Best of Acquisitions Anonymous - Episode 185: Pizza Boat For Sale

0:29Welcome back to Acquisitions Anonymous. co-host Michael. Today we had an emergency pod. A deal came in that was so good, we couldn't get away from it. And so Bill and I popped in and it is a pizza boat that is on the water in the United States Virgin Islands. And it is priced at less than one times earnings. So Bill and I had a ton of fun with this one. Bill is actually after the recording on the way to the Virgin Islands to buy this business himself. But other than that, I think this is a great one for you to listen to, Had a ton of fun. And here is the episode. Big thanks to High Level for sponsoring this video and helping us pay for our editors.

1:04High Level is the all-in-one CRM that handles your emails, texts, funnels, and more all in one place. Think of it like the Swiss Army knife for small businesses. And you can try it for free for 30 days at gohighlevel.com slash Michael Girdley. Mills is in the hardest business of all of us. Hello, listeners. Bill and I are just talking about how Mills is not here again today because just another misfortune has happened at his company. And he runs a roofing company. And man, everybody on Twitter, Bill, talks about, oh, you just buy an HVAC business at four times earnings, and then you're rich. That's every thread on Twitter.

1:42And I'm like, have you guys ever been involved in a business like that? Stuff happens all the time. Have you ever even known anyone that's involved in a business like that? Yeah, it's crazy. I mean, literally, every day there's something going on. My buddy, who's here in San Antonio, his team is 15 people for the division he runs. And they're basically, I don't want to give it away, but he's got 15 people who are administrative folks working for him, doing filing and processing stuff. Literally six months ago, one of the ladies, a strange husband, decided to show up and commit violence against the lady at the building and killed her, murdered her at the workplace.

2:31And it was just like, the level of stuff that goes on in business, people don't appreciate it on Twitter is what I think. Yeah, that doesn't happen every day, but that's the kind of stuff that Mills or anybody that owns a small business is running into. It's part of the cost of doing business. Yeah. I mean, it's small business stuff. It's messy. It's just horrible. All right, let's talk about the thing that caused me. Let's talk about another small business that seems way less horrible. Can we talk about this business that caused me to text you last night, EmergencyPod, after one of our listeners sent it to us?

3:11Yeah, you know it's a good deal when I start texting people at 11 o 'clock at night, EmergencyPod in all caps, and sharing the deal. And so this is the deal. Do you want to read it or do you want me to do it? Yeah, sure. I'll read it. So Michael found this one and texted to me at 11 p.m. last night, and here we are recording this. So it is the number one TripAdvisor rated restaurant in St. Thomas slash U.S. Virgin Islands. So the number one rated restaurant. But here's the trick. It's not a traditional restaurant. It is a boat. It is a floating restaurant. So the asking price for this boat-staurant is$425 ,000.

3:52It says FF &E is included. Furniture, fixtures, and equipment is included, which is good because I assume that's the boat. So you're going to pay$425 ,000. This thing has revenue between$500 ,000 and$1 ,000 ,000. They give a range between$500 ,000 and$1 ,000 ,000 and cash flow between$250 ,000 and$500 ,000. It says, and we did not sign an NDA. This is publicly available on us.businessesforsale.com is where you can find it. This is the world-famous, iconic, and beloved Pizza Pie, the pizza boat with liquor license and a t-shirt merchandise store. It is a turnkey operation. It is currently rated number one on TripAdvisor out of 91 restaurants in St.

4:35Thomas. There are literally hundreds of five-star reviews with super positive feedback, and this is a rare opportunity to own an iconic restaurant. They have 9 ,200 followers on Instagram, 11 ,000 followers, and Facebook. And this amazing and popular pizza restaurant sits safely and securely moored on its own private mooring in protected and beautiful Christmas Cove, less than a mile from St. Thomas. This cove is part of the great St. James Island and is a government-protected cove, meaning the beauty here will always be protected. Turtles and rays swim under the boat almost daily. Even the snorkeling here is second to none.

5:09Your daily view at work and your commute could not be more beautiful. When you see it, you will fall in love with it. A trained and competent staff are in place and will keep working with the new owner. The turquoise blue water is 15 feet deep throughout the cove, making a very popular place for over 200 U.S. Virgin Island chartered sailboats and powerboat companies to stop, drop anchor, and enjoy the natural beauty with a piece of the pizza pie pizza in their hands. Christmas Cove is always full of boats. Hours are short at just 11 a.m. to 5.30 p.m., and you can choose to extend the hours, but closed at dust is recommended as the charter boats return to the marinas by dark.

