416: Codie Sanchez: These “Boring Businesses” Will Make You Rich

26:01I have asked myself, we have 25 questions we ask you, but I've asked myself these 25 questions. Third is origination. How do I find a business? Where are they located? Fourth is due diligence. This would be this section. So how do I know if this is a good business that really does what it says it does, where the owner actually only works 20 hours a week and it makes this much amount of money that they say it does so I know what I'm getting myself into. Fourth is negotiating. How do I negotiate well with the seller in order to get what I want? Six is selling you. So how do I convince the seller that I am the person to take over their little baby that they've built their whole lives or that they spent their whole lives building?

26:43Seven is going to be financing. So how do I get the money to actually do this deal? Eight is closing. So how do I take this business with my attorney and my accountant and actually close the deal overall? Nine is the first 90 days. And then 10 is growth. And so if you think about buying a business that way, I don't think you can just listen to a podcast like this, go out and buy a business. I don't think that's a good idea for anybody listening today. I think, in fact, you have 30 to 60, 90 days of learning. Like if you spent 20 to 30 minutes in, let's say, something like our course or reading a book or whatever you want to do, you could learn in 30 to 60, 90 days what your deal box is, how to do underwriting, what a good deal looks like for you, etc.

27:31And by the end of 30 to 90 days, you could move forward on executing a small business transaction. Now, do I think that you would be a pro at it? No, but I think you would have enough understanding to where you're not going to bankrupt yourself if you follow the steps. It's not easy, but it's simple. Thank you for that honesty, because I don't want my listeners to be like, oh, I can go do this. No, you need to educate yourself first. And I like these 10 steps. I was furiously typing as you were saying them. So thank you very much. We have a parallel thought process here at BiggerPockets around real estate investing, right?

28:11Where if you're going to invest in real estate, you should spend dozens or hundreds of hours self-educating. Most of our members say that they've educated themselves for months or years prior to making their first transaction. And it seems like it's even more so the case when you're buying a business because there's this general framework of buying a business and then there's the industry-specific expertise that you'll need to acquire as rapidly as you can after you do identify a deal in order to be able to competently work in it. Cody, what is your buy box and process and what are you doing currently right now to invest in this asset class?

28:48So when I buy small businesses, we own 26 right now. When I buy small businesses today, it looks very different than even two years ago before my media company. These days, I buy businesses where I have an unfair advantage that can accelerate my media company or can be accelerated by my media company. And so that might look like I just bought a property management business, for instance, a portion of a property management business, because I think that will really help offset my real estate. And so as real estate transactions start to slow down, as Airbnb bookings start to slow down, as we come into a recession overall, as I stop buying real estate, as I have over the last two years, because I haven't liked the prices, property management continues to stabilize because everybody has to have their properties managed.

29:33And so I brought bought a property management company for that reason. And I talk about it a lot because we have a property management business that we help other people scale up their property management businesses. So it's like, all right, I make money on the property management business. I make money on the business that searches for best in class property management companies and adds them into ours. And it offsets my real estate portfolio. That's a good buy for me. The second part of my buy box would be, like last week, I bought a video production company. And so we do a lot of video, contrarian thinking on all my socials.

30:08And I was struggling because I'm new at media and I was finding it was really hard to have leaders in that space. I was overseeing a lot of editing and way more involved in a business than I ever typically would be because my face was all over it. And so I was really particular about how we were doing things. And it was taking up way too much of my time and I was super overwhelmed by it actually. And so I went out and started looking for who are the best in class people in video production. And what I found is the best in class people are largely located at our scale in like LA, New York, a lot of the big markets.

30:42So I either have to give them a giant salary and convince them to come down here, or I have to go to an ancillary industry. And so what I did instead is I knew brand deals are going down. Ads and sponsorships are going down right now as the market sort of starts to downturn. And so I thought, well, why don't I buy a video production company that typically works with brands? They have a high attention to detail. Their production value is really good. They're super organized. They have to hit deadlines. All the things we're struggling with, I'll buy one of them. They'll be worth less right now because the market's in trouble.

