boudoir velikapootie thank you for joining me today on acquiring minds hey will appreciate you having me on uh you're a serial buyer of all sorts of different businesses so it's a really interesting and so early career and in fact the joke at sm bash in orlando where we met was that you were the most interesting guy there so no pressure the headline to your story though is that you've owned commercial real estate a bar a gym e-commerce and fba business insurance software consulting business a sas business that is blowing up and most recently a sizable vending business in florida where you now live so we're going to spend some time on the latter two the sas and the vending but we'll get there i want to trace your whole story and walk through each of these ventures of yours so take us back as far as you want to wherever you believe this acquisition journey really started the acquisition journey i'd say it was really triggered starting on craigslist so back in the day i i really smile all of all fun adventures start on craigslist they do they really do so back in the day i spent a lot of time on craigslist from buying shoes i love shoes gym equipment this that everything that got me you know just the building blocks of how to use craigslist to buy my cars i bought and sold maybe a dozen cars on craigslist um not anymore but back uh back in the early days high school college uh early part of my professional career so what is that like flipping cars or do you know silence parts and then chop them up or what no so i actually just like all my businesses genuinely purchased them because they interested me and then for whatever reason would sell them so but it was a very short duration so never had any intent to flip i'm not a flipper in anything i've never looked at anything to flip it was purely with the intention to purchase and then well i want something else now and i want something else or for whatever reason i would sell it and i would always make a profit on it so that just got me into the negotiation aspect buying and selling the you know the basic fundamentals of how that process worked of hustling correct correct and so then a year out of college i was like all right i need to put my money to work do something and had started looking at real estate to purchase in my hometown in the suburbs of detroit i was looking at condos and suburbs and you know single-family homes then of course i was stumbling uh or running across craigslist and stumbled across a commercial building a three-unit strip for a ridiculously low amount and it was a fraction of the condos or the houses that i was looking at and it had three tenants so three times as many tenants plus a lot more income per month and so for me it just i'm just looking at the numbers this does not make sense this is a fraction of the cost but multiples on the revenue so uh actually and by the way it's being sold on craigslist it's being strikes me as it strikes me as a red flag so this was a 75 year old seller owner occupied building took care of it been in his family for decades and ultimately bought it for 20 grand and so that was my journey a three unit retail strip in the worst parts of the city of detroit a few months after they the city had filed for bankruptcy but for me it was a beautiful red brick building with some fire damage on the side and a lot of abandoned homes adjacent to it but for me it was just beautiful had two great tenants and got that occupied and that really started the journey i did everything from the legal account let me let me let me jump in really quick so what neighborhood exactly for people who know detroit this was seven mile and van dijk seven mile in van dijk okay so if you don't know where that is just check it out if you're just curious just google it seven mile and van dyke and that is where my property was and this is the part of detroit that i mean i remember first of all what year is this this was 2014. a year 24 years out of college at that point okay okay and it was around that time or maybe a few years earlier where detroit was just getting so much attention for the abandoned homes and the the um ruined porn you know people would go there and take photos of old you know old abandoned buildings and stuff um so and so that's kind of squarely where this property was in that sort of that side of detroit okay go ahead yep and and i say all that just because that's that truly was the fundamental for me and that was it was all you know the cars and spending time on that and spending time on that platform on craigslist and then finally purchasing this with no attorney never seen a lease before did the entire lease did the entire purchase agreement myself went through that entire acquisition process i had to sell my car to liquidate enough cash to be able to get that cash because 20 grand was a lot so i put in all the cash that i had uh sold the entire building was 20 grand correct correct wow okay and i was generating about a thousand bucks a month got it up to 1600 about 1550 after and so even to get that 20 grand i went to chase bank to get a loan and they laughed me out one you're in the city of detroit it's a commercial building we don't do loans for 15 grand you know i mean they were just all these little things that i didn't know so anyways cash it out bought that that was three units slowly became a few dozen units and simultaneously during that process i was always on craigslist right because i'm looking at commercial buildings now not just their housing section so i would go into their business section to look at all right what are these business owners selling off are they selling off their commercial land or commercial buildings so i came across i was just looking at these ads and i'm like they're selling a pizza shop they're selling a restaurant they're selling a bar at about the same price or you know considerably more than what a building would cost but it's obviously generating a lot more profit so huh you know and i'm i'm always curious so i'm like all right let me check this out so um so i started with exploring a pizza shop then a restaurant those fell through and then i was involved with the acquisition of a club for a very long time about 11 month period and put in my money in escrow did everything did a lot of diligence learned a lot but it was with multiple people it was a multi-million dollar purchase and i was a little guy i was a brand new guy fresh and didn't know much but i just was not confident in in the peers that were involved in that transaction so i said you know what i'll step away you guys can do what you want to do i was the only one going through the operating agreement the only one reviewing all the legal documents and you know the only one that seemed to have a certain level of ethics in an industry that i think really needed it so i was like and was this another deal you found on craigslist it absolutely was yeah and these other investors are co-buyers alongside with you they were who were they so this one guy who was kind of spearheading the project he had made the post and said we're looking for an investor i jumped out and said you know what i'll be involved and you know there were other club owners that had other clubs and there were managers and other people in the industry i was the only outsider coming in but that ended up falling through at the last second and i had moved on and said you know what i'm gonna do this by myself let me try and tackle it so a few months fast forward another deal falls through the cracks another bar and finally i'm sitting over in europe with my day job and i see this bar come through in the heart of detroit downtown right next to our nhl arena and i'm like holy cow this is so close by i know exactly where this is uh former red wings owned the place and i'm like all right i'm gonna go check this out so i flew back and went straight from the airport to the bar checked it out i loved it it had just amazing history and it was a dirty grimy old bar but just such rich history which absolutely i just fell in love with the history household and yeah yeah i put in an loi and four days later had a purchase agreement with down payment and everything ready to go and we got it signed within four days of seeing it so now okay okay okay okay okay hold on here so at this point you own you said your real estate portfolio has grown to dozens of units uh a few dozen yeah just a few dozen and they're all it's all commercial correct uh mostly commercial i had a few residential that i was dabbling with but mostly commercial um mixed use and light industrial as well and are they in the same parts of detroit like they kind of challenged parts of detroit correct they were and then i had some out in the suburbs a little still in the southeast part of michigan but yeah okay well i mean i we we just gotta keep an eye on the clock here but i'd love to ask you more about what you learned in ownings and just being so exposed in these you know challenging parts of town um that people often kind of don't want to touch and that that's precisely why the real estate there is so affordable but i guess we'll have to leave that for another time but meanwhile okay so you've built this real estate portfolio um and all the while you have a day job so what's your day job so i worked in supply chain management primarily on the procurement side for aerospace and automotive companies worked at three companies before quitting in 2018. okay okay um and so you on the side were doing this because you wanted to eventually leave the nine to five or because it was just fun and it piqued your interest kind of like what you said going back all the way to your car buying or yeah or what or had you always envisioned being an entrepreneur since you were a little kid or what like what's yeah why why are you special in the fact that you're doing this because you are special and it's not something most people are doing yeah i think i was always a hustler even growing up as a kid i would i know little things like selling my homework for 10 cents or a pack of gum or you know selling arts and crafts in elementary school but all the way to um my very first internship professional internship i just looked around did a 360. i was 20 19 or 20 at the time and i'm like all right when i'm 40 50 60 years old i'm not going to be one of these guys you know there's just no way i can't i can't envision myself in this environment and i absolutely hated it i just was so mind-numbingly boring that i started that summer actually googling i don't really know where the word passive came from i don't know where i learned that word but i just started googling how to make money passive income or you know maybe one article led to another and i was looking at uh little candy routes uh like vending routes i was looking at being a taxi driver i've