Hello. Good morning, Joseph.

I think you’re still on mute if you’re speaking.

Oh, Joseph.

Okay. So let me get you to unmute.

Hmm.

So I’ve told Zoom to unmute you.

Hmm.

Ask all to unmute.

So, so I guess w worst case, um, you can also join with, um, with re rejoin with just the phone, uh, if it has an issue. But, um, there’s no rush. I’m, I’m still gonna be here. Uh, if you leave and re-answer.

All right.

All right. Yeah, it looks like it’s working. Okay, great. How are you doing this morning? Yeah, good. Uh, hey, everything is improving. We’re, we’re doing better supports, better marketing, uh, so everything’s going in the right direction, uh, solely but surely. So everything’s good. Very, very good. Very good. I had a quick question.

I had a quick question for you. As far as, and I know it’s vague, you don’t like know my background, but I don’t have a network of like accredited investors and whatnot. So, uh, with me being specifically in real estate and property management, uh, as a asset manager, how do I, uh, and I know it’s part, uh, um, marketing and networking and whatnot, but how do I do both as far as specifically raise capital for syndications or fund that I would like to, I like to do.

Sure. So I guess the two best ways that I know, because when I got into, uh, there was this small investment bank in Toronto, um, I mean, I didn’t have a network, so the way I did it was through either two ways. One was, uh, we just found, we found people. So we found a guy who was at restaurants. Like he, he was, he had his own network of investors and then he was just looking for deals and he was looking for a broker dealer to park himself at.

So, uh, he was an Israeli guy with like really good, with a really good track record card. He used to work at the banks and so he could raise a capital really good. And he was just more of just looking sometimes for deals to san his investors in exchange for a commission. Um, those guys are really good to source.

That’s one way. Uh, and then another way is kind of similar is, uh, instead of targeting the investors directly, just to find a guy who, somebody who’s a proxy to the investors, uh, because we did, so I met, there’s this fellow called Andrew Damon. Um, okay. He, he networks with family offices and then he got, he introduced me to a Chinese billionaire once, uh, the founder of, uh, G C L and I was for a solar wave for deal.

So I got in touch with him because I said that I’m looking to offer, um, Commission on a, like on a hundred megawatt farm that is, that is shoveled already. And then we went over to him and then he introduced me to somebody in Nevada and then a guy in Nevada introduced me to the guy in China. So those are two, just to find people that are, um, like, I hate to say, brokers or proxies or anything.

Uh, people who know the people that are investing. And then just offer them like over generous, uh, commission. And then they have to be either register, usually they have to be registered, uh, with their, uh, with FINRA in your case. Okay. Yeah. And then from there, then from there, then you start finding your own investors.

Uh, that’s the quickest way to go around it, I think. Gotcha. Okay. Cool. Thank you. No worries. Is that Alfred now? Uh, yeah, mainly I just, I’m scratching my head. I work, I’m working at a, um, property management company and, and, uh, the, the fund is, I, I’m sure she’s a fund manager cuz she acquired 17 properties here in Arizona.

Uh, and, and I don’t know the whole timeframe on all of ’em, but I know at least three or four of ’em she bought in the past year at the top of the market. And she says she has about a 650 million portfolio, which, again, the numbers don’t mean anything, but it’s just like, She didn’t seem to have the experience cuz these properties are in like, they’re like D class multi-family property.

So, uh, there’s, there’s so much deferred maintenance she bought at the top of the market, so I don’t know what the cash flow is specifically on them, but she’s stressed out. Like her, her partners are stressed out, like they’re actually calling us as far as the managers and it like just a lot of disarray and chaos, uh, is, it’s, it’s really interesting how she was able to raise all this money and I’m just trying to, like, I’ve, I’ve checked out her profile line and whatnot.

I’m just like, it’s, it’s, it’s sad that she not like, not in a negative way, but it’s just like she kind of misled her investors, um, Because it doesn’t seem like she has the experience to know or understand like basic due diligence. So I’m just acquiring one property, let alone 17 and being outta state. I think she just thought it was this, cause I saw her profile line, it kind of seemed like she sold her investors that, uh, just is hands off lifestyle and it’s, it’s very, uh, in involved, especially if you’re buying remote, you need to do your due diligence.

And it’s just kind of like interesting to me how she was able to raise this amount of money. It’s a body of properties. I’m sure she’s over leveraged, cuz my understanding she bought it 70 million last year for the one property that I’m met is 240 units. So again, just trying to wrap my head around it, like I have several years of experience of owning my own managing rehab and things of that nature.

And I’m just like, wow, this, like, to me it’s a no brainer. Like you do your due diligence, especially on the contracts cause we’re coming across, there’s no leases. Um, for some, some, uh, tenants didn’t have leases, so she’s turned over management like two or three different times. So it’s just a lot of knee jerk reactions trying to, uh, save, save the situation.

And it’s just like, well, like a lot of this is on her as far as ownership. So, um, yeah, we can, as far as managers, as far as manage the property, but we can’t do any more than what you allow us to do and what your, your, uh, um, your budget allows. So. And if you didn’t have the CapEx expenditures. Accounted for, like this, this property I’m at has a lot of deferred maintenance.

Uh, cast iron pipes are busting cuz they’re trying to put in washer and dryers. And so there’s a lot of stuff and I’m just like, you, like you would, I would think, uh, my ignorance is thinking that okay, you can raise the money, but you have to know what you’re doing. And it doesn’t seem like this was the case, uh, in this situation or any of the situations in this portfolio she bought here in Arizona, or her and her group bought here in Arizona.

Uh, so anyway, uh, that’s why I’m just, it’s, it’s mind boggling to me. Cause I’m like, I got 20 plus years of experience not doing multifamily on that scale, but I’ve done residential, I’ve had my broker’s license here in Arizona, and it’s like, what the heck am I missing? So, so wait, wait. So just because there was a lot of information, so basically you’re saying that there was, there was an individual that raised a lot of money who has less experience than you?

Who Yes. Is doing multiple deals at once in the fund instead of one off. Uh, and you’re just surprised of about how she was able to raise that much money, uh, without Yes. Having the underlying experience and doing good due diligence is is what you’re saying, right? Or is it Yes, sir. Yes, exactly. Yeah. But yeah, there’s a lot of like health, health co violations, a lot of, oh, it’s a lot of issues on multiple properties.

Um, and I’ve only been working for this company for two months, and this whole, um, uh, management company is devoted to her portfolio right now. They just expanded from California and it’s just a lot of like, wow. Like, like even if any, any, any person that buys a, their first time home buyer, they, they have a inspector go through and check the house out.

This does not seem to be the case specifically on this property that I’m at. Just, just from the standpoint of not having the mechanicals checked out, specifically the plumbing, uh, let alone the due diligence on the leases. Cause they didn’t have leases in place. There’s just a lot of misses that I’m like, and she bought at like a, I think a 90% occupancy, 90 plus, 95% occupancy rate.

And it’s only at, like, we’re at 86% and that’s just over the past since we took over in January. So anyway, um, It’s a lot. Again, very interesting for her to be able to get through all this. And, uh, I was, uh, ear hustling. She had to call, uh, I guess emergency calls. This again, it’s like a lot of fires she’s trying to put out cuz she’s trying to manage this.

I was ear hustling. She was in the break room where we were and she was on the phone with her GP and talking about all the banks, allowing them to get a line of credit to, so they’re kind of really in a, in a dire situation. And I’m like, you can’t go anywhere really when you’re, when you’re at the top of the market.

So, yeah. Uh, if you’re, you don’t have any, uh, um, Uh, any room for growth, they can’t really raise the rent too much cuz the area, again, it’s like, it’s a, uh, it’s like I said, a sea property. This one specifically. Um, but the tenants are very frustrated and angry. All the reviews online, they’re just very upset and I get it.

They’ve, they’ve not had maintenance issues handled for months, if not years. And I know she just took over this specific property last year, but this is an ongoing issue. So anyway, it just, it just kind of blows my mind to, to be able to scale up so quickly and. Have like just no understanding of exactly what you’re doing.

My understanding is she, cause I read her profile online, she does a lot of marketing and advertising on social media, um, and she’s on LinkedIn and she, she kind of talks about she has a 2,700 unit portfolio, a thousand of those units or I guess hands off, she invests in another fund or something, or syndication.