5:46That gives you your evenings free. With this purchase, you are not just getting the business only, as other restaurants are selling. You get full ownership of all three boats. And the whole operation, including, of course, the Pizza Pie iconic pizza boat, a 37-foot aluminum sailboat that has been fully converted into a high-producing commercial pizza restaurant with a full commercial kitchen. and we also include a 19-foot center console powerboat with 150-horsepower Yamaha engine, a 13-foot powerboat with a 25-horsepower Mercury engine that's used for pizza delivery within the cove. Parentheses, yes, you will deliver pizza from a boat.

6:23And a 2008 Ford Explorer SUV for supply runs in the island. There's even opportunity for Ocean View three-bedroom rental accommodation, please ask. Should I keep going, Michael? this is so okay this is just full of surprises i thought i was gonna get a pizza boat through this thing but i'm getting like a pizza armada like i got three booth a pizza fleet oh and then we got to pull up the pictures like here's like the pizza boat they have pictures of the pizza boat and then the two tenders so you get a little boat and then another boat and then the pictures of this water. Man, Bill, is the weather like this in Charlotte, North Carolina right now or is this even better?

7:06I don't think the weather's like this anywhere in the world. It's the Virgin Islands, man.

7:13So, okay, here's somebody. Then they have a picture of a lady making a pizza and they're wearing masks on this boat. And there's the ingredients, the dough, a slice of paradise, the whole thing. And they have a website too. It looks like this boat from the photos has been actually almost gutted and converted into a restaurant. This doesn't look like some jalopy type thing. This is a permanently moored boat that has been remodeled into a pizza restaurant. Yeah. I don't know if you've been down in the Caribbean, but this is a relatively common thing to do. There's a famous bar. Have you ever heard of it called the Soggy Dollar?

7:53Have you heard of that? Yes, I have heard of that. Where is it? I think it's in the British Virgin Islands, but don't quote me on that. I'm not an island person. I've learned as I'm getting older, I'm a total mountain person. There's a picture I just pulled up of all these people wearing bikinis, like sitting around and getting sunburned. That seems like no fun to me. I want to go skiing. Are you not the get tan type, Michael? I mean, I live in San Antonio and I'm Caucasian, so I am spending my entire life avoiding sun. like the last thing I want to go do is get baked even more uh out in some Caribbean island with my shirt off it's just not it's just not what I'm gonna be doing yeah well I on the other hand am definitely an island person and I'm totally this will be the last podcast I record I'm buying this business and moving to the Virgin Islands uh to run the pizza pie look at this pizza here man I just pulled up a picture of the pizza this is I does this have to win the award for the listing with the best photos we've ever seen.

8:54Oh, yeah. I mean, they know what they're selling. They did a great job. So the listener, and I need to pull up his name, who sent us this last night. This came from a listener. Our best deals always seem to come from the listeners. The ski resort we did last week came from a listener. But this was covered in Bloomberg. Bloomberg wrote about this. And I read the article about it. And the title is, This Couple Dropped Everything to Open a Pizza Boat in the Caribbean. Tara Buys used to be a teacher. Sasha Buys was a programmer at Standard & Poor's. Now they run the best-rated restaurant in St. Thomas on a boat.

9:29And let me read you this line when they talk about Tara, who is one of the partners in the business. Tara says, Pizza speaks to everybody, said Tara, who is 32 and beautiful in a way that might be intimidating were it not for her sunny, disarming smile. Food trucks. Like, who writes that? What a wet kiss of an article. I mean, immediately. I was like, what is, like, Bill, actually, you know, I don't know if you know, but people behind your back say that you're beautiful in a way that might be intimidating were not for your sunny, disarming smile. Yes, I've paid all of those people. So, but Sasha was an MIT graduate toiling away in a cubicle at Standard & Poor's where he worked as a computer programmer for five years.

10:16I thought I was living the dream, but I quickly got tired of it. And his lunch became a means of escape. And then basically ended up giving up everything to become full-time sailboat people living in the Virgin Islands. And starting in Puerto Rico and working the way down. So there's a whole article about that. It's pretty great. I mean, it seems like a great life. But the question is, why are Sasha and Tara selling it? Oh, man. I think that's a really good question. They also have a New York, they have a website. It's at pizza-pie.com that talks about this stuff. Pizza Pie, P-I, like the irrational number.