never drank in my life so i was like i was already dding a lot of folks so i thought oh you know maybe i could start a taxi service but why not monetize exactly so i was always thinking of that stuff and then never ended up transpiring into anything and then once i got my full-time day job i said i need to do something outside so that slowly i can start to generate income and then maybe one day i can make enough money to eventually quit so that's where i was looking into the real estate and then you know i think just the curiosity of purchasing an actual live business yeah made me make the switch yeah yeah it is super cool um and at this point so we're going now back to when you this discovery of the of the red wings bar um your real estate portfolio how much is that putting in your pocket every month about five grand five grand six okay okay has that has that are you making more money in your day job or has that matched your day job salary um right around that point i was i think i was making like 75 um in my day job so yeah about comparable approaching yeah approaching it yeah yeah cool okay so this bar so you um you what did you say it was four days the whole trains that you from the moment you walked in the door and fell in love with the place to to the transaction itself was about four days to assign purchase agreement with down payment yeah about four days so tell me about um just really quick because i i i know i have the fantasy and i suspect other people do too of owning a bar and not a fancy one um a high profile one but one exactly like what you just described like a a hole in the wall that has history that makes me feel like i'm i'm you know have a a watering hole that's my own that is part of this bones of the city that i live in i mean it's just to me it's also just such a cool uh kind of fantasy but i'm always like whenever i've shared that with somebody they're like no no no don't fall for that temptation just go to that bar don't be the owner of that bar that takes away all the fun of it because owning a bar like that is crappy is is it crappy or was it a good business talk to me about the actual business itself running this business so i so in hindsight sitting now i absolutely love the experience but i'll say that about every single business that i've owned good or bad but the thought process leading up to it was all right i've just come away spending a year on this club that i was working on and i wanted to buy this multi-million dollar business as a part of the group i didn't know enough to actually go through with it i was not educated in the nuances of the industry so i was purchasing this one by myself at a reasonable amount that i could afford purely for the education so i had purchased it knowing that it may not make me money and in fact it might even lose me a couple bucks best case scenario i make a few bucks but it wasn't for the money so it was purely a a learning opportunity experiment yep an experiment it was more of a project yeah because uh they demolished the old arena and they relocated it so i knew that it was only going to be a one to two year project and so i was like this is the best way to get in i can get in i can still liquidate for what i sold it for and all that the action the actual economics i did make i was in the black by a little bit as far as the actual operating income but overall the project costs i did lose a few bucks because i got hit by the landlord so that was another story where they kind of just got me from both sides i wasn't able to work through the lease i could not extend it to bring on investors to build out and actually make it a full-scale restaurant as well as sports bar and they also just didn't allow me to continue operating there and they wanted to kick me out so that they can demo the building and erect a two three times bigger building there so but overall i was very happy with the entire purchase i learned a ton i mean that was if i did not do that i would not be sitting here today because that made me go through the entire process of acquiring an actual living breathing business by myself i had no seller transition support i had no bartenders on day one um i'm never drinking my life you had no bartenders on day one yeah yeah wait you had no bartenders where was your staff for the staff of my crisis so yeah no but i mean why didn't the bar come with staff so the seller notified the previous staff in a kind of a poor way and they were pretty ticked off they would not retain on ah there was no hard feelings um i never still have never met any of the staff but it was just not done in the in a proper way so the staff was ticked off and i was just kind of left to fend for myself and so tried to find a bunch of people on craigslist and finally got one guy on craigslist and then found another bartender from a friend's bar uh man craigslist solution to all your problems um so and okay so and just if you remember the numbers roughly uh like what like how many seats does the but this bar have and so for a bar of that size with that many seats like how much does it how much revenue does it generate in a year just curious it was very small because it was more event-based so this was a very tiny acquisition but i want to say about 75 seats or at least fire capacity it did not have a kitchen in there so we would do little oddball things here and there getting free pizza getting um a food truck vendor getting a small chef to bring in his own food little things like that and then have miscellaneous items that we would sell as far as top line i think we were just barely over 100 under 200 for the season so not a whole lot at all for a season yeah no no but with a one-and-a-half bartender and very low op x it was it was decent cool and you're still in your day job doing this so this is all on the side i would work uh i guess nine to five and then come back open the bar and then stay till especially early on stay till past 2 3 a.m clean up and then go back to work the next day when i was working in mexico or europe for work i'd have my pos completely on my phone and so i could see all the financials and then i would also have the cameras on my phone so i could see visually what's going on even when i'm halfway around the world and so when you're at home in detroit how many days a week did you go in there after your your nine to five was done uh early on it was almost every single time we were opening up every day and then slowly got to be it got to a point where i wasn't going in except for once every couple of weeks okay wow cool and so okay so the landlord basically wants you out of there after how long so so you you you sell the bar no i guess you have to close the bar down because i closed down and then i finally sold it so i kept the entire space or i guess i was there for about a year and a half a little over a year and a half and then liquidated what i could sold like uh liquor license at the assets and all that okay okay and ultimately lost a little some lost money on the overall investment right right but gained years of experience yep cool all right next acquisition uh simultaneously while i had the bar i was on craigslist looking to buy a building or something i don't know what i was doing and then saw this gym that popped up well i was looking for a gym before and you know it kind of got away from me and this one i was like all right i'm i'm gonna buy this this was one of the hottest gyms around the area it was it was a franchise gym with snap fitness and it was one of the hottest ones in the country actually and i was just excited you know a bar i couldn't really relate i used to work at bars in college but i don't drink i don't party like that i don't you know it's not my vibe exactly i i'm not a good bartender either but i used to be a personal trainer i love sports i love to work out so that was more of my environment you know so i thought i could be at least as a business i could relate a bit more so i was extremely excited for that i bought that and it was also another one that i had to purchase cash i could not get financing because i wanted to close within three weeks of seeing it so from end to end working through a franchise all the little things that they make you go through and then to actually close the deal in yeah less than about three and a half weeks from seeing it and how much are we talking here what was the sale price that you were going to put down but just spend your own cash out of that i bought the gym for 75 grand 75 grand okay not a whole lot but that strikes me yeah it strikes me as not a very high price for what is ostensibly a a wildly successful gym so it took a very big hit it was making about two and a quarter two and a half um or almost two actually and they had the price up significantly higher and then it took a massive hit because in la fitness moved in right next door and so i got in right after thinking okay they've already taken the hit the damage is done i can come in and this was a corporate owned location as a local owner i can do a lot better and they had it for 200 and i negotiated with the private equity group that had owned the franchise down 275 and it was making 50. so it was a pretty good multiple even for 2017 so i was like all right that's terrific multiple it's a little you know additional cash this in addition to the bar in addition to the real estate plus my job this is all you know just slowly aggregating a few bucks here and there so yeah i was excited for it yeah 75 grand and it was throwing off cash flowing 50 grand so that's whatever one one and a half x um and and so is that how much a gym makes like what what what is the revenue on a gym like that i mean how many members how big and what is the revenue square footage was only 2 900 square feet um in a prime downtown location in a small suburb of detroit and it was doing about two and a quarter gross so about okay okay a little under 20 or over 20 so our gyms um i mean i i know it's hard to generalize they're such variety in gyms but 200 to what you said 2 900 square feet so is that a small gym or a medium sized gym so we were compact we had that's a very everything um extremely close tight knit but we had all the equipment jungle gym all the cardio equipment we had a little yoga studio with a punching bag in there and a tanning bed everything in there so it you could do everything from kids starting off um you know the a leisure athlete or leisure uh person wanting to go to the gym and see the results all the way up to pretty big meatheads you know that are cranking out quite a bit with the weights so we saw the full spectrum and it was it was very convenient it was a 24 7 style you have the key card can come in whenever you want okay okay great and so how did that that acquisition that was great that was i was able to sell it for about about