Uh, but she has directly I think 1700 units that she manages from Arizona, Washington, um, and another one or two states. So I think she just got into the mindset that she can just be hands off and just hire management company and that be it. Um, But yeah, so it’s just again, to me, very interesting and it’s like, wow, if I had half of that, I could do, I’m like, again, not that I’m like trying to beatle my chest or anything, but I’m like just basic due diligence.

Like if you do what you’re supposed to do, hire the right management company. But even before you hire the right management company, you gotta make sure you evaluate, uh, that property thoroughly. Especially a older property. Uh, cuz these cast iron in pipes are an issue here in Arizona, uh, and then that they’re putting more pressure on, they keep busting and it’s just causing issues that they don’t seem to understand how to fix.

Like, you gotta stop the bleeding. Uh, and it’s, you gotta spin to stop the bleeding. And specifically in this case, it’s the pipes, you know? Anyway. Um, I, yeah, I just say all that, just like I said, it’s just mind blowing to be able to raise that amount of money. Um, I know part of his debt as well, so, but still, she had to raise the, the equity piece of it from investors, and that’s what her investors are so upset about is they’re, they’re seem to be losing a lot of money.

So anyway. Yeah. Well, well, that’s why, that’s why a lot of what we focus on is the, the sales and the marketing and the outreach because, um, you know, we get operators that are already experts in the operations side of it. Uh, and we just have to get like, people that are raising the money, they just have to make sure that the operations make sense.

But then if you, if people figure out marketing and sales, then they can raise the money. Uh, exactly. The only thing is that actually in the short term, it looks like it’s doing well, but in the long term, unless it changes like it, you can damage the long term reputation. So, um, yeah, exactly. Yeah. But, but, but this is all to say, the point of all this is all to say that if the outreach has done well and the marketing’s done well, Even for unfortunately an inferior, an inferior product, uh, the sale can work to investors.

Is this, you know, you have to just think long term and or else somebody will be applied by nights type of person. Right, exactly. Yeah. Okay. Okay, cool. Well thank you for that. Yeah, yeah. No, no worries. And any other notes before, um, address the others? Uh, not, not right at this moment, but thank you. Yeah, no, no worries.

So thanks for sharing and, uh, we’ll talk soon. All right. Okay. All right, cool. Alrighty. So, uh, welcome everyone. And I see, uh, Greg was here next. How’s it going? Uh, unless too bad here. I had a, you passed me on a good lead with Amir here, so I chatted with him this weekend and stuff and just I meeting last week with investor group that I know here em, so just.

Honestly, it just seems like in, I dunno say hitting walls or hitting barriers, there’s just this oil and gas raising money through these oil and gas projects. I was thinking it’s, I, I’m having second thoughts here. I’m thinking might have to move back on, back burner and look for something cause

I’m just not getting anywhere. Seems I’m just spinning the wheels, just not getting anywhere and just struggling to, and it’s like the guy I talked to on, he was talking about raising the cost of capital or the cost of raising capital, but once I, you know, figured that out, how much it make cost, I’d say cost five.

He said anywhere between percent. You know, that, that cost would, might just take all my profits of raising the capital, might just eat away at all my profits for managing a fund. Cause there’s no leverage involved. That’s the problem. I’ll give you an example. Um, Let’s say it cost 5% to raise a capital on hundred thousand, let’s say put it into a fund.

Well, it makes 20% or 25%, and I take 20% of that 25%, which is basically 5%. So the cost, so I’m out, nothing. I basically make nothing. Okay. So then where is, just to go through the calculation, where is the, uh, the, the, the 20 something percent of the 20 something percent, where does that come from? The, it’s like 20% of the profit.

So let’s say a well makes 20, 20% a year. Oh, like a hedge fund, like a two profit. Got it. That makes sense. Yeah, I understand. Yeah. That, that’s my thinking. But then,

you know, I could end up losing money on it. Yeah, so then the co and so that’s, that’s interesting. And, and let’s, I like the way that you’re open, I like the way that you’re open to potentially shifting. That’s good. But then let me look at the, at the statement from Amir. So then, uh, the cost of raising capital, is he talking about the amount of money he’s putting into operations and his Facebook ads and all this and, and, and like all the, all the money that I have to pay for marketing?

Or is he talking about, uh, like, like something else? I think he’s just talking about the marketing, whether it’s the cost, cost raise capital, whether it’s

hiring somebody or doing himself his time. You know, like there is a cost to capital or the old sources of it. I’m not sure exactly, but I believe it’s in the marketing, not necessarily the operations side, just getting the capital in the door. Okay. Cost preferred to acquire an investor capital. Okay. That makes sense.

Yeah. So. What you’re saying? No, it makes, it makes a lot. That’s why some people, um, that’s why sometimes like the, the construction projects, uh, that have like a huge upside, or when the upside is really huge, like even 40% or something, then that’s why it makes more, it can make more sense to do it. Um, you know, another thing too is the last discussion, it was about the small guys.

The small investors who would potentially invest. So that was the purpose of the Amir introduction. And yeah, if you were to go through the small, uh, check investors like Amir does and he’s successfully raising money with them, then yeah, then you’d probably do exactly what he would do because he’s probably paying between two and 8,000 to Facebook in return for an investor that, like investors that’ll fund a hundred thousand.

This was, these were the last statistics he sent. So, um, yeah. So then the solution would be, yeah, probably to find a, Find. Yeah. Cuz to find something where the profit is more than just, uh, as you said, 20% of, and that’s what, that’s best case scenario because the reason why you have prep return is because, um, you know, is because if it goes below that, you know it, it can go below that too.

So you can actually Yeah, for sure. Yeah. You can actually lose money. So that, that’s, that’s a real risk. But then on the, on the positive side,

the challenge is, is when you compare to like real estate, real estate has the leverage of, you know, you down, you get percent from the bank, or 80% from bank and 20% from the investors. Well, that leverage part is what generates a good chunk of your return. Whereas in this side of things that I’m looking at, there’s very little leverage and it’s just, and then when you rent a property out, you know what the monthly rent is every month.

Well, with this. You know, I don’t know what, from month to month it could be very different and it’s, you know, like it’s, I dunno, I’m pretty sure this way I’m having some serious second thoughts. Yeah, maybe just move burner and then maybe, you know, I have a real estate background, so maybe move into more a real estate project or real estate ideas.

And, you know, maybe six months down the road something will come up and, or a year down the road and something will come up. An investor or different things may change, so just keep it on the back burner. Or worst case scenario is just do what I’m doing now. I make some money in real estate, put some of the profits into some of these projects myself and just keep it as a smaller side hustle and move on to something else potentially.

But then it’s two final thoughts on this. I think one, um, Just like we can continue doing, you know, moving on. But then in parallel, I think it’s best if we, uh, I mean we can get people to just put some models together, some numbers together and write everything down. Uh, and then we can write down the minimum, the, the minimum the, the project has to make, uh, for it to be viable and then you can, and to get the deals when you, when you go out to the sellers for the, of the oil of the oil deals, then it will just be to have a minimum standard for the types of deals that are coming through for you to send an l o I to and if they don’t hit those minimum standards, then it’s no.

So that may, that may involve, cuz I remember a lot of your work was in the Canadian market, right? Or was it Uh, most, it’s actually in the States and oh, down south. Interesting. Okay. Yeah, in Texas, although I do live in Canada and there is obviously a lot of oil, but most of the stuff I’ve been dealing with has been in Texas already.

Okay, so you have the market. Yeah, so I, I think. I think that there, there, there would be some deals that, you know, would generate enough return, but I just think the market size would be smaller. But anyway, bottom line, what we can do, we can just get a model together to say, Hey, uh, here, here is what the deal has to generate at minimum.

Uh, because I’m a big fan of Ryan everything down. Uh, cuz then we can actually, you know, then, because you’re going to still talk to these oil, these oil, um, companies. So if the numbers do not hit the minimum TRE threshold, uh, based on, you know, what they’re telling you, and then really, I’m not the C f A David Donovan, we can get him to do it.

Uh, you know, then it’s just an automatic no. And then if it is impossible or near impossible for you to find deals that consistently are above that, then as you said, we exit, we just forget it, then we just go onto something else. Uh, that’s one thought. And then the second thought would be, um, the, when we actually talk to people.

