in the working capital. We put in a lot of things that we're going to need to not only acquire, but to make these things run at a higher level. So we put it all in and it's going to be deployed over the next 12 months. You're going to deploy 200 million dollars in 12 months? Yes. Like right now, I have 136 million dollars in businesses ready to be acquired. I told you about the California and Pennsylvania company, but there's a couple of other companies ready to rock as well. Just yeah. And I had to include that. I had to have LOIs, purchase agreements. That's all part of the data room that I had to provide because they're not going to give capital on a you know, on a dream. So everything's been negotiated. I've been hard at work. Yeah, no kidding. So are you mostly spending your time on acquisitions now, Renan? Right now on on this No, I'm I'm coasting right now to if I could even say it like that, meaning I put all the work and I'm still having a couple of investor meetings here and there. I'm waiting for the big money to to finish and I spend my time going in, you know, I'll go into Syndicate Building Solutions a little bit later, see what's going on. I kind of be around and just kind of try to take my mind off of the waiting game of where is this capital? You know, when is it when is it going to be here? When is it going to be here? I know it's coming. I've touched in with all the people. It's just waiting now to to close on everything. And then it's going to get very busy. You know, this year. Yeah. And just going back to your first acquisition, Syndicate, so your management layer after owning it for a year in the business and EOS etc. that those managers really are running the business for you. Oh yeah, we have a general manager. We have VPs. We have everything. Yeah. I mean, just yesterday we had an EOS meeting. I I pop in on those cuz I I mean, I still I'm a people person. I still like to see hear what's going on, you know, to see how EOS is being implemented, some of the ideas that are going back and forth. But yeah. And and so let let's like if you weren't trying to roll up uh these types of businesses across the country to 100 million dollars in EBITDA and you just wanted to be in the business this first business that you acquired, it which is kind of the the the standard story the standard story of a guest in Acquiring Minds. This would be a a huge success because a year and a half into this business that you bought for 100% seller financing that does 2 million dollars in EBITDA, you've basically you've made a bunch of changes. You had a scare there, but it seems to have stabilized and the business doesn't really need you. Right. And that's what I'm saying. I wish People ask me all the time, "Why are you doing this?" I don't know cuz I can see it. And why not? I'm 48 years old. Why not give it a shot at building something national and you know, I'm not afraid of that big of a a lift. I mean, worst case scenario, nothing else happens and I own this company. Exactly. Yeah, that's that's that's how I'm seeing it. That's right. So it's like, all right, I'm going to give it a go. I have a clear vision. I have an entire C-suite waiting to quit their W-2 to come over to work full-time for Syndicate Venture Group. And so we have all the pieces in place. We have strong opportunities, connections, networks, all that. The only limiting thing right now is capital, which will be solved in the next month or two. And then we'll see where we go. Well, we'll leave it there, Renan. This is a very fascinating path. as hell. Right? It is. And I I I feel we're playing a lot of something. on my part, Renan, just just so that you don't feel like I'm beating up on you. You know, it's just so like I said, those are such big numbers for a guy who's pretty recently on the path. You you know, I'm just I I I just got to I got to push on it a little bit, but I think at the end here what you've just said is like you know, you you bought one pretty sizable business. It's stable. 100% seller financing. You had 70 grand pretty much to your name or maybe you had more, but that was what you'd allocated to this path. And and and you've stabilized it. It doesn't even really need you. Um So so you've got you know, your downside is very I mean, your downside is a great great situation. You could just stop now at 48 with a business doing 2 million dollars in EBITDA and you've already won. Well, you see, this is what eats me up also because let's say the capital doesn't come. I have a strong sense of accountability to people. So that means that I you know, we've been doing diligence on these companies for 8 months, 9 months. That means that they now have to find an alternative buyer. That means that the people that we're going to hire to be part of this big vision, they're not going to be able to do that. There's going to be a lot of let down and I'm going to feel like crap. You know, about it. But I I ration like at least I have this company that I can you know, kind of operate and focus on and just live my life. But I'm I'm going to get I'm going for it. Great, Renan. Well, we'll be eager to hear watch your developments and hear how it all goes. Thank you. Uh and rooting for that 200 million to hit your bank account so you can start spending it. All right, if people want to reach out to you, how do you how do you like them to do that? Oh, I mean, our website is svgpe.com, Syndicate Venture Group Private Equity.com. Um all the social media stuff is there. I'm not a big social media person, but I do have a team for that now cuz I know how necessary it is. Um and yeah, you can contact me. I actually have my real phone number on there like a dummy. So I I'll probably change that. Yeah. Website, yeah. Email. You can access me all through that. Or if you want to email, it's Renan, r e n a n @ svgpe.com. Oh, great. Thank you for sharing that, Renan, and thank you for sharing this incredible story. Congratulations on uh Congratulations on the first acquisition. That alone deserves huge congratulations, but um on this even grander path that you're setting out on now. Um congratulations on the the hutzpah to do it, and best of luck, and I'm sure we'll we'll get updates from you. Thank you. Appreciate it. I hope you enjoyed that interview. Make sure you subscribe to the Acquiring Minds channel below. We are now publishing twice a week, so tons of new interviews and stories to come. Stories that will help you along your own path to acquiring a business.