two and a half times what i bought it for and sold it actually that was one of my favorite ones because i sold it to my gym manager and so he was actually involved with the gym since day one as a patron turned personal trainer turned assistant manager turned gm then i had acquired it retained him as a gm and his dream was always to purchase or own his own gym and due to financial reasons and background he was not able to get financed by the sba or even other um avenues that we went down so i said you know i'm gonna seller finance the whole thing so i hooked him up with my cpa to put in the down payment in conjunction with him and they together purchased purchased the gym and is he still paying that off what was the term of the 100 percent finance so it was i believe it was a 10-year am five-year note and they paid it off during covet uh towards the end of 2020 and i actually did give a relief on on the payment because obviously covet took just a massive hit and i i relieved them of a good chunk of the remaining payment really very generous of you um and why did you want to sell it at all i was so i quit my job i had just spent a couple months a few months overseas in southeast asia with anticipation of living there and then i got too bored and came back and then i was like all right i got to do something else wait wait wait this is the thailand thing i want to i want to dig into that so um so hold on a second um let me before we go actually let me ask you another question so um you know you've acquired this real estate portfolio you bought a bar you bought a gym um we're talking you know the numbers and how you're feeling about these businesses but there's a lot of management involved in this stuff i mean these are these are people businesses how how are you finding that are you are you like i mean i feel like a lot of people would just be pulling their hair out with bad tenants and bad managers and bad bartenders and bad personal trainers and so on so yeah so talk to me about your experience with all of these people who are now part of your you know your your portfolio of holdings and that's probably why i got no here but um all right you did pull it off no it was so for me the way i manage it is extremely hands-off and i like to be super chill i first and foremost want to be happy so i probably going back to the bar for example that i told you i was in the red overall on the project i could have been in black i could make made a few bucks but i chose not to because i didn't want the headache to make a few extra bucks that came with it so and same with all my businesses even today you know i could probably be cranking out a good amount more but it's just not worth it to me at the end of the day so yeah i took that same mindset and maybe back in the day as a kid it could be called lazy and now it's you know i try to call it being efficient or passive or delegating but i streamlined the entire real estate process where even though i'm in such an environment i did not deal with the tenants that much i did not deal with the transactions with the with the i mean i was doing docusign in 2014 with my tenants that you know barely used email that did not really have a bank account or not really they didn't have a bank account so i was docusigning the leases i was accepting payment for rent only at my chase bank which chase bank was at every street corner in detroit so little things like that anytime i needed something fixed i don't know how to pick up a hammer literally so i would go on craigslist find some dude have him go out to the place and just invoice me for it so i mean of course it was a lot more challenging than that during the early days but once i got it set up it was fully streamlined and then i moved on to the bar once i got it fully set up my manager in there my bar manager had the video camera set up the pos i knew what was going on the purchasing was there he was i gave him a lot more autonomy i moved on to the next thing and bought the gym the gm was in there doing such a great job i got him more personnel and once i wrapped my arms around it did a renovation i kind of handed it off and i actually went into the gym for example with the mindset of all right i spent about three months heavily investing into the renovation and updating this place three additional months where i've slowly eased off and then all of 2018 i'm going to pretend that i'm like a million miles away and don't have access to it physically so i only went in physically into the building that i lived 22 minutes away from about 10 different times i think and i remember remember counting i think i spent a total of 10 hours or something and that's including working out at my own gym that was 20 minutes away that i would go out and eat next to go to a competitive gym right next door go out to the bars next door but purposely did not go to my own gym because i wanted to manage it as if i was foreign to that location and so i'm just kind of setting myself up for the future so kind of like that i that's how i manage it and this is all while i had my job i was sometimes in mexico and in europe or wherever that i had to travel to so i would always set up the operations give as much autonomy to my team as possible and be extremely content if they were doing what they were supposed to be doing and i wasn't getting any headaches i didn't really care that much as long as the financials looked on par and they were chugging along and doing okay yeah so you don't like at the gym you don't you're not in there looking at every little thing i mean even before you did your your your test to see if you could run it remotely um you really just kind of like look at kind of you treat the financials as kind of a dashboard and as long as that dashboard is showing you the numbers that it should everything that happens you know behind the scenes or in in the business itself you're you don't need to know about the general manager is handling it and the litmus test is always just those financials um i would say yes more so in the early days but what i've learned throughout the years is sometimes it's screwed up in the financials before you can even see it in the financials so by that i mean there's a lot of leading indicators that you won't see in the financials which i think in a lot of cases can be a lagging indicator and most cases are so i want to make sure that certain things are nipped in the bud so i will keep an eye out on certain elements and just kind of poke in and make sure and i didn't even know what the word kpi was back then so but i would look at certain attributes and certain characteristics if they're being followed or not and based on that okay if i'm doing that operationally and making sure that whoever i put in place is doing it operationally then yes then the financials can just be as simple as that just a dashboard and as long as it's doing well it's it's good and also the i had a slightly different mindset these businesses were just investments at that point if i bought the gym to make 50k it better be making 50k i don't care if it makes 60 because it's just additional cash flow every single year whereas now it's slightly different mindset but that was that also factored into it back then because i had at that point three four different income streams so in other words you weren't trying to optimize this business to a t you just as long as it met your nut or what you expected it to your 50 grand you were continuing yeah i wasn't looking to scale it at all yeah it had to be completely on autopilot i just wasn't looking to scale at that point though okay all right so you you've got these these multiple income streams and businesses you at this point do decide to quit your day job yeah finally finally we're 35 minutes into the interview and you're still you're still gainfully employed okay so you're finally uh going all in with your businesses and you go to thailand to uh sit on the beach and you know do whatever live the life and and you find that it what it was absolutely bro boring i mean i i just i just absolutely hated it i think so i went for a conference for one of my ecommerce businesses that i bought after the gym and went to go meet all these entrepreneurs around the world amazing retreat a great group of guys met folks that had seven figure businesses eight figure businesses and i was just that little guy with a tiny six-figure econ business but and so that just gave me such a like rush of just inspiration just uh people that spoke my language like this is the first time i got out of the detroit bubble i couldn't relate to anyone and here i am with international entrepreneurs that have been there that know what i do and kind of on the same vibe so i loved it and then i spent a few more weeks in thailand sitting there on the beach probably 10 feet away from the water just in my bed looking at the beautiful sunset and i'm got my laptop out looking at the dashboard for my p l for the gym and the real estate bank account and i've still got the three businesses running three full-time incomes coming in but it was just so boring and i i just could not be motivated in that environment i mean i was living the four hour work week lifestyle except i was working five hours a week yep and it was just um i knew at that point okay i worked so hard to be able to quit thinking that it would be amazing and thinking that i could take a year or two off just to feel out what that next big thing would be in my life and i just realized at that point i got to do it now i can't wait that long i got to be doing something i got to be learning i gotta be putting my mind to use or at the very least i gotta be around other ambitious people that are doing cool stuff so that at least i can learn awesome man so you get that so you fly home um wait wait actually we didn't hear about the econ business so what was the quick story on this econ business that you were now an owner of yeah so i bought a an econ business uh there was a local business that i was looking at but um that fell through there was another pet grooming business that i was very close to purchasing that fell through and then stumbled across this econ this amazon fba business selling hats women's accessories bags purses um gloves various things like that about 800 skus and i was like all right this is great deal great multiple amazing and i just negotiated the heck out of this thing and closed on it got it i see my first check come in and it's nothing i actually owe money because amazon amazon seller central account had a lien on it because there was a loan that they had taken out i did not know about this loan and so every paycheck that i was supposed to get from or the payout that i was supposed to get from amazon it was being debited to pay back the principal and interest so that was a dispute that was