So then how many, how, how is the, the, for the lenders, uh, have you spoke to any, uh, Cashflow based lenders about some of these deals? A little bit. The challenge comes back to, again, being the middle man. Cause most of times they, with the person’s doing the operations day operations management, so that’s challenge.

They don’t really lend to me. So they basically say thanks, but no thanks, uh, because of the idea, the, the hard part is convincing them that you have the, um, that you’re an operator that is gonna buy a hundred percent of the company as opposed to somebody who is introducing the company. Yeah, yeah. Like when we’d buy, we’d buy whatever share of the wells and the project and stuff like that, but there’s no leverage in it because we’re, we’d basically be a silent partner, whereas the operator where they prefer to deal with the operations or the person, people after the management, the day to day.

And although it is, I did find one lender, but it’s very case by case and they’re. They weren’t too thrilled with it. Leave you that way. Okay. So that’s what the market is saying. Okay. So then how about some folks like, uh, I don’t, I don’t know if these folks went anywhere, but what about some of the, uh, uh, if you were to get like a tiny little board together, like, you know, Sean and all these guys, people that were in or, so, how, how is that, that little introduction, how has that been?

Um, Sean’s okay. Yeah. No, like you put a board of advisors together and stuff like that. Like I, I’ve come across some people and I kinda have a template here and what I’d like to do, but it’s, again, most of these people are very seen. Some of ’em are very senior in the oil and gas, and they’re like, well, they could almost just do it themselves.

They don’t need me. I need them more than they need me. Okay. These are the, the people who are buying, who are selling their business are the people that don’t need you are okay. Are you, well, ones that are selling it, there’s. Mostly selling their projects or either operators that they sell to someone else, like managers.

Yeah. And they just wanna get out and move on a different project. But then I’d still need someone like I’m the middle man. That’s the ultimate problem is I’m still a middle man. Okay. The challenge. Okay. Got, okay. Yeah. So then, well, I mean for this, I mean, is this, it’s a bit of a pain, but then it, it’s kind of like having to, um, get it like if, if Sean or, or some o some other people, like, um, there are a few other people like on the WhatsApp group, but if some of them had their own oil wells, and then you can make the argument, Hey, we we’re, we already have our own oil wells.

We’re just looking to add to ours. That’s one way I’ve seen people go around that is them acting as if they’re the thing that they want to acquire to, to go, to jump around that, eh,

okay. So you’re just saying find, find someone to partner up with then, or? Yeah, because there was, uh, ASTE, like there was this fellow est Steph in, uh, dc He has the reason why he is able to do what, what, what you’re not able to do is because he, as you said, he has, uh, like I think 1 million annual revenue in a cybersecurity company, right?

So then he’s able to go to the 40 million Revenue Cybersecurity company and say, Hey, yeah, I want to buy, uh, your cybersecurity company. So then, so then, yeah, I can kind of see the, the frustra. So then, so then you have to join with somebody’s, uh, oil rig who wants to acquire other oil rigs, and then put yourself, uh, with that first company if you want to acquire it that way.

Yeah. Yeah.

Okay. That’s yeah’s something to think about. So, yeah. Well, well, I mean, well, the, the thing is like, I can see why you’re saying real estate because when, when you go to real estate, then, then you don’t, you have to leverage, you don’t have to, you don’t have to do all this big dance and then, You probably have a bigger market because you probably have more deals that make more revenue, uh, you know, in, in a bigger niche.

Well, for sure. Not only that, but you look at like your investor list and just everything out there. There’s, you know, out hundred people, there’s probably 80 or 90 that will invest in real estate, 80 that invest in real estate, invest 10 to 15. There be one or two that might consider oil and gas, but there’s so much more money and funds and projects and out there capital real estate in general.

So it’s, it makes, it makes sense that way too. I, I’m in agreements. I mean, I’m a fan of shifting, but then last question on the oil is for construction, because I remember a while ago we were talking about construction. Then we said, ah, you know, construction, it doesn’t make much sense because, um, you know, because of the, the lack of cash flow.

But then the thing is that you’d probably get more, uh, upside once the construction is done. So then what about looking back at those initial projects? Yeah. The construction, like redevelopments or drilling projects and stuff like that? Uh, there is, but it’s just there, there’s a significant amount of risk involved in it.

Yeah. You know, so then you’d have to, you know, find the prospect, find the capital to tie it up, find a company to come out and drill on it, and do a drilling partnership with the drilling company. And, um, it’s, yeah, it, it’s a big,

I’m a little nervous cause I don’t have that much experience in it. So, jumping on something like that, you need people with, which you can bring in consultants and stuff that have it, but it’s still a, it, it, there’s challenges and risks that you’re, you’re basically drilling a hole that’s six or eight inches deep, wide.

You know, five, six, 8,000 feet in the ground and looking to head oil. That’s basically what it’s, so it’s, there’s a lot of prelim, there’s a lot of stuff that needs to happen in beforehand, and those people, all they’re looking towards, they can all find drilling partners, but they’re usually just looking for capital, which comes back to being an investment banker, you know, going out and working with them to raise capital that might be, and just taking a small chunk of it project that way.

Okay. So, so it’s almost like, uh, it’s like those mineral deals, you know, with the national instruments and all that stuff. Right. Which, which nobody likes no one’s, to be honest. I, I haven’t seen one person that likes the junior exploration deal or anything, so, okay. So, yeah. Yeah. But I think, I think going forward, um, what we can, what we will be productive, we can make a, um, Because you’re still in the oil world.

So just to make a model saying that this deal has to make X amount minimum, assuming you have this much capital, just so we kind of have that out of the way so that we don’t feel, um, any regrets going forward. Yeah, no, that makes sense. Then going forward, okay, if something happens, let’s say three months or six months, you don’t have the model ready.

Okay. If it hits the parameters, then go forward. If it doesn’t, let’s move on to something else or move past that larger felony. Yeah, yeah, exactly. Yeah. So then that’s one, that’s one thing. The second challenge is the middleman thing. So then, yeah. Yeah, because that, that’s a real problem because it, it’s, it’s almost as if we have to keep on, uh, helping you get with people who are, it’s, let’s just think about the cybersecurity example because uh, if I had somebody who wanted to be part of that cybersecurity company, it’s almost as if you have to make like a new part of that company, uh, only for the purpose of acquisition.

So on the call on Monday, the matter was saying that, uh, you know, there are two, he’s other c f A, he was saying that there are two types of, uh, ways that he structures these acquisitions. Cuz he, he purchased a protein shop there in, uh, Vancouver. So in the first way he said would be through, uh, making, by focusing on a target company, right?

So he is like saying, making, like focusing on the target company, um, and then leveraging the existing assets of the target company. Uh, and he said those are good if the company has a lot of existing assets and so on. And then the other way would be just making a new company and then doing a share purchase, uh, with your new company.

Uh, that sometimes is beneficial if there are less assets to leverage. So because there are less app assets to leverage, I mean, then it’s like, okay, yeah, let’s just make a, make a, make a company that does a share purchase of another company. But in that new company it has to have the experience of the oil.

You know, the oil or somebody who’s like, like if you were doing cybersecurity, I would say, Hey, let’s just make this branch with, uh, eb I’ll get you, I’ll make sure I can get you the capital. I’d take, um, 30, 40% of the equity and I can guarantee, well, quote unquote guarantee if, if it, if it goes through, uh, then I get that much percent of the equity, 20, 30, 40%, or if 50% of the equity, um, over x amount of time he’d agreed to it.

Because I remember for that first deal, man, that was a real, that was a real hard one to get through. So, uh, he agree to something that, so then what I’m saying is that for the oil side, uh, if we were to find somebody who already has an oil rig who’s looking to expand, uh, and then you just find one person.

You know, then that’ll be like the, the m and a branch of that company that you can create a new share purchase agreement with new, or, sorry, new shares, new company with, and then do a share purchase agreements of the target company. Because then, then the, the management would say, Hey, we don’t suck at Imagine Oil.

Uh, the lender would say, Hey, we already have existing revenues, you know, from that other company that is that company that is the, the oil company. So, so it’s a bit of a pain, but I’m just trying to think of solutions, but it’s a bit of a pain. And then, uh, that may be one option, uh, going forward. I just, why?