31:14And I'll plug them into my company and they're going to take over all my operations. And so that's what I did. So right now, my deal box is very strategic. There's a lot of people on the internet that go out and they're like buying 372 single family homes right now with their network, or they're buying every single laundromat or car wash they can find. At a certain point, I think you have to ask yourself the question of, is this deal part of my unfair advantage once you've done a lot of transactions? And can I scale it to a level that's meaningful for me, which is I want to make my businesses make me at least a million dollars a year.

31:51And if they can't do that, they're probably not in my deal box right now. Now, you know, 10 years ago, that was like 50 bucks is 50 bucks. Like if it makes me 50 bucks, great deal. But that's changed today. And now the numbers are just bigger. Okay, my husband and I have multiple investment accounts across several different companies. Throw in vehicles, investment properties, and private equity holdings, and it can be difficult to get a good idea of our actual net worth. And frankly, between the kids, work, and just life in general, I don't have time to be logging into 47 different places. So I just didn't.

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35:51There's no need to wait any longer. Speed up your hiring right now with Indeed And listeners of this show will get a$75 sponsored job credit to get your jobs more visibility at Indeed.com slash BiggerPockets. Just go to Indeed.com slash BiggerPockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash BiggerPockets. Terms and conditions apply. Hiring Indeed is all you need. I love that. Is there anything that you would not invest in? Oh, tons. There are five businesses I never like to invest in, but there are probably also 50. The five businesses I would never invest in are retail stores.

36:28So think boutiques. You just look at the trend lines of what's happening in retail stores right now, both from a foot traffic perspective and the cost of rent and the competition with e-commerce. I don't do retail stores. Second is restaurants. Restaurants have one of the highest failure rates of any businesses. Restaurants typically also are very complex to run. So you have to deal with inventory. You have to deal with really migrant workforces. You have to deal with consumer trends. You have to deal with seasonality. It's just too confusing, even for somebody like me. Third is hotels. That's just real estate masquerading as a business.

37:05Fourth is Amazon FBA. Anything where a single platform can control my ability to reach my end clients, I'm uninterested. I want to control the end experience with the client and be able to communicate with them directly. And the last one would probably be anything related to consulting. Consulting has a lot of key man risk, aka one person being the point of purchase, why somebody does business with you. And so I don't like to buy consulting businesses because I feel like that's buying a job. And when the other person leaves, I just replace them. Amen. I think that's awesome. I agree with everything you just said.

37:41And I think that's a fantastic way to approach it. With the exception of, you know, I do like the underlying real estate in a couple of cases. And I think that if you're going into retail and I've heard a couple of investors being like, oh, I'll get all the I'll basically buy this store for inventory and I get the real estate as a bonus on top of it. So there's sometimes stuff like that you can find in the space. But yeah, it's not as good as scaling something to a million dollars in profit on a continuous recurring basis, which is your thesis. Well, and you're right. I mean, I think if I so I own the real estate, my car washes are on, for instance.

38:15I own some of the real estate that our laundromats are on. But the thing about those two things is they don't have an expectation of service 24 hours a day. A hotel, they expect 24 hour service. there's massive, it's not, it's like this hospitality game that I think is one of the higher levels of entrepreneurship. And so in tandem with it masquerading as a business and really being real estate, it's a heavily service oriented and high expectation business. And so typically when people buy a business, I'm like, let's start you off. If you're going to start driving, let's not learn on a Ferrari.

38:49Let's learn on a Honda. And once you can handle the Honda, then you're allowed to upgrade to the Ferrari, the Lamborghini. Maybe you could fly a plane one day. But like day one of driving, you get the tricycle. And so I try to talk at that level for most on the internet. And then in some of our bigger groups, we have guys that have done eight, 10,$50 million transactions, and that's a totally different ballgame. It's also when it really gets fun, but that wasn't that relatable to me 10 years ago. And I don't think it's that relatable to most people listening on the internet. All right. So I have a complex question here.