something that one in hindsight yes i should have done more diligence on known more about this amazon business and the seller central account to be able to go and find that in diligence and then that was just the start of a myriad of things with the seller he hijacked my account threatened to sue him with cyber crime with the fbi and he for went a six-figure seller note long as i paid him 1632 or something like that it was it was somewhere in that ballpark spoke to his ex-girlfriend and she was like yeah that's his that's his drug money so he was uh found out he was a felon had some drug issues and needed literal exact dollar amount for that day itself he's like all right i'll give you the login credentials back that i hijacked and i'll also give you i'll sign off on the remaining note that you owe me so we did that and it was just and he stole he piggybacked off of my listings on amazon that i was ranked number one for one it already took a hit because they were out of stock because i was having cash flow issues even prior to that they were out of stock that hurts the listings cash flow issues you couldn't rank higher and then finally he was piggybacking off of my listings and undercutting me so all directions i was getting hit on this business and so that took a pretty pretty large hit and ultimately sold it and liquidated to the best that i could and what were some of the numbers on this business what did you acquire it for what was the revenue and profit at least that this guy was saying yeah so it was prior year was trailing 12 was about five and change and it had done uh the number that i came down to was 160 during diligence and then i had purchased it because it was going on a downward trajectory so i was like okay you know maybe i can expect to make about uh about 90 to 110 that was like my rough guesstimate uh ford looking 12 so i offered him 180 90 down and that was and so he was carrying about a 90k and note plus a few other little things here and there so i paid him 90 and then i did not pay him anything after and i told him you got to write that complete note off so um yeah so it was a decent sized business it still had some legs to it had i i never seized that business to be honest by the horns and just really took it i was hoping that i could make that whatever it was 80 90 100 grand a year in addition to my other businesses and job and where did you find this business and i know this one was not craigslist this was not craigslist this was online i was looking i finally got the bug after listening to a lot of these authoritative online brokerages for years and i'd i'd rather not say their name okay because sure but it was one of the it was one of the well-known bro online like online business brokerages oh it was not um no i sold with uh i sold with empire flip person that was a great experience overall that was where i went on the retreat but this other smaller brokerage i mean people would have people know it but it's a relatively smaller few few person operation and the second i would say it would ring a bell to most people that have done diligence on this i can just say that the purchase price was 400 and then ultimately ended up being 90. the sde was like 2 250 ended up being like you know about a hundred so if you've ever done any diligence on any of these brokerages you probably know the one that i'm talking about because their top line is always off their bottom line is always off their sales price is probably half by the time you buy it and even then i would not suggest buying off them okay all right um well you're not gonna you're not gonna say who it is but people people will know who who know the space um they can dm me but i just don't to put shark bad yup um actually and that reminds me of another question i wanted to ask earlier um going back to craigslist so first of all do you think that people today in 2022 like legitimate business opportunities can be found on craigslist still i'm not gonna say no but it's getting increasingly more difficult because back when i started in 2014 with the real estate these were a lot of this was really i mean a lot of the businesses and real estate i bought were from 60 70 80 90 year olds so they were like screw the broker i'm just going to list this thing on craigslist because i kind of know how this thing works but even then i found a lot of this stuff because they were miscategorized so you had housing that was in the business section you had um like even in the housing section you had misclassified like apartments and commercial commercial and apartments i mean just uh poorly constructed ads where unless you were scouring it every single day like me you would not be finding these things so right now it's been super fragmented with facebook marketplace and actual brokerages i mean brokers are real estate brokers or business brokers they're just picking off everything you know not just six seven figure businesses but even the little tiny stuff they're they're putting their name on it and trying to broker the thing so it's gotten a lot more difficult and it's and it's gotten difficult because there's just there's more competition for craigslist so people are putting businesses all over the place but the idea that you could find some diamond in the rough on some site that wasn't let's say biz by cell you think that still exists like people should be looking in these random corners of the internet for stuff a little bit yes but i think that has even gotten more difficult just because i think people are more aware that their business does have some value i think there is a little bit more education around that and whether it's not directly for you know a 75-year-old seller it could be their grandkids yeah telling them hey i think you should actually go with a broker and actually market this thing properly instead of selling to a kid off craigslist and were you looking at biz by sell at all during the time when you were looking at craigslist for businesses i was i was heavy on bus by sell craigslist uh just a lot of these oddball places okay and as well as some brokers locally okay okay um so back to the e-commerce now we we are we haven't even gotten into your two mostly your two most recent businesses so we're gonna have to um accelerate here but take me through just quickly if you would from the e-commerce business to buying the what happens between then and your bride and story so yeah yeah so i sold the ecom company and right after i had purchased minority ownership in a an insurance software consulting company and this is what i had moved out to texas for moved down there took over this office it was a 20 year old company the team in their former lives had created a software that they had eventually gotten acquired by oracle and that's the consulting firm that i now have a monopolistic specialization for but it's very very very very niche so enter oracle would sell to one of the top insurance carriers and we go and do the implementation as a systems integrator so had that business i was running it and coveted hit enterprise sales took a pretty massive hit all sales were put on halt and at that point i was really looking all right i gotta work on my next thing you know this this company is very tough because i was a little captive to that product yeah that we did not own oracle would not sell it back to me i tried but a large corporation like that will not divest any ip so even if it was garbage them there's no r d they still will not divest it and meanwhile there's hot and sexy startups coming up putting in billions of dollars of vc capital uh going public and competing with this little product that i specialize in it just uh we weren't able to compete so it just just to be to be clear for people this there was an insurance industry product oracle acquired it and then the company that you bought into this consultancy were specialists in the implementation of this insurance product so oracle would feed you all a lot of business correct to go and do these implementations but you had no ownership over this very niche piece of software that oracle held and would never let go of okay okay i had to go in and say you know what oracle's not selling so let me go and try and sell that was one i was pushing my entire team which was business development one the very first developer the very first business analyst the second business analyst i mean my team had developed that product so we had the foremost expertise in the world but it was a decaying product and so i was like all right i gotta i gotta diversify this will always be here if any client wants to come in it'll be a pretty hefty contract yeah but if they don't then we're sitting here twiddling our thumbs and doing nothing so let me go on move on to something else and even till today it's still very much in the same state but so then i went on looking to buy a business for i was thinking online you know i've got a few bucks from selling the gym selling the real estate let me go look online for any sort of sas company any sort of online business and could not find anything i was like this market is heated uh this is right after the pandemic in early to mid 2020. and where are you looking micro choir everywhere i was looking everywhere i've got about 20 plus brokerages and forums and private just groups friends groups and things like that that i'd network with and uh so i was looking everywhere um and i just could not find anything and finally at the end of 2020 i was on micro choir and saw one pop up that kind of looked like it was something that i should be doing and this was christmas eve i think two hours after he had put it out or it went live i reached out to the owner uh contacted him directly had a few conversations with them via email and the very next day spoke with them over the phone as well over zoom and had an loi and then eventually had purchase agreement within a couple days and closed the entire business end to end i think it was five or six days so christmas eve till the 31st you know we closed on before the new year and tell us about the business including the size because this really was a micro a micro acquisition or a micro sas yeah so it was a five figure business it was doing 2.6 k in mrr uh it was probably 30 grand a year and so okay services so yep so it's uh us-based virtual assistants so kind of think you know you don't want to or you can't purchase and you can't hire a contract a full-time virtual assistant so you do it on a fractional basis for five hours a month or 10 20 40 whatever it is and we're more tool oriented so it's not just your data admin and although we do have that the executive admin it's more oh quickbooks or salesforce or you know zoho or you know various tools that you want so this is more geared towards the online business owners but we do get a lot of small