Yeah, it’s about, about to get some thought here. Yeah. So that’s for oil. Then for the real estate, uh, we can, we do that for a living. So, uh, all we need to do is just come up with the ma the mandate, like the, uh, the buy box, like whether you’re doing multi-family class, a existing, or you want to stay in single family and do a portfolio, you want to fix the flip.

We can, we can do all of that and then, We can just, same process, we’ll just make the data room and then, uh, do the app. It’s very straightforward. We do it for a ton of people, so that one we can do any day of the week. Yeah, that one’s pretty simple and stuff like that.

So understand the market. So I’m noted. Nice. Nice. So, okay. Yeah. Yeah. And, and I appreciate the, the flexibility. So, so next step we’ll just have somebody just in case they’ll make the model. Um, okay. And then, and then we’ll, we’ll really be waiting on you for the, for the direction you want to go over real estate.

Uh, or if you’d like to start the real estate side of it, uh, because Yeah. And we have slightly, we have half of, half of people here are real estate, half here to half for our, um, uh, m and a. So, uh, we doing, yeah, I thought about m like a businesses and stuff, keeping my eyes open for that as well. It’s just the ones I’ve come across are not price valuations, I think is high, like five, six times.

Which I prefer to be around three times cashflow and it’s, you know, yeah. It just depends on the business. Some of them, there’s one or two, but they’re, they’re overvalued from what I think. So I’m just gonna sit and wait for the valuation to come down. Cause I don’t think they’re gonna get bought out. So it’s either someone else will come out and buy it, or the seller will eventually.

Cause I think some of these are retiring or eventually get tired and realize they gotta drop their price, so. Hmm. And what, what, what, uh, sector? Um, the ones in oil and gas, uh, and the other ones in, uh, real estate, in, it’s like modular home building company. The other ones, uh, oil and gas, uh, reclamation Construction Company.

Okay. Yeah. So, um, yeah, let us know when you get them cuz uh, we can do our own kind of, we do free cash flow a lot of the time anyway, uh, because sometimes the EBIDA multiples is just to, um, free cash flow is just amazing because you, you’re just focused on a target company, uh, and, and you’re not comparing it to any, you’re, it’s like thinking by first principles and just focusing on the actual target instead of comparing it to everything.

Uh, both are needed, but, but yeah, we can do a free cash flow and then, and then you can use that as an arguments to say, justify why the price is this, when the free cash flow model says it’s this. That’s just the cleanest way. Um, you know, that’s one way. The other thing is like, you can look at some of the, the books of comp for the, for the, uh, what’s it called for the multiples, like the types of multiples in the industry.

See if it’s consistent because we have a few playbooks on what this type of service business should be. What multiples this should be, what multiples that should be. So that if that aligns to what our playbooks say, then uh, I don’t know if we’re digging from the same playbooks or not. So those are few ways to kind of go, you know, get them to justify why.

And then in a negotiation process it’s like, oh hey, like, you know, because your free cash flow, free cash flow version of this is way less. Why aren’t you just negotiate like a longer, um, some benefit on your site? Like, hey, let’s just do a, um, you know, let’s just do some sort of earn out deal or, or stay on for much longer.

You can kind of like, it’s just negotiation. You can, the more points you get, you can attack them with points that they lose to make them do more of what you want. You know what I mean? So, uh, that’s just another way to play with it.

It’s definitely fruit of thought here. And I’m thinking more the real estate cause have a bit more background in that it’s, yeah. You know, I was a realtor as well for a number years owned estate properties, was involved in development project for a while, so, My background’s more real estate related. So it’s an easier, it’s an easier switch, an easier transition.

Yeah. No, good. I, I agree. And then, um, and then when you do the capital raise too, then people can say, okay, yeah, he, you know, he was in the business and worst case, you know, is this, getting somebody in real estate is like a dime a dozen these days. So

Yeah. And there’s, there’s lots of real estate investors out there, and I, I know the Emon Alberta market really well. So let’s red stick too. Good. Yeah, we do too. We had, uh, we had two deals close in, uh, Edmonton, so, um, we probably connect, we should probably end up connecting you with, uh, with one of them because his limited partners are still in the deal.

He got eight limited partners in Edmonton right there. 44 units. Uh, it’s a really good market. Yeah. Yeah. There’s a lot of people outside of sson, like Ontario, uh, DC or, or moving into. And especially Calgary. So, but yeah, no, there’s, there’s two people that are be good to meet up with them and maybe I can help them out, give them some, I have some contacts here and stuff, and you know, those people that invested Emon here, so it’d be good to know and chat with them.

Maybe I can help him out some way. Yeah, absolutely. So we can, we can always send out an intro. I think I have to meet him after we do the, we’re working on closing the carwash still. Uh, but, um, I’ll meet him. Okay. Yeah. Close, close on it first and then, uh, yeah, I can chat with them and then curious to see where it is and what it’s all about.

I’ll go check it out. So, yeah. Awesome. And we put it all over the news, so, so, okay. So, uh, next step, you know, just that model. And then we’ll be, um, I think some time for you just to like, think about, like, Hey, am I gonna do a single family portfolio? Am I gonna do a multi-family? And then, and then when you make that decision, yeah.

Uh, then we’ll be here, you know, just to start doing that data room and then start doing all the outreach. The typical thing. Okay. Yeah. No, no. And that’s gives, gives you some time to kinda get my head around a few things and figure out what I wanna do and kinda go from there. So it’s, it’s a good, yeah.

Well if for the model, just send me an email to whoever I need to chat with and then chat with them and go from there. Yeah, we’ll do, we’ll do, just look out for that, uh, around this afternoon. So, so no good work. And then yeah, as you see, yeah, it’s good to be kind of, uh, it’s good to keep the strategy the same but in tactics can change.

You know, we’re just trying to do something that can get done and can close, so it’s really, uh, good the way that you’re amenable to that. Yeah. No, sounds good. Cool. All right, Shamara. Hey, too. How are you doing? Sorry about that. Really good. Uh, things are, things are going smooth and how’s it with you today?

Uh, good, good. Um, multiple questions. Yeah. Um. I got the, um, feedback from, uh, what’s his name? Uh, I can’t remember exact. Um, uh, Adam. Not Adam, I’m sorry. Uh, regarding to the, my, um, valuation on the project, uh, not the valuation, it’s more like, uh, the numbers, uh, regarding to the, um, the, uh, H V A C company Oh, yeah.

That we purchase. So it’s not really, when they put it on there, it’s, it’s not really a good deal unless I do some sort of seller financing in my mind, uh, I’m thinking that, uh, there’s not much money when I can get, give a return back for someone. Uh, it’s like less than 6%. Um, so, and the risk on that kind of a project is higher in my mind.

I don’t wanna turn it down, but I wanna see whether I can do some sort of seller financing out of him. And, uh, push back maybe three to four years to pay off that number. So if that’s the case, then well I’m look thinking on more kind of a, like his number, my terms kind of a thing. So that way I’ll push it back much as I can do the roll up side, so that way he will get the money on the back end rather than a front end.

Mm. Got it. I don’t wanna lose the deal, but also I don’t wanna pay him the right everything upfront. That means I’m taking all the risk. He’s not taking anything in my mind or the risk wise. Um, so that’s, that’s what I was thinking. Um, yeah. So, um, did you saw the numbers? Uh, so actually, actually didn’t, um, cuz David just took the lead and, uh Okay.

So, so I didn’t, so this is news to me as well. Okay. Alright. Gimme one second. Let me pull up the, uh, information, sir. Yep. And feel free to share a screen. Yeah. Um, ras.com. We can always try to get you on a call with, uh, David as well, because maybe that’ll be okay in the email. Okay. Yeah. Uh, that’s

all right. Let me see if I can pull this thing here.

Okay. And, um, regarding to the real estate, you said you, your funding car washes? Yeah, there’s one in, uh, in Edmonton. We just need to get, I mean, we’re still working on the down payments. Uh, it’s just through the introductions and, and the investor list. Uh, I think, I can’t remember how much was left. I think we had, we had less than a hundred thousand dollars left on a down payment and before we can close it, but yeah, it’s an admin and uh, we’ll work on it.