10:57Yeah, pizza, yeah. How can you tell your pizza place was invented by people, started by people from MIT? Yeah, it's because it's got a nerdy name to it. Yeah, does it say why they're trying to sell? It doesn't. It doesn't. It says this is the life so many dream of. And yet they are walking away. I would be interested. I mean, if I had to guess, it's something personal. Like they need to move back to the States or wherever they're from. But, you know, of course you would want to understand because this seems like a pretty great life. Not bad. I mean, I don't know if you were there for that episode.

11:32We looked at a business where the people were selling their charter boat. And it was like in Tampa or Fort Myers, somewhere on the west coast of Florida. and you know i've i've hung out with some of those people before that like leave buffalo new york and decide to move down to the islands and get away from it all and then they discover like getting away from it all is probably too far away they overcompensated and it's pretty lonely and gross and you spend your days like you know like sanding off barnacles from a boat you know and there's always something to be dorking around with and then you have to deal with the island people Have we talked about island people before?

12:10No, you better be careful. Well, a certain relative of mine used to, loves is a beach person as well. And he would talk about, he would love to go to places where the land stopped because that's where like, you know, the people who were kind of listless and needed to find their life, they would just keep going until they ran into the water. So that's why I play, he would be like, yeah, that's why San Francisco, Seattle, Santa Monica, Key West, Miami, Portland, Maine, you end up like these weirdos because they're the people that are just drifting through life to find something and then eventually they run out of land.

12:48That's why Key West is full of weirdos. That's his thesis on the whole thing. I think we had talked about this before, how in a lot of places with really great weather, you end up with people who are there more for the weather than for their career aspirations or whatever it may be. So often if you are a young or motivated person who moves to one of these kind of resort towns, you can struggle to find peers or someone to plug into because a lot of people are just there because of the Caribbean or there to ski, et cetera. Yeah. Well, some of our friends live in Marfa. Have you heard of Marfa before?

13:24No. Sounds nice. So, well, it's actually, okay, sort of interesting stuff. It's actually out in West Texas in Big Bend. And it got discovered starting 30, 40 years ago when there was this New York artist who wanted to get away as far as possible from New York. So he was pretty famous, pretty successful. And he picked up and he moved to this town called Marfa, which is basically a 2 ,000-person town. And it is like a five-hour drive, maybe six-hour drive west of San Antonio. To put that in perspective, if you drive six hours from here, you can basically get to Louisiana. That's how, from San Antonio.

14:03So it's out in the middle of nowhere, Big Bend. But he moved to this place because he wanted to get away from it all. And it's a tiny little town with a lot of West Texas towns with nothing going on, not growing, none of that kind of stuff. And he moved out there and he set up his art community. And then what happened was, it's a very New York thing. New York and LA people decided that would be cool, so they all started doing it. And now it's like they have all kinds of connections to LA and New York and these cultural centers where there's big art communes there. There are times when really famous actors are just hanging out.

14:39They just go to get away from it all and live in a yurt and have these big parties. It's become quite the scene. But it's still this tiny, tiny town out in the middle of nowhere. but it's out in West Texas, M-A-R-F-A. I totally encourage you to Google it if you haven't ever discovered it. It's fascinating. Weird. But anyway, so our friends moved out there. They moved there from San Antonio because they wanted to get away from it all. But it turns out when you're in a 2 ,000 person town or you're on an island like the U.S. Virgin Islands, finding a way to make a living is incredibly difficult. So like in Marfa, our friends ended up doing this thing called the Marfa Hustle, which is you have like four part-time jobs.

15:16Like one is you're like a bartender on the weekend, you write for the newspaper and maybe you work on being a tour guide. That's your hustle. Or you teach yoga. Those are your four hustles. And you maybe put together a living after doing all that. But I think that's what precisely these people ran into when they got to the Virgin Islands, which was like, well, I'm on a boat. You're on a boat. We got nothing to do. Let's sell some pizza. We'll get our hustle on. At the same time, though, this hustle is making between 250K and 500K a year. That's amazing. That's a pretty good hustle. They're hustling.

15:50Well, and you've got amazing pricing power. Because look, there's only 91 restaurants on St. Thomas, U.S. Virgin Islands. So it's pretty easy. Well, this is the only one in the cove, though. I mean, period. Yeah. Yeah. So you could charge whatever you want. Would you like a once-in-a-lifetime New York-style pizza on a boat in the most beautiful cove in the Caribbean? Or would you like nothing? Those are your two options. Pay what we want. Well, what's interesting is they say in the listing that Pizza Pie's mooring lease in Christmas Cove is just$1 ,083 per year. That's less than$100 a month. This mooring is highly valued.