business owners and we rank you know pretty well for certain keywords uh for small business owners too like for example quickbooks but um anyways bought that 2.6 k mrr at the present like prior to three months average and trailing 12 cash flow was 24 grand so but for a pretty good multiple i knew at the time that i was buying it i had you know gotten a pretty good deal because it wasn't just a financial plate it was i thought it was a great base there was a lot of r d put into it a lot of blood sweat and tears that had gone into it and i knew that i could build off of it so i was pretty excited to be able to get the actual technology aspect of it the platform the product as well as everything that was laid out and now we've grown it considerably considerably since but it was just such a beautifully laid out business and foundation and the seller it was just such a great opportunity to work with the seller he had it was the best seller transition that i've gone through sops tutorials this that everything it was just so well done even for such a small business and but i think going back to how i closed that i think one point that really sticks out and also if you notice the same thing that i did at my bar i close immediately or like if i if i see something that i want i will put an loi down put a purchase agreement down and i know exactly what i want so i'll act on it quick and make sure that i close within a short amount of time as well and your point is you think that that favors you among sellers definitely definitely um my little catch phrase was uh what was it i will close within or i will i'm a cash ready buyer that will give you an loi or purchase agreement within two email transactions so i've got a set of questions you respond i'll follow up with another set of questions you respond i'll either tell you no save everybody their time or i'll put something on paper and make it official so i think that speaks volumes to a seller that's sifting through 150 or so messages on whatever platform you're using especially one like mike require where you get inundated with a lot and you're trying to sift through all right who's who's legit all right this guy's actually asking me specific relevant questions seems like he's got experience seems like he's got cash and he says he's going to close within two email transactions so you know it's um something that's definitely very attractive to a seller oh that's a great tip um i i actually thought that what you were implying earlier around the timing that this was christmas eve was that there just weren't other buyers active so you got in there because because it was you know christmas and you were the first one to jump all over it while everybody else was out you know being married uh with their family i actually think he had christian stuff so i actually think he was if i remember correctly i was like the fifth person to talk to him so i think there were actual other conversations that were had and people are offering even more than i did and so i think it was more about having the right fit connecting once you get that face time really making sure okay this is the right person because they were so relevant i mean especially if you're talking to a founder and this this is their baby you know so you got to make sure that you take it into good hands and and so i think i was able to convey that and um in this case and say you know i will do x y and z with it and really work with you to transition well two follow-up questions you had said the revenue you set the cash flow 24 000 over the previous 12 months what was the number correct okay and you acquired it for uh it was a five figure range okay and um so it was cash flowing 24 or 25 grand for the for the for the previous year 12 months trailing 12 months but um how much revenue was it doing it did 44. but okay 445 000. 44 45 000 and then 25 000 of that so whatever 60 um margins but but um so are you not including like how does it work so if i if i it's a way for me to find a a virtual assistant for 10 hours a month and i'm paying that virtual assistant 25 an hour or something 20 an hour um is the is is the byron taking a cut of that or what how did how does the okay yeah so you're you're paying you're paying byron our team that let's say 25 hour whatever it is and the team is in-house right so we are paying our team members and so it's um it's essentially like a staffing agency it's like yeah uh your back office team i'm you're contracting it out to us and and then we are paying our our individual team members gotcha okay interesting there's a margin involved i mean obviously we're we're going to be taking a cut of that yeah and and paying that on but just to make a note of that our martins are not 60 on the individual talent that just happens to be because there were a lot of pre-orders or a lot of prepayments that had accrued or unused credits that had accrued over the years uh okay that makes more sense because i was just going to say a service business with 60 margins sounds yeah yeah especially you know kind of i assume it's kind of lower end uh you know lower hourly wages not higher higher hourly wages so but interesting model so it's not a platform it is it's as you said it's staffing it's your own people that you're deploying correct but we do have our online platform and that's where we can't call it a true sas but that's where kind of the sassification aspect of it comes in where the team is fully utilizing especially all short-term projects on our platform and they use that for communication they use that for requesting the projects for requesting an assistant and doing everything time tracking tool management all that when you go more towards a full-time assistant then they really start to get onto your platform and use your email you come up with an email get them on your slack channel get them fully integrated with your systems but that's because you're leveraging more of their time but if it's on a short term basis um almost always they're going to be utilizing our platform okay all right so when i characterize it as a sas um that's not really accurate it's more of a virtual assistant staffing business that has this online component so so the the job management um is done in the cloud that you've built custom software for unless the virtual assistant is doing like 40 hours a week for the client right in there yes it's a product service what's uh with the platform and so the seller founder um sounds like as you said they'd built a really high quality service here product i service and and tech to back it up um but just didn't what just burned out or just didn't see that it could get they could grow it to how they wanted to why did they want to sell they did not spend as much time on it and as that was happening they um started working on another project that they got and so they started divesting their time and resources on byron and worked towards their next project and um rightfully so because it was starting to take off and so that was kind of the reasoning for divesting here but definitely acknowledged that it had a lot more legs to go off of and a lot more potential it's just uh the lack of time okay okay yeah well that that does sound really appealing as an acquisition okay so then what happened after that this is where things get really juicy so right after that so i bought it at 2020 gen 1 and i did not want to take care of it i took over transition and all that but simultaneously this time period about a year and a half ago i was living in mexico and working on finding my next business so this one i only bought byron because it was a little test run it was uh hey you know can i do this again i've had a few misses here and there i wasn't fully confident like can i go out and buy a massive company i need another i need another win under my belt can i do it the right way and so can i do it as well can i source can i work with a seller well can i you know do all this and so this was a great opportunity to execute and i did and i felt great and with that momentum i was like all right you know i feel pretty good i think i have taken all the lessons learned of my previous experiences and learned from them and you know there's obviously i can make new mistakes but i'm not i'm not going to be making the same old mistakes again at least in the exact same manner so that's what byron was and so now i go into mexico to spend some time and just kind of chill out and really work to find my next company two months in three months in i was starting to look at pretty large companies and i could not spend mentally the time in investing and learning and really working on byron so i was like all right i need to find somebody to hand this off to you know i didn't spend much on it it's making me a couple bucks a month it's something that i see potential but it's not something that i can invest my time in today especially when i have much larger businesses in the pipeline so someone had reached out to me on twitter and ultimately after a few conversations decided you know he should be the one running the company so given the opportunity to take over fully and it was a structure where it was kind of phantom equity where any incremental growth he would be getting so i did not give him any tangible equity it was just anything incremental and so that was his incentive and he we were working i guess for another few months and sometimes summer of last year is when we started getting a few more sales few more sales and then q3 q4 of last year is really where it took off and we've grown considerably with new accounts new customers new requests and primarily one larger customer really took off and so that really helped create the momentum that we have right now with byron and so put some numbers behind that it was two and a half thousand mrr when you acquired it what is it right now we're about 45 000. phenomenal so two and a half to 45 in what a year yeah it was uh or a year minutes 40 in about a year and then right now in the last few months just a few grand more but i still think it's got just so much potential that we're really trying to find growth hacker marketer seo person i mean just anybody can that can really help us on the marketing aspect and generate new leads for us so and who is this big customer that just blew things up and is that really where the vast majority of the mrr growth has come from uh significant chunk does come from them as well as we've been getting a whole bunch of new customers but this is a pretty large customer that works in they are a vendor to only fans and so i don't know if you're familiar with them but they are uh yeah i'll just leave it at that they are vendored to them and we are fulfilling their contracting requirements to help this vendor than assist only fans and so as only fans has blown up so