It’s the, it’s basically we’re buying it and then, um, what’s gonna happen. So basically we’re making sure that they, they make it more modern. Everything is coin, coin coin. So it’s just, they’re gonna just add value by making it more modern because it’s these mom and pop type of, um, carwash. Okay. Okay.

Interesting. Um, I was talking to a, a real estate guy, he called me yesterday. They’re selling five different car washes in Georgia. Oh. Um, and uh, they are already established, but the real estate is there. That’s the intriguing part. And

they’re asking 4.5. They’re making 500 K cash flow right now per year. I dunno if it’s a good deal or not, because I never underwrite a ca, I never underwrite the, uh, any of the, what do you called, uh, any of the, the car washes? I don’t know how, how do you underwrite that kind of a deals? Um, I can bring the deal to the, to the table and, uh, you guys show me how to underwrite then.

Yeah, yeah. Please send it over. Yeah, we, we can, uh, you’ll probably end up being free cash flow. We can do, we can do both multiple and then free cash flow, but then, uh, we just, like, like my, my guy David, he likes free cash flow a lot. Uh, but yeah, we’ll, we’ll do it $500,000 a year. Yep. And then in real estate’s already attached right.

Yes. Yes. Okay. Yeah. Cause I was wondering why it’s, I was wondering why it’s like 4 million for just 500 k uh, revenues small. Yeah, that’s right. That’s what I was thinking. That’s why I did not interested because I thought at least come close to a million dollars. So that way numbers make sense to me because you get paid off and the guys are getting paid off too.

Right? The who are spending money with me. So that’s the aspect. I think it’s, I, I never underwrite because the main multi-family part, I’m comfortable, I know how to do it. I have people who’s done it. So it just, uh, in nature, I, I, I can see the numbers very quickly and figure it out. But the, uh, car washes and other part I’m looking at is like the, um, the daycare centers.

Hmm. It’s the real estate is there, they have a program. Is there? Yes. There’s a, there’s a operational part there. But it comes with the real estate. Um, and I was talking to 3, 2, 3 different people. I mean, I, I, I turn it down on one deal in close to Atlanta area and I told them like, it’s the, my cap doesn’t make sense because even if I get it, I don’t think the investor going to make money.

It’s just like 6%. Wow. Yeah. And even it just, no one makes money. I don’t make money. They’re not making money. No one’s making money. So come up with something. I can use it as a real estate is there as well as the business is there. So these are the things I got it. Do do you underwrite any daycare centers?

Daycare? No, we haven’t had one. Um, either a school or a daycare center. We haven’t had, I got a school from Dubai, like a, it was like a, it was a primary school we had in Dubai, but this was like three years ago. Very old. But, uh, but no, uh, hap we’re happy to take it away. We can do all kinds. So, yeah. Yeah.

That, that, that, um, I don’t know how good, bad, ugly, but they have the operational side, but the real estate side there, and in my mind, most of these schools, like a daycare center is in a really good neighborhood. Like, I’m not saying really good neighborhoods, but the neighborhoods that have a really good value.

So like, uh, um, um, I have a double game I normally play, like think about on this way, right? Those things. It doesn’t, has to be a daycare center for next hundred years. Mm-hmm. If you can use it for five years, seven years, then you can build something top of that because most of the time these things are in a primary location.

It’s like junction or a place. So, um, it gives you the, what do you call the value, uh, at a value addition on couple of years down the line. As long as you can maintain it makes the money, investors gets the money. Then second step on maybe five years down the line is probably maybe like, uh, return it around and build something and or maybe expand the same school, uh, to a, to a larger scale.

It came to my head. I thought about on multiple angles. What what’s the benefits and all those stuff. Yeah. So lemme show you what I, what I have, um, please. The what? David sent it to me. Yeah.

Can you see it? Yes. Yeah. So right now, last three years, uh, yeah. So they were making 1 7, 2 4, 2 6. So they’re increasing every year, like pretty much, uh, 15%. Something around that range. It’s not bad. Not good. Not bad. It’s just, uh, in my mind because I don’t think he’s doing, he doesn’t do any marketing. He doesn’t do any advertising.

This advertising is flat. Uh, if we see it, it’s just, uh, he advertising in one place. Wow. So, really looks in my mind, that’s a good thing, not a bad thing, because that means there’s a, uh, able to scale it. Uh, whoever buys it. Now. Um, so there’s a cost associated there, a lot of things because this cost of good soul is a little bit, uh, deceiving in my mind because, uh, I’m working on another plumbing company.

I’m looking at the numbers, I’m realizing that part because this include the labor plus material. Normally I like the separate, the labor lab, uh, uh, the material piece. So that way I know labor part parties because regardless of that, I need to pay. So that numbers make sense to me. Logical. Okay. So, um, before you continue, so then why is it that you like to separate, uh, labor and material?

Just, uh, I didn’t hear that because that way the, the inflation goes up, uh, there’s, uh, two ways you can add the values, right? So the, yes, you need to add the labor cost as well as you can add the part and, um, the, the, uh, the material cost, right? Yeah, material cost. You don’t have a control in my mind, right?

Because it’s a material, if it is. Um, uh, heat pump is cost thousand dollars. Now it’s costing $1,500. You have to add 1500 plus shipping cost plus all the things to just break even. I don’t think he’s doing this thing right now. That’s why I think this is flat in my mind. Um, even though, and also he, he doesn’t add back to the, to the, uh, to the, uh, what is that, uh, to the, uh, the guys who’s buying from his too.

So, um, in my mind I think that’s, uh, eh, not a good thing. So the, the, I think there’s a very large way to improve this part. That’s what I’m thinking. Why is that? As credit card fees or, or twice the price of his, uh, repair fees. I find that very interesting. Um, so the, what I’ve seen on the most of the guys, they’re using as a more like a line of credit to get the, uh, things done, done quickly, uh, for the, bring the product.

Um, and they need to have credit line, certain level or Okay. Kind credits to do that. There’s the people doing different, different things. At least what I seen of, at least I seen at least, uh, p and l for us at least 10, 10 plus PNLs from different, different H V C guys and plumbing guys. So they use it differently.

So these are mom and pop shop, so they, they can be anything usually. Yeah, that’s true. Good point. Yeah. Yeah. This is the part I don’t understand. Computer expenses went double the next year, 16,000. So I don’t know what what he did because according to him, he’s not doing absolute nothing. So, but I don’t know what it upgraded because it can be his upgrading his com home computer.

Yeah, exactly. Well maybe he’s just writing it off, uh, maybe once you get book or whatever. Yeah. Um, so once you go through the, all the numbers, uh, like net income before taxes, this, this is the numbers. Uh, like 79,000, 74,000. So it’s like a very ridiculous, right. It’s like a very small number. Yeah. So you can’t, you can do anything with that.

That’s the challenge in my mind. Now he’s asking 2.5. Um, then I talk to him a couple of days ago, he said, thinking about 1.8. It’s like a huge gap. But I think I, I, I don’t know. This is the challenge I have because, um, how do I give back something because it’s a cash written, it’s like 5%. Then I put a low on top of that.

I’m not making anything here. Right? Hmm. Yeah. Um, so what I do, so I guess I do a few things. Um, I’m going to, I think we need to,

because cash and cash returns a bit a bit. Difference. See, the thing is that they, they know some things that I don’t see a face, but, uh, I remember that it’s pretax. Yeah. It’s still very low, man. Yeah, no, it’s, it’s, I think it’s a bit too low. Uh, I agree. Yeah, that’s what I was thinking. Like I was thinking on paid, at least these guys paid off everything.

They can take it home at least 200,000 or 300,000 actual profit. You know what I mean? So I’m just looking at this. So then, and then that’s annual, so that means that it’s pretty low. Yeah. Yeah, that’s pretty. But let’s see, uh, return on equity. Okay. So it’s like a 4.8 or 4.8. Yeah. It’s basically nothing.

Yeah, yeah, yeah. No one makes money on this thing except him because he, he’s just doing, yeah, because he is. Yeah. So I, I’d, I’d really, um hmm, yeah, I’d, I’d really go like, I think I’d really ask the seller and, and did he send you the tax returns or did he send you the actual p and l? Yep. He send the p and l and tax returns.