16:28It is the only commercial mooring within the preserve, ensuring that Pizza Pie will be the only place for food here for years to come. They've been an icon since 2014. team. So, I mean, that is like, if that is true, I mean, and assuming you can, I'm assuming this is like a forest service, quote unquote, lease or something, you can just keep renewing. You know, there's not like some landlord that's going to 100x the price of this, you know, at some point, and they kind of phrase it as, you know, they've got a lock on this thing, which would be an absolute moat. I mean, in a very unique way. Like when we see restaurants, you know, Michael, you always hate them because you say eventually the landlord is just going to raise your rent.

17:09and capture all your economics, which is true. But in this case, I got to assume, I mean, if they're leasing this morning for$1 ,000 a year, that's got to be like the registration fee, not like a true lease, I wouldn't think. So, I mean, they could potentially have no landlord here floating restaurant. Kind of cool. Yeah. Well, and I think that's probably something you want to dig into. How long are you able to stay there? Did it just say how long they can stay? It didn't say. Didn't mention. It seems to imply for years to come. that they can kind of be there forever. Super interesting. Okay, we got to talk about the elephant in the room for this.

17:47Can we move to the pooping section now? All right, a little bit of poop is loud. All right, let's talk about the big problem, hurricanes. Like there is a moment in time and it's going to happen soon where some hurricane is going to come in here and you're going to have to worry about your pizza place. And there's going to chase off all your customers for a while. So I think that's a good, besides this risk of your lease, like what is an external factor that's going to hurt you? Like this is a boat in a cove in hurricane alley, you know, on the Southeast corner of the United States where hurricanes come in all the time.

18:21So that's something I think you've got to de-risk. That's a really good point. I mean, you don't necessarily have to worry about your corner store coffee shop getting completely blown away in a hurricane. I mean, that being said, I mean, you think you can ensure this risk? uh either self-insure or you get an insurance plan yeah i mean you're gonna you get boat insurance right like that's a thing i guess i mean i imagine it would be a obviously a real bummer if you're totally custom you know kitted out commercial pizza kitchen sailboat gets destroyed you know you're gonna lose at least a year rebuilding that thing even assuming it was totally covered um so yeah that's a risk for sure uh what are there any other risks here i mean it The way it sounds like is, and I love their operating hours.

19:09It's from 11 to 5 because they're not actually, it's not actually like people coming from downtown St. Thomas out to your boat. They're actually targeting charter operators. So it looks like people get brought out by these charter operators who bring their clients out there. They snorkel and then they go over and they get a pizza delivered from your pizza thing. You've got to love that. I guess, I mean, there would be a worry if the charter operators start serving pizza on their boats, but they probably don't want to do that. Like, who wants to have a big pizza oven on your boat? Well, you know, they also don't have is a liquor license, which these guys have.

19:45Oh, yeah. I like that. I mean, this feels quite defensible to me. I like it, too. If you want to do this, like, this is a commitment. You're living on a boat or near a boat, and you're dealing with a lot of stuff. But look, it's America. Like, this is Virgin Islands, the United States territory. So you get to use the U.S. dollar, like you're a U.S. citizen. That's all this kind of stuff. It's not like you're dealing with some weird banana republic that's going to take all your stuff or change it for somebody's cousin. So you got to love that as well. Yeah, yeah. This is America. I am in for this.

20:20I mean, the only risk I would see here besides the hurricane, which is valid, is if somehow whoever you lease this from gets lobbied to let somebody else drop anchor. Yeah. Now, at the same time, though, let's say they do get lobbied and someone else drops anchor. It's probably not, I would argue, it might even help you. Sometimes if you have a restaurant and someone opens a bar next door, you both do more business. Imagine there's two or three little restaurant boats in Christmas Cove, and just more people come to the Cove, perhaps. So I don't even know how much of a risk that is. So here's the soggy dollar.

21:01I just googled the soggy dollar which appears to be on the maybe there's a different name for the one I went to but there's literally a boat I think in the British Virgin Islands that is the same thing, it's named the soggy dollar hilariously by the way if you're interested there's the soggy dollar but then if you go down to Isla Mujeres which is in Cancun in Mexico they have a bar there called the soggy peso which I thought is pretty awesome I don't know if it's going to happened, but for a while, some of my friends were talking about buying it. I was like, why do you want to buy a random bar in the middle of nowhere in the Caribbean?