39:21Um, you started opportunistically with a laundromat. I imagine at this point in time, this was not part of a grander strategy to get to where you are now. And you built it bit by bit to this. And at some point it shifted into a platform first strategy for your acquisition and your, your core business. Um, do you recommend that people start with that platform and strategy first, or they just dive in and figure it out and let it evolve later? And the second part of that question, which I think is closely related, is what's the exit plan here? Is it one giant conglomerate? Is it a private equity type holding company that's going to invest in large amounts of properties?

40:00Or is it something else? Let's start with the second question. The end goal to me in life, most people try to have this 5, 10, 20-year plan. And I've looked back on my life, none of it basically shook out that way. If you were going to tell me when I was getting my licensing at Goldman and State Street to go into investment banking and asset management, if you said, hey, Cody, guess what? In 10 years, you're going to be doing TikToks on the internet, I would have thought you were out of your mind. I would have thought there was no way. And yet we have done more transactions and made more money than just about anybody I ever worked with back in the day.

40:39And so thankfully, I didn't stick to my 10-year plan. My 10-year plan, written in my little journal that I write in every single quarter about where I want to go, said that I wanted to head an asset management business for a large firm internationally in multiple locations. Right about now, that sounds like fingers against a chalkboard. I couldn't think of something I want to do less than go back to suits and Wall Street. And so I don't have a 10 or 20 year plan. My only 10 or 20 year plan looks something like this. I want to be able to have freedom of optionality to do the things that interest me at that moment with a team that's super high performing that allows me to not have to work 80 hours a week if I don't want to, and yet gives me the option to work 80 hours a week on the things that I want to.

41:26The strategy is flexibility, which is really the word that we use when we talk about planning your personal finances. It's all about flexibility and having it as soon as possible and sustaining a flexible position, a financially free position for the duration of your life. You're just playing on a much larger scale than what we typically see with personal finances here on the BiggerPocketsMoney podcast. going back to the beginning uh when did strat but so that's great that the goal is flexibility but there is a strategy behind what you're doing there's a core strategy you talked about it earlier with bolt-on acquisitions when did it evolve from opportunistic cash flow investing in this asset class to more of the clear-cut strategy that you have today i started investing with an eye towards this one word of audience in 2020.

42:17When I realized after watching giants like The Rock, George Clooney, Kylie Jenner, Ryan Reynolds, make billions of dollars for things that had nothing to do with their core competency, aka acting, or being known on the internet as a personality. I watched them and I thought, what looks like more fun? Running a private equity company, which I know a lot of guys that run private equity companies that make hundreds of millions, if not billions of dollars a year, or having this giant audience that becomes like a perpetual investor base for you to tap into, and you get to launch things to them with basically zero risk to you as long as you understand your audience.

43:05And it was that moment that I realized, oh, I need to change my entire acquisition strategy. No longer can I just buy just car washes, laundromats, landscaping companies. I now need to buy companies that can be accelerated by my audience. And if you're listening to this, you're always looking for your unfair advantage. So your first deal that you do might be because your dad owns a paint company, you know, and because he's painted homes for 30 years, you have an opportunity to buy him out or take over his painting company. So you do that and you run the painting company for a while. And then you realize you could put in an operator and you want to look for your next deal.

43:39And the smart thing to do might be that you realize your painting company is not really a painting company, it's a marketing firm, you're actually really good at marketing and sales. And so instead of buying another painting company, you might buy a solar company, because you know that the client acquisition cost for solar is some of the highest out there. And so if you have painting clients that you can simultaneously cross-sell solar, you're sitting pretty. And so how I thought about it was just, where's my unfair advantage where my dollar can go much further than anybody else? It's very, it's a little bit more strategic than a lot of people online think about things.