have their vendor basis their supply base and as a result we're one of them tier two to them i guess it it it seems like you could be an obvious acquisition to this this vendor this only fan's vendor um we could we could uh but i think we're uh slightly different i think there's a few folks that would find us a bit more attractive that are in the employment staffing hr job board niche and uh so a lot of those folks are kind of who come to mind and some of the people that have reached out to us for an acquisition the phantom equity can you walk me through that yeah so so they earn what if they grow it how did that work yeah so we did a 60 40 split so let's just say for numbers sake we valued the company at that point when i handed it off at 100k let's say anything incrementally over that every dollar will get split 60 40 60 my way 40 his way and that's it it's as simple as that upon liquidation so upon a liquidity event and so if you know even if we divested half the business at a million then we would split the incremental 900 000 6040 and we would still retain on to the remaining portion of the business but i looked at that and what if this individual leaves prior to a liquidity event it would be vested after a year so i did a pretty short vesting period just because one is a working a pretty good job he gets paid pretty well and i was needing someone to really come in fill in take over full operations for me so that i did not have to do anything and so there was a one year vesting period which i thought was pretty pretty long for a very very tiny company and so it uh it takes a certain type of individual to vest that type of time without seeing um you know nothing but a few hundred bucks during that entire time so yeah so i was pretty grateful for for all of that and i think it really works well for all parties because it's it's all about the growth everybody's in it for that long-term growth of of the company and that potential exit sure sure you said you were explaining why you did this byron acquisition um and it's hi byron is the url hi byron.com hi byron.com yep yeah this byron acquisition a large part of it was just to kind of um you know do another acquisition on the slight slightly smaller to feel like you could um you know you just kind of sharp keep your knives sharp and build a little bit more confidence you your confidence had been kind of um depleted from i guess the earlier recent deals that you were coming off of so just to clarify that was the e-commerce business i assume that sounded like a pretty bad situation and then also that oracle consulting insurance software consulting business also you considered like not a great outcome and so so those two are the things that kind of got you that that brought brought your confidence down um yes um yeah i wouldn't say depleted but it was i was like i know i could do another one but then i'm actually looking back i bought four companies at up till that point not all i mean one i lost money on the bar a couple bucks i lost money on the e-commerce one i lost money on you know software consulting business and then the gym i made money on but and i made money on my real estate but am i really a good buyer i mean i love to buy and i and i'm buying but are you really a good buyer like are you really about to go spend x amount you know with a few extra zeros on top of what you've already bought and um you know with what balls like what what foundation do you actually have to go and do that you know i know you've got experience but you don't really have the true winds on paper to show for it like um and so i was like all right if i'm about to put in nearly my entire net worth and my life savings into something you know i better have that confidence to be able to do so so that's that's really why um you know i went with this thought process of let me try it out on something small let me get that win let me just mentally because as you know just in the process of acquisition closing and even operating it's very much a mental game so so let me get that win so that mentally even i can be prepared and and to be honest it i would highly highly highly recommend it to anybody else that yeah you know instead of going brand new into seven eight figure company buy something tiny go through the entire process feel that rush of okay i've got this went well or it went terribly and learn from it and and move on but that that really helped me for the next one so you had made the decision that you were going to take a bigger swing actually uh quite a big your biggest swing yet i mean by far um and then you kind of pumped the brakes and said well let me let me do something smaller first to make sure you know i have the chops for the bigger one yep and it was kind of simultaneous like let me while i'm doing this let me also kind of do this and the business case for byron was it'll be a portfolio company so i'm always going to need virtual assistants even if it's a physical business it can always be there so it wasn't 100 like uh this has to come before my next one but it just happened to be all right well actually this is a great opportunity let me buy it and you know continue to work on on the other ones because the other larger deals are they're going to take months and months to close anyways yeah very interesting i love i love that um that psychological discipline okay so that takes us to the final and what i think was a pretty big acquisition right the vending business routes okay so so tell us about this one so yeah so i was again in mexico grinding away day in day out calling up on every single broker around the country that i've spoken with over the past couple of years to find my former company going back out to them reaching out to them saying hey i know i was looking for x now i'm looking for y i need something with a few more zeros need something with these certain parameters and you got anything let me know and simultaneously went to a bunch of small business brokers uh small boutique investment firms or investment banks private equity companies i mean everybody tried to network as much as i possibly could to find my next thing in all 50 states i did not care i even looked in mexico i looked in canada i was looking all over north america right and okay um you were prepared to buy business in mexico i was i was i mean i was i was flirting around with it just like i was uh when i was on craigslist you know eight nine years ago so if something came up i probably would have been there and done it okay and what is your what is your budget when you say a few more zeros i was primarily looking for i guess in the typical search model uh which i'd recently become familiar with so i had kind of stolen that model and said you know i gotta have at least half a million to a million in cash flow and a maximum that i can chew off is probably two three million top line in cash flow and so i was looking at primarily i was looking at low seven figure deals but i really wanted something in the high seven figures uh borderline eight figures but i knew if i got up to that number i wouldn't be able to tackle it completely solo so i was just i was just trying to you know buy something that i could chew off myself 100 with my cash as well as not have to take on outside investment and a whole bunch of parameters but that was roughly the size that i was hoping to get okay all right okay and so what were what were people coming back to you with uh i got three businesses under that were either i was the final first choice for the sellers or i was number two a very close number two one was a chemical distribution company and loved that business it's a great one but it was a 60 year old company would have bought it at like a two and a half x uh just complete mess of operations and just really cool dirty grimy business that i knew that i could have gotten into and really worked out especially with my my background and supply chain and operations and then there was a technology company that did a lot of the securitization for the phone systems when for example board of directors uh companies are going public and they're having the conversations they're dealing with they're dealing with you know any pr activities from publicly traded companies to wall street or whatever it is they were doing the securitization for all those conversations and so that company was that was a bit larger company it was it was um something that was 100 office based there was no you know it was a technology company and it was also 20 25 years old and that was one that i could not have done myself but i got beat up by somebody else and that one as well someone that just was bringing in investors outside capital everything the chemical company i was number two only to a strategic acquirer who was looking to roll them up and then finally this this last thing the oddball one was an amusement vending company which means it's a company that does jukeboxes pool tables arcade games atms things like that all across bars restaurants theaters clubs fraternal organizations etc across the state and so that came up and that just seemed just super weird to me i was like all right i'm i this this feels like a business i would have found on craigslist right right exactly and so i'm like all right this is this is like why am i even you know i don't hit delete because i bought so many weird stuff and so much weird stuff attracts me and i just love to learn the intricacies of everything so i'm like all right you know what i'm just gonna kind of play around with this all right please send me the financials like the update of financials um and so i was just asking a few questions back and forth i thought absolutely nothing of it after a few email conversations it was like holy cow this thing is cranking out it's dead consistent i love the model and it absolutely fits my mold of everything that i'm looking for except one one element which i can kind of overlook but so i'm like holy cow this is actually very intriguing let me talk to the seller and so that started a six seven month journey and finally closed on it how big was the business and um what was what was the thing that you could the issue that you were comfortable overlooking it was a seven figure uh cash flow not ebitda but actual cash flow um and so how much revenue is that in quarters it was a lot it was a lot and it was a pretty good margin as well and because we do a 50 50 split on what we take and so our opex is not very large except the labor i mean labor i mean there's parts uh capex is one big piece of it which for me i include capex as part of my p l um it's it's very much an operating expenditure not truly capex for me at least and so um but as far as um you'd ask about the one thing that i overlooked that one thing is that it's local so i did not want a local business uh i don't