21:38But anyway, I guess it is what it is. Let's talk a little bit about valuation on this thing. So let's say it's between 250K and 500K cashflow. Let's just take the midpoint and say it's like 350, 375. 375, they're asking 425 for it. And not only are they asking 425 for it, you get like four boats and an SUV. Like included. It says it's all included. So you are... Okay, I know you're doing the Bill special here. I can't... I got to stop you and interrupt. It's a 2008 Ford Explorer. It's a liability, but keep going. You're doing great. Okay, so that's what I'm What I'm getting to is I wonder how much all of these are liabilities, right?

22:25Yeah. So you've got the 37-inch sailboat. That's the iconic pizza boat. You've got a 19 or 37-foot sailboat, not 37-inch sailboat. That might explain why it's so cheap. A 19-foot center console powerboat, which is, I think, how they resupply the sailboat. And then a 13-foot powerboat, which is used for pizza delivery. So you get three boats, the big boat, the resupply center console, and then the pizza delivery dinghy that delivers it to the other ships in the cove. And then you get their liability Ford Explorer SUV. Ford Explorer. Do you, I mean, this seems from a value, I mean, boat and stuff aside, this is 375K-ish of cash flow for$425 ,000.

23:12Right? Let me one-up you on all this. So we've talked about having this Acquisitions Anonymous fund that would invest in some deals and have operators for them. And my concern has always been, if we're going to try to make money with that, it's not going to be good radio. It's not going to be very good on the podcast. But this feels like one where, who cares if we make money? If we found an operator willing to do this, we put up half the equity, and then every month part of the thing is us checking in with Bill or Sam or whatever their name is, who's the operator down doing this. That would be some darn good radio, some man on the street type stuff.

23:50And we're checking in on the hurricane. Anyway, I don't know. Are we starting to see good enough deals that we're like, the Acquisitions Anonymous fund maybe should happen? Can you imagine the, I don't know if you watch that reality show Below Deck of the people on the super yachts go around the world. Can you imagine the drama that's probably got to happen in this cove in the Bergen Islands? get Gordon Ramsay involved all kinds of stuff oh yeah I think it'd be great we could fly down there once a quarter and host the podcast on the pizza pie boat we're on the pizza pie boat I'm totally down we should absolutely buy this and you know what I think we should make Mills go run it it seems like he needs it oh man get him off the roof I feel so bad for that guy Mills is just I don't want to air his dirty laundry but it's like Like misfortune after misfortune.

24:42Just so tough. I mean, I got to say, this sounds freaking great. And by the way, there are nine employees for this thing. So I don't know that you have to be on the boat every day, which is good. It doesn't look like it. I mean, ultimately, look, I think it's important to recognize this is a restaurant that's subscale, nowhere near supply chains, on a boat, in a cove, on an island, out in the middle of nowhere. so this is there's you you need somebody on site making sure this stuff stays good that's my my two cents but then again like nobody's expecting like gino's pizzeria here you know this isn't bleaker street you could be microwaving di giorno and no one would care no one even no but it looks like these guys are doing it right like they're making their own dough and can you explain by the way i pulled the pictures again this guy in the water do you see that this picture there's the boat then there's a guy in the water with his snorkel outfit but then he's putting his like leg up like he's like some sort of like water ballet like water aerobics thing like like i just don't get it anyway there's i think he's posed i don't know maybe he's on vacation but you actually in this photo can see the 19 foot and the 13 foot boats that you get as part of the purchase.

25:58They're all right there in the photo. Every time I zoom in like this, it makes me think I'm like Blade Runner. Remember Blade Runner is like enhance. Enhance. It's like enhance grid 2.5. Yeah. But I think this is reflective of one of the things you got to know when you do this, right? You're going to get island people, island time. That is part of this deal. and you're going to get some weirdos and you're going to have frustration with staff and it's going to be part of the deal and one of your employees is going to decide one day he can't come to work because he's going to be doing whatever this guy's doing.

26:35In the water. I mean, let's be real. You buy this business, you are tapping out of society. And maybe that's okay. In fact, a lot of that seems really attractive. You are retiring to the Virgin Islands where you will make pizza for four hours a day in an incredibly picturesque cove with people who are probably drinking and having the time of their lives. And then you'll go home at 5.30 and do it all again at noon the next day. I mean, there are worse things. But this is not the thing that's going to make you a zillionaire. You're going to meet all kinds of upwardly mobile people. This is not New York City.