44:15They want to teach, here's X, you pay Y, rinse and repeat every single human. And I think that's a huge disservice to you, the listener, because I think as the listener, you should be asking yourself, I'm a graphic designer who turns out is amazing at doing animations. So because of that, I want to buy a company that can be accelerated by the thing that I'm uniquely good at. And that change was in 2020 for me, and I don't think I've looked back. How are you funding these deals? Well, let's talk about how I funded them at first. I've done like 80 % of my deals up until the last couple of years seller financing.

44:51So pretty much all of my deals were, hey, you have a business, you want to exit, you're getting divorced, it's the five Ds. You have death, you have divorce, you have disease, you have something about decisions, but basically where you get into conflict for somebody else in your business, or you have distribution, aka you're moving, like you go to a different location or whatever. So one of these five reasons is usually the reason why these people sell. And because of that, you need to sell a business or you want to exit a business. I try to find people at their trigger points. At that trigger point, you have a lot of leverage.

45:23And so when somebody has divorce happen and they have to sell in their business, I want to be the one to pick it up for pennies on the dollar and be the one that cleanly distributes assets to both parties. And so most of my deals have been done with OPM, other people's money, seller financing. 60 % of all businesses in small business land get sold with seller financing. So it's very normalized, not entirely seller financing, but some portion seller financing. And then I would say I've probably done about another 10 % of my deals with banks, whether that was an SBA loan, whether that was just a loan from my local bank.

46:00And then the last 10 % have been deals where I've gone out and raised capital for them. So in a traditional way, I've raised either equity or debt from friends and family in order to buy a small business. I think most people should try to start with a heavy bias to seller financing and a lower percentage down payment. We just had a guy in our unconventional acquisitions group, which is where we talk about buying businesses. His name's Renat, and he just bought a business for$8 million, 100 % seller financing,$0 down. The business is located in his geographical area, and the seller of that business is going to stay on for a year to help him transition.

46:41It's an incredible transaction. And Renat was a pretty high-paid executive, making six figures in a sales capacity previous to that had nothing to do with this sector type of business, but got really good at negotiating, deal sourcing, and then trying to find a way for both people to win in structured a deal. Yeah. And I think the advantage of seller financing in a lot of these transactions is it keeps the seller with a lot of skin in the game so that they're there to teach you and be a consultant or give you the answers to questions that you're certainly not going to get every answer in a due diligence session.

47:16So I think that that's a really powerful tool in particular in this space. Agree. What percentage, let me ask you a hard question here. What percentage of the time would you estimate when a transaction like this takes place in a company of a couple dozen employees, maybe three or four leadership team members, where there's not a change to the leadership team in the first year following acquisition? Is it more common or less common for there to be substantial changes? Very common. I would say. Typically, though, you as the owner are the one that's going to want to make some of the changes. So if you think about it, the seller has probably been checked out for a bit if they're selling a business.

47:55It takes a while to get to that point of really deciding now I'm going to execute on a sale. And during that point, oftentimes the team takes their foot slightly off the gas. And so what I would say is I've seen less people leave because of management change. That's a big fear that people have that seems to be, I mean, I would say that's be interesting to go back and actually see if I could figure out what our real percentage is. But less than 10%, less than 10 % of the time, do I lose a senior leader that I wanted to keep because I bought the business. Pretty rare for me. The more common thing is that those leaders inside of the company just aren't good enough.

48:34And so you want to find your operator who can also recruit leaders. That's a really key component of finding an operator is they can't just be an executor. They have to also be a leader. And leaders mean that at prior firms, they had other people that followed along with them that would want to come to the company alongside them. So a really good way to check and see if your operator is going to be good, going to be able to lead, going to be able to retain and recruit talent is to ask them, hey, man, love to have you come run this million dollar business that I just bought. Um, you seem to have parallel skill sets.