want something that i only can sell to people around me and i wanted something that for example distribution company well i can sell to someone in alaska it might not be logistically feasible or economically feasible but at least you know i can i can make something happen maybe if it's smaller parts i can distribute globally nationally or at least regionally you know but here it's i have to be around my base i only have if i stretch it maybe a two three hour radius and so that's the one thing that i didn't like the one other kind of negative aspect was that it's retail i hate b2c i will not touch it uh just you know with prior experience just not my cup of tea and it uh i did not want the retail exposure where this is absolutely truly retail exposure uh because all of our customers are in that industry but i said you know what this is this is still b2b our customers are these businesses and that's who we're dealing with even though the end consumer is you know technically a b2c but so i made i justified it with that aspect but everything else was just it was dead stable there was no growth it was just um had a lot of leverage there was no growth you you liked that there was no growth uh it when after seeing so many coveted bumps i liked that it was dead stable over the years so interesting yeah it um so i liked the stability and liked that you know i they didn't just have a crazy 20 20 year it was overall relatively stable so but they must have had a terrible 2020 because the whole world shut down and people weren't going to bars yes and no so yes because they were almost 80 90 shut down uh for a lot of locations and that's you know a lot of the revenue was lost for a few months and scattered parts of other months but there was um looking at the p l it's a little of an oddball because there were things in 2019 there was a an acquisition at the tail end of 2019 that the numbers for it did not come to fruition until 2020. so that 2019 acquisition really came into play and made up the delta for 2020 and then on top of that 2020 also just a ton of people moving down streets are open everything's open so kind of just people coming down here so a couple of those things really impacted why it was so stable um even when digging through under the hood and looking at everything but it was and even now it's it's been relatively stable business overall uh which but it did have a ton of levers to be able to pull on which which attracted me and give us just two or three minutes on the vending business i mean i think it's it's about one of the simplest businesses there is so we don't need to go too deep but um yeah just give us a primer on the vending business it's simple at uh as a one-man show and then once you scale to you know 20 30 plus whatever whatever dozens of employees it gets extremely complicated but um you are placing an equipment that you own so i own these jukeboxes these golden tees these crane machines that have stuffed animals or they can have ipads and beats headphones and things like that in them atms arcade games the pool tables we are ins we're going to a bar of restaurant retail establishment and placing our equipment and saying hey owner let's split the profits all right you good all right let's go and then we send our collector to go collect the money after a certain duration we send our technician when the kids you know break the glass because they don't win the prize and or to replenish the toys in there because they're they're running low or the pool table balls won't you know drop or whatever it is when something's gone wrong it's our team that comes out and fixes it and so there's really two elements that is absolutely critical in this business that i've learned from a dozen plus owners it is the service and it's the customers and i mean same can be said for a lot of companies but in this it's absolutely critical that you take care of any service call and especially the late ones when a majority of your clientele are the bars and a jukebox goes down if a jukebox goes down that will empty a bar faster than anything else because it's all about the music right so if a jukebox goes down at 11 o'clock you better be out there and go and take care of it but if an atm goes down or runs out of cash at a cash heavy bar you better go out and take care of it and fill it up yeah so the service aspect is absolutely critical and that was the foundation that a lot of these folks really built their companies off of and the customer aspect is another critical aspect where they want to text you they want to call you 24 7 you you got to baby them you know so it's uh just like everybody else they expect it because one we are when walking into a new location or even our customers we are one of the very few vendors if not the only vendor that is actually paying you whereas every other person coming in that building they're expecting you to pay them so we come in there collect the monies and give them a chunk and really nobody else does that so we are financially in bed together with every single one of these customers and it's truly uh mutually beneficial relationship if the machine's down you better call us because that's not making you money it's not making money money and it's not allowing your patrons to play so that they can stay in your venue for an even longer time so it's um so yeah it's perfect alignment yep with your customers and so your point about the fact that it was local and it anchoring you to a particular geography was a was a con of this business you know it's also like not only is it is it um anchoring you geographically but it's it's a bear of a schedule i mean i assume it's not you going out at you know to service the atm machine at 1 am in the morning at a bar but you got to make that happen um and so just a little bit about the logistics of that do you have a couple of you know your i mean your own staff that needs to be on call at all times yeah so how we're situated we i've gone through a few additional acquisitions now which have alleviated this but we are we were tackling about a three-hour radius which is insane you know because you're there sitting on a weekend and you're on call but we had guys on call every evening monday through friday and then one individual would take on call for the entire weekend and throughout the day we would dispatch and just say hey so-and-so location called about their jukebox not working we got to go out there and so that's how it worked during the day we had a bunch of guys to address it and then in the evenings okay you know what this is like um one of our driving games or racing games went down or the shooting games the the you know the scope isn't working or something and it's something that's going to be a longer fix or we need a part put an out of order to sign on it will come in there order the parts and get in there within the next business day or two you know whereas some of these other things okay i can do this it's just it's not a part issue it's i can go out and address it and fix it right then and here then we'll be out there so um but logistics was and still is very much a challenge just because of the way this company was set up where it's scattered all over the state whereas another one that i purchased was very condensed within a certain geography and footprint around that owner's house so i've kind of seen the pros and cons of how everybody sets up their companies but what i've inherited is you know what i've inherited and i've got to fix it in terms of the logistical aspect in terms of the operational aspect and and really cleaned up so that it reduces the stress levels on us operationally and our team and then ultimately we can get to our customer faster so that we can take care of them so you're putting these changes in place or you already have i am in the process a lot of things i we have like for example we bought a new company and drew a line in the sand everything above this line we take care of with the new branch reducing the time for the southern branch by x amount of hours and vice versa so just really splitting everything up so that ideally we don't want to be more than an hour away from any customer so we always have a physical presence somewhere yeah so that makes your customers happier it saves it saves you your your aggregate time into your travel time for all of your people together in a given month reduces that a lot when you're not making money so it's a win across the port that's great uh and how many do you call your your cash generating arcade machines and pool tables assets what do you what do you call each individual producing machine machines pieces equipment games yeah how many how many of these alcohol assets do you have in total uh a few thousand a handful wow and so in the world of vending this is is this a big operation or is this like a medium size i mean yeah scope it for us it's in the world of vending this is typically ginormous but there are a few actual publicly traded companies or just just massive massive companies so and relatives to them it's it's absolutely nothing but uh typically the the way it works is there's a whole bunch of one-man shows these are people that have grown up in the industry they've worked at it for decades they're um in the latter part of the century um you know 60 to 100 years old and and they've been doing this forever and they've got a little route that they do everything for they service they maintain do the books do customer service do every single thing for and that's it and they've plateaued it as a one-man show because they're their own boss they put a machine out there it's passive they take a customer service call here and there they might have a handyman like a guy that helps them do a few things here and there that's really about it that's the vast majority of companies in the industry and then you get over the years kind of like this one where okay you know what i'm bob 85 years old i'm looking to sell my route i sell to someone else and then someone else sells to him and then someone else sells to him and then he aggregates just organically because he's maybe younger he's maybe got a few years of ambition left in him to say you know what i'll i'll try something bigger i'll actually take on employees i'll take on this overhead and there are very few companies like that that do that but that's what the companies that i bought had done they had acquired organically not aggressively or anything and they had done that growing up in the state or in their footprint and that's kind of where i am at i bought out the next biggest company and so now when you merge you're on the biggest in the state or sorry the biggest in the state but or even the biggest in the region but then you do have your competitors out there that are for example they got all the national accounts you know so you