614: The Cash-Flow Boosting Businesses that Savvy Real Estate Investors Own
BiggerPockets Real Estate Podcast
BiggerPockets
4.8 • 16.5K Ratings
🗓️ 26 May 2022
⏱️ 81 minutes
🔗️ Recording | iTunes | RSS
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Summary
Knowing how to buy a business is a lot like knowing how to buy a rental property. First, you’ll need to know the price of the asset, then the cash flow, followed by expenses, and finally the structure. Because buying real estate is perceived as “simpler” than buying a business, most investors decide to go the real estate route—but they could be missing out. Codie Sanchez saw this opportunity when she was working in venture capital and decided to try out the business buying route herself, just on a smaller scale.
Codie can be perceived as your classic “value-add” investor, which much of the real estate investing community can relate to. She finds a business that has a strong foundation but lacks the tech or marketing to grow faster or increase its profits. When a business has a strong underlying value, just like a rental property, it’s easier than most people think to “renovate” it into something that will sell for far higher.
Codie stresses that buying businesses isn’t so different from buying real estate. She also categorizes which businesses real estate investors should buy if they’re looking to maximize their cash flow and minimize their expenses. With some help from Codie, you could be relying on much more than just rent checks soon!
In This Episode We Cover
What a “value-add business” looks like and how to find undervalued businesses
Evaluating and analyzing a business purchase and which key metrics to calculate before making an offer
Buying off-market businesses and why most business owners never consider selling (until you ask)
The three questions every investor MUST ask before buying a business
Buying instead of building and how trying to build a business can cost you much more than just money
Becoming the business owner, not the operator, and outsourcing everything you can
And So Much More!
Links from the Show
Hear Codie’s Interview on The BiggerPockets Business Podcast
How to Use the DISC Profile to Communicate Effectively in Business
“Contrarian Thinking” Newsletter
Connect with David:
David’s BiggerPockets Profile
Connect with Rob:
Connect with Codie:
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Transcript
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| 0:00.0 | This is the bigger Pockets podcast show 614 |
| 0:04.4 | That's why I like to buy instead of build as much as possible and people are all like this because the secret is we're not that creative |
| 0:11.8 | like venture capital you know |
| 0:14.9 | Start-ups and founders. They're like super creative. They're coming up with the next Tesla |
| 0:18.9 | I don't have that in me, but I can definitely take a business that creates financial models online |
| 0:23.8 | Give it a new website and upgrade some pretty lipstick on the pig and this thing can be a lot more valuable than it is day one |
| 0:30.8 | What's going on everyone? I'm David Green your host of the bigger pockets podcasts the best real estate investing podcasts in the world |
| 0:38.0 | I'm joined today by my good friend and co-host Rob Abisolo as we tackle a very interesting topic |
| 0:45.4 | It's how to make money in business that is related to real estate not necessarily just real estate itself |
| 0:52.1 | Rob so glad to see today. How's your day going so far? |
| 0:55.1 | You know it is going really great because for the last week or so |
| 0:59.4 | I was a little bit down for the count a little under the weather had a throat |
| 1:04.5 | infection of sorts and |
| 1:06.5 | I'm all healed though into the ENT. They did a procedure. They fixed me |
| 1:11.1 | I looked at my dock in the eyes and I cried and I said |
| 1:14.2 | My wife and I will never never be able to pay you back for this majesty that you've done so |
| 1:20.2 | I don't even know if that made sense, but I'm feeling good. I guess is I guess I could have just said I feel good |
| 1:25.8 | I feel good. I recommend you go follow Rob on Instagram at Robbilt and |
| 1:31.2 | Look at did you post the picture of the two vials of fluid that they took out of your throat? No, no |
| 1:36.8 | I didn't want to do that to my I let people |
| 1:39.8 | Let people like message me and ask I was like if you want to see this message me and I'll send it and I was like thinking |
| 1:45.4 | It'll be like three people and it was literally like 50 people. They're like well. I stopped after 50 |
... |
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