49:10If I was to bring you over, uh, who else would you want to bring and how big of a team would you want to have at this company? And if they were like, oh, I might need this type of person and this type of person, you go awesome. Like, who is that? Who do you know? And immediately you're going to be able to tell how connected they are. And are they actually a leader? Were they just a manager of people? Awesome. So I have a question on this front. As a first-time CEO, I found the challenge of identifying poor performers and then removing them quickly and professionally to be very overwhelming for the first little bit.

49:44I imagine the culture in investment banking is a little different, and there's no issue with that. And so it's just commonplace whenever there's poor performers, we move out because there's 100 people in line past that, and we're all used to going at a million miles an hour. But I do want to call out that what you're saying here, and people need to hear this, is when you buy a business, you will fire multiple of the leaders, almost certainly, especially if you're doing it more than once. You will need to do it quickly. You'll need to do it professionally. And you'll need to have a very clear understanding of what good looks like in each one of those management positions.

50:15And so this is not a role – if you've never had to terminate someone for not – or if you never had to terminate someone for poor performance as opposed to they just obviously behave badly or you had like a clear thing, this is going to be a new and very, very difficult experience for you at first. Would you agree with that, Cody? And do you have any remarks on that? It's never fun firing somebody ever. I don't think it ever gets better. I've actually never met a leader that goes, just fired somebody today. It was awesome. Like, I just don't think that those people really exist. Even in finance, it just doesn't feel nice.

50:51You don't like to do it to humans, even if you think that they quote unquote deserve it. And that being said, I'm not sure you deserve the right to be an owner if you can't have difficult conversations. And so I think a little bit of this is having a conversation with yourself and saying, am I the type of human who wants to lead people, who wants to be an owner, who wants to leave a mark on this world? And if so, there are a few things that I have to add to my tool belt through life. And one of them is that I have to release people when they are not a fit for my company and when I am not a fit for them.

51:25And the second that you realize that, one, it's always worse than you think. It's always better than you think it's going to be. Very seldom have I ever fired somebody where they've, one, been surprised, or two, it's gone badly. And that's because it's really important, to your point, about managing them out. And this stuff is kind of tactical, and people who don't lead teams or run businesses don't love talking about this, actually, at all. But it's really important that you have check-ins early and you get comfortable with friction. So I'm always telling my managers, like, stop giving compliments to people on your team that are underperforming just because it makes you feel better.

52:00Like, you have to have the tough conversation. How terrible would it be if you were learning to ride a bike and every time you fell over, your parents were just like, yeah, just keep doing that. That, yeah, didn't work, but like, you should keep doing exactly that way where you keep leaning all the way over to the left. They're never going to learn to ride the bike. And so as a good leader, you have to be able to say, hey, man, like your sales numbers are down. You're not making enough phone calls. Do you want me to listen in to what's going on there and to actually give people feedback? And then people won't be surprised when something happens because you will have been coaching them in and up or out for a period of time already.

52:34So, again, I think I think this is this is going to happen. Right. That's the reason why you're getting a good deal on the business is because in many cases it's poorly run. And you have to recycle the management team in many of these cases, or at least some of the management team in some of these deals. I think that's something for folks to be aware of and think through. The second question I have is first-time CEO, which is going to be almost everyone buying a business, right? Buying one of these types of businesses. They're going to be first-time CEO. How do you know what good looks like from these people?

53:05That was, again, the biggest challenge for me coming in. I had never hired a CFO, right? I never hired one of these roles. How do you shortcut that and have better odds, at least in your first business? Yeah, these are really the secrets. I do three things. I have a 30, 60, 90-day plan for every new hire that I bring on board. It looks the same across every single business. It's part of our onboarding documentation. You can Google onboarding plans for Google, Amazon, et cetera. You can Google 30, 60, 90-day plans. You can steal other people's homework, which is what I would recommend you do, and then just implant the stuff about your company.

