Business Acquisition Strategies and Insights!

🎉 As we wrap up 2024 and set our sights on the opportunities and challenges of 2025, this episode dives deep into how to prepare for success in the year ahead. From diversification strategies to navigating shifting markets, this conversation provides practical insights and bold predictions to help you position yourself for growth and stability in an uncertain future. 
 
📌 Key Takeaways:  
✅ Diversification Beyond Buzzwords: Explore why diversifying income streams is essential for adapting to changing markets and securing your future. 
✅ Real Estate Market Realities: Insights on thriving in a balanced market and why skill is the key to staying ahead. 
✅ Business Acquisition Strategies: Discover how to identify underperforming businesses, implement systems, and scale for long-term success. 
✅ Complementary Ventures: Learn the benefits of combining real estate with other industries for greater stability and opportunity. 
✅ 2025 Market Predictions: A forward-looking perspective on interest rates, cap rates, and the emerging opportunities in a dynamic economy. 
 
As we enter 2025, this episode offers the tools and mindset shifts needed to capitalize on the year’s potential. Whether you're an investor, entrepreneur, or someone seeking financial freedom, tune in to get ahead of the curve and make 2025 your year of transformation. 🌟

🎬 Chapters
00:00 The Importance of Diversification in Income Streams
06:48 Navigating the Real Estate Market Challenges
13:57 Business Acquisition Strategies and Insights
20:07 The Future of Real Estate and Market Predictions

Transcript

Real estate, there's some days where there's some times where it's 90 to 120 days before you get paid again. And sure, you get paid really well, but that means we're eating ramen for 120 days, you know? And so building up these additional income streams, if they're complimentary to real estate, great. But I think for me, I really found the power in the diversification because when you go all in on one thing, when that one thing changes with, you know, factors that are beyond our control, you're of up shit's creek. 

Welcome back to another episode. This one kind of we're at the end of 2024 going into 2025. Kind of just want to take time and talk about our personal goals, whatever you want to call it 2025 and where do we see the market at it in 2025? It's 2023 was rough 2024. I really any better. What do you what do you see on the horizon and how are you going to capitalize on that? So, yeah, I think I came into real estate in 20, well, 2019 is when we bought our first property and then 2020 bought our first investment. then 2021 I got licensed. And so I kind of came up at the time where if you had a pulse, you were doing well in real estate. And I fully recognized that I had the wind at my back, which is why I was able to do so well. And when you come into a market like we're in right now, where the interest rates go up, taxes and insurance go up significantly. It takes a lot more skill to thrive in real estate. And whereas the start of, or the end of 2023, there was 4,000 real estate agents in this area. Right now there's probably 2,500, if not less. And how many of those are active? Like I have my license, but I'm not active. Right. And that's a significant portion of them because when the wind's at your back, you find the buyer that wants to buy, you're gonna get a deal. There's plenty of opportunity. When it's a strong seller's market and a strong buyer's market, you can close deals pretty easily. When it's a balanced market, the Pareto principle really takes into effect because 20 % of the agents are gonna do 80 % of the volume. And I believe the same is true on the commercial side is that 20 % of the brokers are gonna do 80 % of the business.

So, In this type of market, you got to get more creative. You got to do the things that people aren't really willing to do. You know, get out, take more meetings, more cold calling, more direct mail, more everything. If you're not, people get comfortable in a good market where the wind is at their back, where maybe they're cold calling a few days a week and they can get by and close, you know, bring in 10, 15,000 and gross commission income a month. But as soon as that shifts, it takes, I'd say 60 % more effort to stay at the same volume.

And so when we came into that, were moving brokerages, trying to figure out our path. set up our own brokerage and all that stuff. And we realized that I just didn't want to do the things that were required to be successful, you know, at the size volume that I was doing. And I did, you know, really good volume, but it took a lot of my time and I was just burned out by it. And so we started evaluating like what fills our cup and how can we implement other things to kind of support that. 

During the transition, I went and got my CDL. started driving trucks because I really wanted to learn that industry so that I can increase my income streams. And if I can just create five different $100,000 income streams, and my wife grades $100,000 income streams, we're at a million net. And so with me, I'm focusing more on the trades that aren't going anywhere. I want to buy businesses that are in the trucking industry that are plumbing, HVAC, electrical, and take my business acumen to go and implement the systems to make those thrive. And am realizing that it's going to take a time commitment upfront that most people that buy businesses aren't willing to do. They don't want to be in the business. They want to be straight passive income stream. I think for passive income is a joke. But if I can go in and work on these businesses, build them.

Package them together, sell them for a 5X multiple in five years. That's pretty good exit for me. So for me, it's building up those income streams and the people that I meet along the way that want to do commercial real estate. I still have my list of investors that I help find deals and doing development projects and raising capital, doing all those things. So we still have that, you know, in the works, but it's building up all these additional income streams because… When in real estate, there's some days where there's some times where it's 90 to 120 days before you pay to get and sure we get paid really well, but that means we're eating ramen for 120 days, you know? And so building up these additional income streams, if they're complimentary to real estate, then great. But I think for me, I really found the power in the diversification because when you go all in on one thing, when that one thing changes with, you know, factors that are beyond our control, you're kind of up shits creek. So,  Diversification, think, is an overused term and it can mean very many different things. can diversify your real estate investments, can diversify what industries you're in, you can diversify your location. There's so many different ways to go about it. But from what I've seen, what's the term about the most millionaires were made in real estate, the most billionaires were made in business? Cody Sanchez has a thing about you can buy a piece of real estate for a million dollars and in a few years maybe sell it for two million like that'd be great but in business you can buy a business for a million dollars and you can sell it for 10 to 20 million just by going in and implementing the right systems increasing your market share all these things so it's much more relative I think to the effort that you put into it. Now a shared real estate you can buy a good deal you have you know power of having an asset against it. But if I can buy businesses that also own real estate, I mean, I'm just protecting myself even further. So at a high level, that's kind of my philosophy is buy businesses that are complementary to the real estate and then also buy businesses that have nothing to do with real estate. The transportation industry, trucking, it's going to be around if all the real estate in the country crumbles because people still need to ship goods. 

It's still how we move things. it's something that I've I've really grown to enjoy it. I can sit in a truck, drive 16 hours and just listen to podcasts all day. I mean, I'm listening to Christians talk to atheists and all kinds of different business philosophy, Charlie Munger, everything you can think of. And I think it's just developing my mind more where I'm kind of back into that intro, what is the term about? You live two lives. It's like one where you think you know everything and then the second is when you realize you know nothing. Yes. It's called Dunning-Kruger Effect. That's right. Where that turn comes from. Yeah. And then I've just been discovering that and I'm enjoying this journey a lot. Just realizing how little I know about so many things. And so just enjoying that part of the journey and diversifying. So, but I'm definitely interested to hear your perspective on the diversification and where you see 2025 building, I think that there's never a bad time to buy real estate. And I think being in commercial real estate, there's so many different asset classes where maybe multifamily doesn't make sense right now, but industrial is doing really well and they can't build it fast enough. So if I buy some land, do some land development, I can either build the industrial or sell the land off to an industrial builder.

You know, there's just so many different ways to invest when you get creative. And I don't think there's any wrong way, especially in a growing market and our market is growing significantly. So, yeah, think our philosophies on that are pretty aligned. I'm not interested in getting a trucking market, our trucking business, but a lot of people are, that's just a personal preference.