There’s no much difference on those things. Oh, okay. So he is actually honest. That’s good. He’s honest guy. That’s a good thing. That’s why I was asking, maybe I can sit down and ask him like, Hey, if you sell this thing right now, you’re not gonna make money. Literally, yeah. You’re making absolute nothing. He has no broker.

Right. Is this him alone? Nope. Uh, I don’t deal. I try not to deal. I normally call these guys and ask him, I do cold calling. Good. No. Well that’s good. Brokers and waste of time. And uh, yeah, because once we go through the middle man, real estate didn’t make sense, but the, these stuff in my mind, at least I’m building the relationship.

Maybe I can buy it right now when he bring it to a certain stage I can buy it from again. So at least he will have that dialogue and the relationship. Good. And how so? Um, that’s why he was thinking about 2.5. He said he want to go for a, uh, 1.8. So if I do 1.880 still is not a good number. Right. Return of equity wise, it’s 6.79 cash on cash, um, 7%.

So, um, it’s still bad, but at least you’re getting at least it’s, it’s not, it’s not shit. Um, yeah, that’s right. Yeah. Um, yeah, I, I, uh, only way this is can work in my mind is a hundred percent seller financing. That’s where going on. I, I agree. So does he have any other businesses he’s running? No. No. This is, what is he running And, um, this is his, this is a second generation guy.

Yeah, no, yeah, I find it, I find it a bit strange why it’s so, um,

I’m just looking at his notes. I think he’s running all his stuff through here too, so it’s like, maybe we can add another 150 K top of this thing. Um, yeah, I think he’s probably running his personal stuff on there too. That’s right. That’s right. He was, he was in pretty much, you can add 250 K, so it’s like if you take it off everything, um, still in my mind, it’s not like a huge difference, right.

Once you pay the taxes. No, it’s, it’s not. So, so, so, yeah. So I’d, I’d really say, um, and let’s see, let’s think, let’s see. M O I C because, uh, M O I C, he was a bits, okay. So I don’t think he finished the, I don’t think David finished the M O I C calculation, but, but really return on equity and, and return on equity is the most important thing at the end of the day.

Um, yeah. So, okay. Okay. Sorry. I see it here. Oh no, he properly did it. Uh, or did he, why is it negative? Yeah, that’s what I was trying to figure it out. Yeah, because he was telling me that he was having a bit of a delay with the M O I C calculation.

Is there any specific reason why is negative? Uh, let’s click on do, uh, what was it before? It was just point, it was a decimal. Oh yeah. It was like this. Okay, so let me just, lemme just do a quick, uh, look up on my site. So I’m trying to remember M O I C versus return on equity. Usually very similar.

So multiple on investment invested capital.

Okay, so it’s supposed to compare the purchase price with the end date on exits, cash flows, total value. Yeah, I’d, I’d really ask. I’d really just ask about that. I’m not sure. Um, to be honest, return on equity is really easy to understand, but in this one, uh, yeah, this one I’m not sure. Um, the reason, yeah, the reason why we have this is because if you were to, you know, sell the shares of this, then at least we know what we’re valuing the shares at.

Uh, that that’s the only reason we do these three, um, calculations. But yeah, I think, I think next step is, uh, you know, we should probably, so on your side, we should just ask him and ask him to, to just take a look at why is it that, and, and last thing, what’s the evaluation that David came to based on this, uh, is there evaluation that he came to, or, or he just came in up with the, what’s the evaluation?

He, he suggested, uh, He doesn’t give any valuation. I don’t see anything at least. Okay. Wait, check this out. Total. So what’s that in red total? Well, according to him it’s $971,000 minus. Yeah. So is he not saying, so this is, this seems to be a negative valuation. How is that? Yeah, that’s what I don’t understand is that, uh, how we come up with these numbers.

Yeah. So, okay, here is some next steps I’m gonna do. So next step is I’m gonna get, uh, David to say evaluation. Cuz the way that it is, is, yeah, at least we, we know the numbers a little bit better, but then we, we need to get the valuation and then based on the valuation, then we go say to the seller, Hey, why is evaluate, why are you selling that at this, when evaluation exists, that’s the, that’s the most logical, clean way to do it, right?

So I’m just gonna go to David and then just say, Hey, you know, evaluation from this model. Yeah. And clarify, clarify the, the problems and questions that you had in getting the M O I C. That’s the cleanest way to do it, but, uh, that, that should take about, um, one or two days, but in the meanwhile. Okay. Yeah.

But in the meanwhile, yeah, we can always just ask him to, to say, um, we can just look at the profitability of the deal and say, Hey, why is, you know, just ask some questions about the profitability of the deal because you, you’re getting 6%, uh, 6% is not enough. You know, we need to get like in a, in a low teens, especially because the interest rates are gonna be so high, right?

Like the interest rates are high. That’s right. So like, how is it possible for him to sell it? Was he intending to sell it or did you, when you quote called him, did you give him the idea of doing it? Yeah, he want to set it because he won’t retire. Okay. So this is what he’d done his adult life, right? His father done it, then he took the business and he run it.

I don’t think he’d done a good job, but it’s his company, right. Thank you. So, um, yeah, so, so lemme so, so last thing before we go, let me look at, um, so I’m just going look at something that David sent about this. Just one second. Uh, so C two

financials investors. Ah-ha. I think I found it. Did I find it

Plumbing?

Net present value.

Yeah. Okay. So,

so I think it’s negative because remember how people are saying that, uh, so I’m gonna confirm it’s a, but you know how when it comes to this net present value thing, how people, some people, they say that’s, it’s when it, it’s when, um, So he’s using this to get the i r r, cuz you know how when the net present value equals zero, that’s how you get the i r R.

You know, like, I don’t know if you remember that, but it’s just when you get, when you get the formula for i r r, um, it’s like, how much money do you need for the net present value to be zero? Um, so I think that it’s really, I think that you have to just ignore the negative and then that’ll be it. But I, but don’t go over that.

That’s, don’t quote me on that. I’ll just go and confirm it with him. But I think the point of what he’s saying is that the valuation is like no more than one point something million because I see it in the original sheet here. Uh, it says 1.6 million total enterprise value negative. And I think it’s because he was, you have this net present value thing here and you have to subtract zero from the, uh, let me look at the formula.

Can you click on the formula he used for that? If you double click on, uh, NPV at the top. So he got the, oh no, I think me look this. What did he use here? Okay, so he got the, let’s see, so all these values on the bottom. Let me enter this thing. What is that? It’s the, this is a profit, I think this is a profit number, right?

Uh, let me see. On the, yes. EBIDA negative EBIDA plus depreciation. So he is adding depreciation. Let’s go to the top. It’s the actual true cash flow, right? Say again? This is the true cash flow. The what? Cash flow. True. True cash flow. That means you pay taxes, you pay everything. Then after that, this is the number, right?

That’s all I assume. Yeah. Yeah, exactly. That’s what I, that’s what I think as well. Yeah.

So then, okay, so then I’m trying, so then let’s double click on that again. I just wanna see where, when December came from. So then he, is this B six eight, the value, right? Then here in PV calculation, then the rate, rate is this. Right? And the value one, value two, value three. Right. So he goes through up to, I think, yeah, so just pretty much end of the like five year product time.

Oh, okay. So yes, so discount rates, comma, and it’s been a while I’ve been in Excel. So comma means, so it’s already used in the NPV V formula that’s built in to Excel? Yes, yes, that’s right. That’s right. Yeah. Yeah. N okay. NPV value and then all these other values and then that gets, mm-hmm. Yeah, no, I think, I think you just ignored the, I think it’s an absolute man.

You probably just ignored a negative. Uh, but don’t quote me on that. Uh, we’ll go to him and check, but, uh, I’m pretty sure, and let me look at NPV form. And cause u usually we try to get the CFA on the Monday calls. Uh, cause usually they’re better at me than this. But let me look at the formula. Yes, I want to come, but I was talking to a, um, potential buyer, uh, on the, uh, seller.

I’m sorry. Oh, seller. Seller. And he took the time and he’s not that big, but I don’t want to, you know what I mean? Like, I’m in Atlanta, I just want to build a relationship, right? What thing happen was like, okay, so he keep talking and talking and all the issues he has and I was listening. It’s like, okay, let’s go.