53:42And inside of that 30, 60, 90 day plan, I have them and or I write out what does success look like inside of that 30, 60, 90 day window. So inside the first 30 days, you will have done X, Y, Z, 15 or 30 things. Inside of the first 60 days, you'll have done these things. Inside of the first 90 days, you'll have done these things. The beautiful part about that is at each period. So after 30 days, I say, okay, have you done? Have you met everybody on the team? Okay, copy. Yes. Have you created a new roles and responsibilities for your underlying team members? Okay, you have it. Why? And so I'm basically going through a checking off every one of those things.

54:20And then it's very easy to see whether they are having success or not. The other thing that will keep you sane as a business owner always is a scorecard. And so every single business should have a scorecard or some sort of very simple Excel spreadsheet where it's like, here is our goal. Here is how each person contributes to the goal in some way. If this person does not have numbers that they're directly aligned with, you're probably doing it wrong. And I say all this with the idea that, I mean, this sort of stuff is stuff that I do 60 % of the time every time. There is always, even after 15 years of me being in business, where I'm like, oh, I'm going to, you know, I don't have the KPIs and the scorecard exactly right here.

54:58So I'm just going to let this person run with it. And then of course, something goes sideways. And so give yourself also a little love and grace as a business owner that everybody talks about how perfect they are on the internet and realize that the truth of the matter is, is that that's very rare. If you do 60 or 70 % of this stuff, you're going to be top performing owner. I can't tell you the amount of owners that never do 30, 60, 90 day plans, that never have underlying scorecards. It doesn't mean your business is going to be a failure. just means you might have to work harder than you need to.

55:30And I don't really like to work harder than I need to. I'll chime in there and say that I think there's an operating system that if you're a business owner, you should go borrow one. I would recommend EOS. Four Disciplines of Execution is good. A book on EOS is Traction. I would hire the coach to implement it or I'd go with 40. But just borrow an operating system. Invent your own after you've used one of these ones that are widely talked about for a few years? Because why reinvent the wheel and reinvent every part of running a business? Just put in place a playbook that's already in place. Do you have anything like that?

56:08Or do you find that operators who do that are more successful? I think having a system is crucial. A lot of my businesses do run on either EOS or Rockefeller. And certainly I've read Traction. I like a lot of it. The only thing that I don't love about it is I don't love the level 10 meetings, how they run those at EOS. I think that it can be a little too constrained in some of my companies. I also think it doesn't lead to a great culture fit. It leads to a culture that focuses on very specific tactics and execution every single week, as opposed to I've always abided by the quote of, if you want to teach a man to build a boat, you don't teach him to find and lay the planks and to screw them in.

56:51you teach them to yearn for the open sea. And so I think the real hack in running a business is can you inspire people with a cult-like set of mission and values to want to do the things that you would never have to explain to them and micromanage over them. And my least favorite businesses are the ones where I am checking off 472 to-do list items because I have to red, yellow, and green every member of the team. And my favorite businesses are the ones where I focus on creating a culture that puts first personal responsibility and personal excellence as a key to personal success and thus business success.

57:29And so if you can, wherever you can, focus on the soft things, actually. Most people will tell you to focus on the tactics. I'm a big believer in focusing on the story. Cody, do you have any final advice for someone who's listening who wants to get into the business of boring businesses. Twofold. One, I think you guys did a really good job of not making it sound too simplistic and easy. You know, you too can buy a business with zero dollars, spend zero time on it, become a millionaire, have a Lambo and a yacht. Like, that's not what we're talking about here. And on the flip side of that, also assume that you as a human are much more capable than you're giving yourself credit for.

58:06And assume that you've met a lot of business owners. How smart did you think all of them were? Have you been impressed by every business owner that you've engaged with? The answer is no. I've met a bunch of the big time business owners. And I can tell you what, 10 % of the time I have blown away and 90 % of the time I think I'm coming for you. And so for those listening, if it does sound like you are the type of human that wants to own a business, that wants to make the impact that I think is the most powerful impact any human can have, which is to build something, to employ others, and to create so other people can consume, I think there's no higher calling.