have a competitor that can easily with a flip of a switch just go out and drop a half million in assets to build out a brand new arcade or a million dollars you know and that's something that for a small business it's something that we would have to take some time truly budget plan and work with to put in versus someone else they can just say you know what yeah well we got that in our inventory right now we'll we'll go and put this stuff out there so we're the biggest in the state but that doesn't really mean much because we're still very much a small business in a very niche and small industry but when you so you made this one acquisition and you just said you've already acquired another you're the second the i guess the second player in your market right yeah uh so since that first one last year i bought three more uh two small ones little tuck-ins and then one larger one and what did those three the the the acquisition and then the two tokens these three additional acquisitions what did they do to percentage-wise above the revenue of your initial acquisition um to be honest i don't look at revenue but cash flow it was one was just a little drop in the bucket um yeah you know maybe five percent and then another one was also another five six seven percent and then this other one was about but uh 150 uh so that more than more than doubled what we were doing oh i for some reason i had the impression that that that larger one was smaller than your first acquisition but it was in fact so this latest one the larger one was bigger than um everything that i had before combined and what was the cat say sorry again on your first acquisition what the cash flow was it was a seven figure cash flow wow so you are now doing over two million dollars in cash flow if if with these acquisitions multiple selling figures yep yeah um it's pretty cool in the in in the vending world in the in the world of enemies uh so to uh i mean i mismanaged our our time here we're at 90 minutes i got to let you go i got to let the poor audience go not the poor audience i'm sure they're really enjoying this but um we should have just devoted the whole thing to vending but i do have two more questions for you um before we we cut it off are you good yep yep okay appreciate how generous you're being with your time um the first is you know what you just described how how your seller assembled all of these routes over time uh and it sounds like i guess when you use the word organically you meant like he kind of just waited for people to come to him people would knock on his door and say hey buy me out i'm looking to retire so if you go on biz by sell you yeah you'll see a lot of these vending routes for sale small little vending routes for sale um so it seems like that strategy is still uh still an open strategy that you could pick a market and start and buy up these little and be more aggressive about it than your seller was and actually build something is that do you think that there's a thesis there i really don't oh really and and uh and i'm not saying that to discourage people out of my industry but it's what i've realized is and this is probably the same for other companies as well but it has to be of scale for you to build a platform out of right my first one was it had a team had a back office i had everything operating with management in place i was able to come in and learn to a certain degree and unfortunately or fortunately i was inundated with uh sellers requesting me to buy their companies because you know they saw that 30 year old 29 year old kid was buying their competitor out so they all came to me and i had to buy them but it's something that the more and more i've gotten into it you know i'm i think i'm nine months into it right now if i had started off with a small route i would not have been able to do it i couldn't manage i i am not a one-person um operator you know like if i bought out a company just doing a couple hundred grand in uh sde and bought that out i could not manage that myself i need the team i need someone to actually do it there's technical expertise it's not rocket science but it's not what i'm wanting to do or i had any desire to do or something that's very advantageous for me to do so okay then i need to buy something that's got at least a million two three million cash flow okay at the minimum and how many of those companies are actually out there not very many and so and once you get even larger you know they're probably scooped up by other private equity companies or other family owned companies that are now even probably eight figure cash flows and so there's not a whole lot um but to purchase you know for example you said you know on biz by sell i would see these companies throughout throughout the years or even on craigslist yeah not once has it ever attracted me you know because for a lot of them you see the chips routes or you know the pop routes yeah physical like the pop machines but actual game routes you don't see a whole lot of and the issue with that is there's a lot of capex involved and there's a lot of expensive equipment that needs to be serviced in a particular way and so for me it's um it's really not attractive to go and add in and sprinkle in 100 200 grand or even 50 grand in cash flow that's just i don't know for me it's just a waste of time and so um i really think if someone can get into not just this but anything a platform company that has some of the foundation built up then you're able to sprinkle on you know other platform size companies or maybe even the sprinkle you know a few hundred thousand here and there in in cash flow but that's one thing that i've realized was i really benefited from that foundation in that organization with the management in place and had that not been in there like for example it's just a complete night and day switch between the two larger companies that i bought one is much larger with in terms of personnel and the expertise one is almost bare bones you know it's got a very skeleton crew it's very lean and had i started out with that company even though the cash flow was larger i don't think i'd be here today i would not have been able to learn as much do as much or been able to walk away from it and purchase another equivalent size or larger size company so i think that learning absolutely has to be there especially on the first company so yeah you don't tend to get those from the smaller businesses yeah interesting you know usual everything that you just said about um buying a platform first and for all the reasons and then and then maybe doing bolting on bolt-ons and or sprinkling as you put it um you could that could you could have been talking about like any other industry i mean this is just kind of i feel like that's a nearly universal rule and small business acquisition is to buy a platform don't be tempted by something smaller which is going to be way more fragile and you're going to be working in the business and so on um by the platform company and then maybe look at those smaller acquisitions once you understand the industry and you've got the management layer and the infrastructure in place to start building stuff on so i've heard that time and time again no matter the industry last question for you sir um so now uh i want to tie it back to this that um half step you took with the micro acquire with uh bryden that you acquired uh sorry byron that you acquired on microacquire um you needed to prove to yourself that you know you could buy something good before you went and took this big swing now you've taken the big swing and then another i mean i mean you've acquired a lot now how does how do you feel about that that's that that micro acquire step i heard you say that you actually really recommend people do it um but a lot of searchers are just jumping straight to what to your vending machine acquisition they're they're jumping straight from nothing to buying a two or three million dollar business uh and it seems like you're doing it successfully do you really think that the the the byron acquisition helped with this vending acquisition oh yeah 100 yeah and and why that helped particularly because i was in a position where this took seven months to close and there were a lot even for the experience that i had and all the failed deals that i've had and all the know-how of having done dozens of deals whether real estate or you know business mentally too and as strong as i think i am mentally they were still like holy cow man am i gonna close this thing like is this actually gonna happen why am i spending so much time i'm at the finish line um two days before actually sorry one day before closing there was a massive thing that happened that uh unfortunately but i thought the deal was going to get pushed out and then eventually never ended up happening there's the economic turbulence and so there were a lot of things that were going on and i got rejected quite a bit i mean that was a whole other story but i saw financing from over 150 lenders investors banks everybody i called everybody in sba's top 100 list so there was a lot of rejection and mental fortitude that needed to be there in order for me to actually get through the finish line so that absolutely helped especially because it was a short-term near-term win it was and you got a recency bias like oh yeah i did a great acquisition it's growing now and as opposed to the few others that hadn't gone so well but going back to every one of my former deals without any one of those i don't think i'd be here or close the deal because it took a lot of mental tenacity it took a lot of even to get to here today just the operational tenacity to be able to make it through all of these yeah let's leave it there uh that was a a great point to end on i think how can people uh reach you what's your i know you're on twitter what's your twitter handle it's at joel of velgapudi so just my first name and last name yep and we'll put that in the show notes uh any anywhere else you want to send people or is that the best place to reach out uh yeah twitter would probably be the best place linkedin if uh you guys want to find me first names u j w a l and last name starts with the v hopefully the only person should pop up pretty quickly cool well i want to congratulate you on a really cool uh acquisition in the vending but also just a really interesting um career path i mean you're you said you're what 29 30. i just turned uh yeah uh 30 now just turned 30. really uh a packed 20s for you and a lot of colorful cool business adventures so um look forward to having you back on in a year or two to see how the vending business uh has gone and what else you've gotten up to but it's it's really i think this will be an inspiration to people so um congratulations appreciate it will thanks so much all right as well until next time