Oh, fair, fair enough, man. So I’m just getting, so I’m not sure about the, I think the enterprise value always is absolute, but then it’s definitely not profitable, man, because if you’re getting negative on the npv, it’s definitely not profitable. So I’d really, uh, yeah. Yeah. Cuz you say you’re doing a valuation at a 10% growth rate, eight time, 8% discount rate on a future cash flow is for that much future cash flow that you projected out.

And then you’re getting that absolute value. It’s negative, which means it’s unprofitable. I think that’s all that means. Yeah. Yeah. So the, uh, yeah, so the, that’s what I was thinking. Unless he’s trying, willing to do something on a hundred percent seller financing, I, I need to let him know that, Hey, we can do anything with this thing, and I don’t think I’ll make money.

You will make money, but I don’t. Right. So the, um, and, um, yeah, so that’s, that’s a challenge, I guess. Yeah. And then you just go the room with the classic, uh, Chris Voss, how am I supposed to do that thing? Right. It’s just like, how am I supposed to do? And Chris Voss, everybody in kindergarten knows that book now by now.

But, but you get it. It’s just, it’s just like, how can I do this deal? Because, uh, like, I’m gonna lose money from buying your deal. Can we make it so that we both don’t lose, like, I don’t lose money? Like, is that reasonable? Right. That’s right. Yeah. Yeah. That’s right. That’s right. Yeah. Yeah. I told him like without telling him like, Hey, um, You know, I need to pay other people too, right?

So then he was like, yeah, yeah, I know. It’s like he, he, he maybe, I think he did not cut backwards, but that’s why he went from 2.5 to 1.8. Then I, I just want give a reality check like, Hey, that number also not that good. Even though you feel like it’s good for you to retire. I understand that. Please. Unless something it works both of us on the, on the back end.

Uh, yeah. Yeah. And also, and also when, be careful when, because like you said that he’s probably adding, like, you could probably move a hundred K, but Yeah, because I’d really keep that as an error, margin of error because, um, we were talking to somebody who’s Mau, who launched his, uh, Maud launched his, um, his business acquisition fund to buy, uh, equipment leasing deals.

And then he said that, uh, like he adds error, margin of error. So, you know, I would really say, oh yeah, try to tell me all the things that you’re adding on here to make it seem as if the numbers are better. I’d really just use this as the base case. And then I’d even be more cautious. I’d probably say, oh, that’d probably the real number.

Or probably 4% just to be cautious. Right. Because you never know. That’s right. That’s right. Yeah. Yeah. Yeah. No, I think that that’s a challenge because, uh, he didn’t ran this thing properly. If he ran properly, the area he lives, he doesn’t have a competition. More, you come close to the city, you have more competition.

So you just have a little bit of marketing. I, i trying to make, I’m not trying to make it good, good. But I think if he was smart enough, I was, I mean, his shoes, he have the resources. He just needs to put it on right place and do a good marketing campaign, because all the way down north of Georgia, there’s a company doing almost $7 million.

Hmm. And I was, I, I was talking to the guy in the morning a little bit. That’s why I was late. And I was asking the questions he was doing seven, 7.5. Um, I dunno whether he will sell it or not because the younger guy is like in forties that he was saying I would rather not un close to Atlanta area because you’re going to compete with another 150 behemoths who can spend more money on the marketing side.

But I would rather in the top on the north upper of Atlanta, so that way that’s, you don’t have to spend that marketing dollars that much. Um, he was, I learned that thing on like literally like a couple of days ago. I think if he’s, he’s in the right location. I don’t think he’s spending enough money on certain things and he’s, I was, there’s another funny part is I was listening to brand Cardones business partner Brandon.

They’re trying to do the H V A C too. This is going to, oh, this is H V C gonna be a very competitive industry for the next 10, 15 years. Um, and uh, I learned from them, if you are running. If you’re running average, average per person, you should make 350 K per per person in there. If you’re doing efficiently, you should come close to 500 K.

So he have a 17 people per person. I think he’s making like a 200 K or less than that, I guess. Is it? Is it this guy or another one? This guy. This guy? Yeah. Okay. So making 200 K mean him as the individual? No, so the, uh, individual technicians there. So once you divide by the total dollar value that you’re getting, like assuming it’s 2.5, so it’s less than, um, like 170, something like that, right?

It’s 200, but it’s less than that. So that means either per year these guys need to do more work or they need to cut back. Um, there’s a video there, this guy, the brand and the business partner for Grant Cardone, and he’s asking two different business H V A C owners. One guy saying raise the hand and said, Hey, um, Oh yeah, I’m, I’m making 3.5.

Then how many people? It’s like 17 people, or 17 or 18 people. Then the guy on the other side only saying, I’ve made 3.5. How many people? 10 people. It’s like that’s the number you need to make. You are bleeding money right now because you’re paying more money, but doesn’t means you are paying the future investments.

That’s what the word he used. Future investments and you think that you will catch up, but you need to make sure you are efficiently there. 350 is average. So if you’re not on 350, um, even the funny part, I learned this thing. This is why I got you to be conscious about this piece. He show a diagram, it’s stuck to my head.

The 3.5 is just average. Then there’s a layers there, and if you can get it to a, at least one guy was talking on there, so I think he’s like 15 million or something like that right now. His company, he can sold for 40%, 45 times. I did not knew that part. I thought it’s like a maximum. You can do like a 14 or a 15 times.

Times EBITDA is what he Yes. Wow. That’s, that’s, that’s like tech, that’s like a tech company. That’s great. It’s more than, that’s what I’m saying. I think the case here is it’s the, if you build a really efficiently company, I really believe that’s why I don’t think grant card don’t spend money, you know what I mean?

To, I, I feel he’s a smart way. I look at is he’s one of the smartest guys in online. Um, not about the coaching side. He’s not worried about that part. He’s just putting his name out there so he can raise money to get the properties or, uh, raise the money to buy business. So he sees something right. Uh, side in my mind.

Well, he’s really, yeah, well, cuz, cuz what he does, he cross and he also cross sells because he gets people to buy his courses and then he cross sells them into it. It’s like, I’ll teach you how to buy real estate. And it’s like, okay, here’s, instead of buying real estate, it’s so hard to do it on your own.

Just buy ours. So he, you know, and then, uh, and then he doesn’t do, he doesn’t do many sophisticated funds. Most of the funds, well sophisticated. Like he does a lot of Reg A because he’s targeting people that don’t have enough money to invest, like, so that are unaccredited. So it is brilliant accredit. Yeah, hes brilliant.

Yeah. I, I saw that thing as a bit, this guy was talking about and he was going through like a ladder of that thing and yeah, if we can get to 50 million for 14 to 50 million and with the efficiency and he’s saying, don’t worry, I will sell you a company for like 40 times. That’s why he said, wow. I’m like, whoa.

It’s, it’s a good path. I think I’m in a good path, but I need to figure it out. A company that can do all these things. That’s why I don’t want to. I don’t want to, uh, doesn’t wanna take, I wanna focus on this thing and do it, but if I get other deals, I wanna do it because this will take some time, but I can do the other deals while I’m doing this thing.

So that’s why I, I love the sense of focus. And then, um, and, and the few closing remarks too is like the, the 17, the people that, the 17 employees, I mean, if they’re full-time, yeah. But then if they’re not full-time, then no, because some people they have, it’s right. I don’t know about hvac, I’m just talking just in general.

Like, I mean, some people just have it where they have mul, many part-time people that get paid less. Um, but I’m assuming that it’s not, that’s, that’s why it’s more expensive. So that’s, that’s the case. Second thing too, is one other thing that you mentioned during the conversation was you are doing, so you’re doing the, the calls to the, to the owners.

So is that, so you’re really used to it and it’s easy, right? Is that part really, uh, smooth or. Yeah. Um, as if I can get, if I can, if I can get out from the, the gatekeeper, uh, the, the receptionist to who it is, if I get it to the person, I won’t, I can articulate, well, I can, I’m not saying, uh, I’m a great salesperson, but I’m able to articulate and show them, like I, I, the one guy I talked to for this guy, I, my pitch was like, if you go and sell the company right now, you get two times, three times maximum.

Three times, right? But if you come with us and if you sell the company as a consolidated, uh, companies, and your revenue may be 3 million, but with all the people combined, we can cross 10 million at that time. Your multiples will be five times. That’s conservatively. I’m not telling 14 times, 10 times, I’m telling conservatively.