58:48And I think that buying businesses allows you to do it when you don't have that startup seed inside of you that you would die if you didn't build it, but instead just want to get in the game. And I think getting in the game is half the battle. And then you can figure out what game you want to play once you get there. Cody, this was so eye-opening and so helpful. I really love that you didn't come in with, you know, oh, anybody can do this. All you have to do is this one thing and then you can be a millionaire too. It does take work, but it doesn't have to be this 150 hour a week grind. I love how you presented the unfair advantage idea or suggestion or like, that's great.

59:31Everybody has an unfair advantage. What is it that you do that you can take advantage of that you can do better than anybody else? And I had a great time with you, Cody. Thank you so much. Where can people find more about you? Well, if you want to learn more about buying boring businesses, which I think is maybe even more interesting than me, I would go to contrarianthinking.co. That's our free newsletter. It comes out weekly. There's a ton of great ideas in there for how to make money unconventionally. We also have a secondary newsletter at unconventionalacquisitions.com called the Boring Business Brief.

1:00:05And that one is all about acquisitions each week for you super nerds. So I would check out either one of those. And then I'm Cody Sanchez on all the interwebs. I think YouTube is a fun way to get a high level level view of buying a bunch of businesses. We're spending a ton of time on YouTube. So maybe I would start there. Get, you know, plant inside of yourself that seed of belief. Get a couple ideas rolling around in your head by watching videos that only take 10 minutes of your time and then dive deep into the newsletters and learnings. That's probably where I'd start. Thank you, Cody. Thank you.

1:00:39Cody is a wealth of wealth of information. You got to go check her out on those resources. And then Instagram, you post awesome stuff every day almost. So really appreciate it and learn a lot from you. Well, thank you both. Great questions. I enjoyed the time here. Thank you, Cody. We'll talk to you soon. Bye, guys. All right. That was Cody Sanchez. And that was amazing. Scott, I'm so excited that we got to talk to Cody today. Listening to her was just, I want to go buy businesses. I want to start learning more about this. And I want to write down my unfair advantages so that I can start figuring out what I can do better than other people.

1:01:20Yeah, I'm so inspired by her. I, again, like I said, I follow her content and think that she does a fantastic job of framing the opportunity and is very real about the puts and takes with this. I do think, again, that she is so driven and so direct and so blunt and so forceful and passionate about what she talks about that, you know, don't be fooled. If you're not – if you don't have that personality and you're not willing to go there and be direct. And again, I think – she didn't say this out loud, but I think that 90 % of the time when a company is sold in this setting, there's going to be changes and like terminations or people resigning from the leadership team and perhaps other parts of the businesses.

1:02:01in this asset class. And if you don't have the stomach for that, this is not going to be for you. So again, a small percentage of folks will thrive in this environment, but those who do will, I think, find the best returns of any asset class in the United States of America, maybe the world over the next 10 to 20 years here because of the low purchase prices and the incredible opportunity to streamline efficiencies in many of these businesses. What you're saying, and I can see based on what Cody was saying, I can see how these are. I mean, I'm listening to my furnace guy, Bob from Circulating Air.

1:02:36If you're ever in need of a furnace in Longmont, you go to Bob. Everybody knows that you go to Bob. Everybody that I talk to, who is your furnace guy? Oh, it's Bob from Circulating Air. Everybody talks about Bob from Circulating Air. But you start talking to Bob and he doesn't have a succession plan. I think now one of his children is working with him, but for a while he wasn't. And what are you going to do with your business when he's not getting up there in age? But I mean, everybody ages every single day. So what are you going to do when you don't want to work here anymore? That's one example of a business that could be cooling off until someone brings a plan to heat it up.

1:03:22All right, Scott, I think that is going to wrap up this episode of the BiggerPockets Money podcast because we're just not ever going to do better than that. He is Scott Trench and I am Mindy Jensen saying, take care, teddy bear. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at youtube.com slash BiggerPocketsMoney. BiggerPocketsMoney was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.