And I think it’s a win-win situation for you, me, and whatever it does. And also I always use this verbiage and I try to do this thing. It’s a win-win situation in my mind. I don’t want a hundred percent of your company. I would like to have 80 20. I have the 80%, you have the 20%, you have the upside on that selling that piece.

That’s number one. Number two in my mind is like, whatever risk comes on, you are in there too, right? Yeah. So, so it’s, uh, I don’t, that’s what I pitched normally. I don’t, I don’t try to get the, the game, so, uh, well, well, well, no it’s good because I think, cause there are some scripts cuz we know, we know a lot of these people like Bruce Whipple, like acquisitions are, we, we know a lot of them, right?

And then, so one thing is that they have a lot usually I see at the point they’re just trying to get people onto the, um, to convince them to sign, to send the, sign an NDA and then get the information over. Um, but like, I think as long as you focus on the value over the sales tactic, you just focus on the value and the results and the points of it.

Then usually like all these tonality comes after anyway. Uh, cause we’re more focused on the capital reason side as opposed to origination. But yeah, no, I think, I think as you said, I think it, when you just focus on the main points instead of like all these like slimy tactics, they’re, they’re good. Um, then, but then they’re just bonuses.

But then if you have like the really good voice and then the offers, the offer is bad, it’s not gonna help it. So that’s what we notice. We’re doing some of the outreach. Yeah, that’s fine. That’s fine. Yeah. Yeah. And I’m doing this thing and, um, in my mind, I think, uh, once I get to a one, honestly, one, if I can get a good, one stable, um, platform company, I can tuck in like four, five companies.

That’s why I never turn it down. A like a small business guys want to talk like they, they don’t have a lot, right? They have like a one guy with the two trucks or a two guys with the three trucks, that kind of a people. I can plug and I, I, I will, val, I can add the value right out of the gate within, like, within one year, three period time.

I can expand it very quickly. That’s my thought process. Uh, that’s what I’m thinking. Yeah. Nice. You know, you’re onto something. I, I like, I think the focus is needed. So then next step is we’ll just get, um, I’ll just confirm the confirm evaluation. Like, I think that’s what the valuation was, but absolutes, like, I don’t think it’s negative, but I’ll confirm that.

Yeah. Confirm. Confirm what he’s saying for, for the M O I C. And then on your side, if you were just to, to, to say, Hey, you know, explain how am I supposed to do this with 6%? Uh, and then, uh, the next step we’ll just get you over the feedback from the c f A and then we’ll always be, uh, pushing forward, like if and when you find a deal that is a better fit or if you’re able to negotiate seller carry with this guy.

Yeah, definitely. Um, the real estate stuff, once I get it, I’ll, I’ll send it to you. Uh, I, I was, I talked to the broker, uh, yesterday and, um, I was keenly interested on what’s going to happen on the, the, uh, daycare market. I don’t have much background or experience on that piece, but, uh, I, every place, at least what I’ve seen on the daycare place is, is in a really good, um, locations.

So I won’t to get the location, maybe I will run for a couple of years, but maybe expand, um, like Northside. The, where I live, the, the, the school district is really good, right? People moving there. So that means there’s always marketplace for that kind of a things. Um, it’s just my thought process behind and, uh, I, I don’t know what, I don’t know that piece, but the numbers wise, look appetizing to me, the locations they have.

Um, that’s, that’s why I think, um, one, I think if it is a conservatively, numbers are pretty good enough. I think even one we can pay off the, um, the, um, the, uh, the, our, um, especially the, uh, the, uh, Uh, the people who raising the money, right? So the, especially the investors. Then also we can build it up something bigger on later.

Uh, so win-win situation in there too. So I was thinking little bit of pragmatic. I trying to be pragmatic. Well, it is good. And the only thing I’m was wondering, um, I mean, curious about the macroeconomics though, because, uh, I mean, yeah, people are still having kids, but isn’t the thinking about the birth rate, isn’t the birth rate slowing down too in the United States?

That is true. I thought about that part. I thought about it. Yeah. Macro part and also the other side living facilities. Yeah. Yeah. So, uh, I look, I look as long as, as long as it’s a fast growing neighborhood, right? Fast growing neighborhood, fast growing area, you know, then it, it, it can kind of counter it.

But I was just thinking like overall, like, I’m like, oh, the only people that are still having kids are, um, Brazil, Africa, kind of depending on where, and then. Yeah, the whole world is just slowing down on kids, eh? That’s right. That’s true. I agree. Hundred percent. Yeah. I thought about that thing. The reason is like, I was looking at the senior living facilities, then it just popped up, so the guy was saying, yeah.

So you guys are doing senior living facilities too, right? Yeah. Well that was, that was Henry’s deal. And then, um, another one. Yeah, he’s doing the next one we’re working on. Uh, the, the another, what was, what was another? There was a fellow Umk in the uk he’s doing, that’s exactly what he’s doing. Senior home living facilities, but he is doing that in the uk and so those two that were, we’re currently doing in that sector.

Okay. Another one, another one we have Mario Henry. He’s doing a ground up construction in that as well, so it is three. Okay. Interesting. Interesting. Yeah, because there’s a one, I talked to him. Um, if I get the numbers, I, I, I’ll, I’ll, I’ll send it to you guys on that piece. There’s a two, uh, one in close to literally close to my house.

The, the, the part, it turned me off. That’s why did not talk to, on the broker or details is only 60% occupants. Is that bad? How do you look at the occupancy on those deals? For for, for what? For real estate or for what? For the, uh, the, uh, senior living facility. See, see, I’m not sure because I, I know more so that one, I’m not really specialist in that.

I know that in general, once you get 65 or less, it’s kind of, it’s really dangerous for, for commercial in general. Uh, it’s really dangerous when it gets, like, cuz usually, you know, like 80%, you know, 80% is good once you get below 65, you know, it gets really questionable. But I don’t know, for senior, uh, living facilities, but then for senior living facilities in general, I’m just talking more in general because I’m not really specialist in that.

But, uh, I mean, you know, you have this whole. Wave with is the opposite problem. So when people are not having kids, but then everyone is old, so I’m saying if everyone is getting old, uh, the baby booms are all getting old, everyone’s retiring and then they’re all selling their businesses, we’re always being told that, and the occupancy rates is below what would be considered a good occupancy rate for commercial real estate, then why would it be below 65%?

So I’d probably be more cautious, but I’m not a specialist on senior home living facilities, but I I, I don’t think it should be as low as 60% in, in my opinion. Okay. Yeah. Yeah. There was a, a deal on 66000006.65 or a 7 million, 60% occupancy built on 2012. Nice facility. Uh, I didn’t talk to the guy, but I saw the numbers, like high level overview memory care facility and like that, and it’s 60%.

That’s why I was reading and I was thinking to myself like, why it’s 60%? So that’s why I was thinking about myself, um, because I tried to get it like 80 to 90%. That means. That means I can add value and also I can look back and think like the risk is not there much, right? At least it’s working on your number.

Um, yeah, let me look around. If I get something, I definitely send it to you guys way and can tell me underwrite and let me know what’s going on. And same thing on the car wash side. Um, I’m getting like a lot of car washes. I dunno what’s happening on the, in US or at least Atlanta area. I’m getting like five car washes.

Like suddenly I was like, I didn’t even think about car washes until like I got 1, 2, 3 fourth email. I’m like, okay, I need to open this thing in la. What’s going on? Well, yeah, and, and uh, yeah, if you want to talk to, uh, ADI, he’s doing a car wash. So he, he express his mind, uh, he, he successfully closed like his first one, so, uh, I just really talk to him.

We can do, we’ll do the introduction to him actually today and next up on our side will we, we will number one, do the, yeah, just check the numbers and get the confirm what the valuation, what the negative means. And, uh, but I think. Confirm that means then it’ll be on standby for the other deals. Um Okay.

And if and when we finally one that makes sense, then we focus on Reason Capital for the next one. That makes sense. Whatever sector it is, so, okay. Definitely, definitely. Alright, thanks Nodo. I appreciate Yeah, thanks. Good work. Talk soon. Yep. Thank you. Yeah, thanks. Bye.

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