Side Hustle Showdown: Buying a Business vs. Investing in Real Estate (Greatest Hits)

24:28Like there's a lot of people that can buy single family homes. There's a lot of people that can buy multifamily homes. So there's the flip side. But the positive side is most of my deals have high double digit to high or middling triple digit cash on cash returns. So I'm not doing a deal unless I'm making usually about 100 % from a cash on cash return perspective. A lot of my deals have 600 % cash on cash returns. And the reason why is because I can have a small amount down, let's say 10 % using the government loans that they give you, or I can use seller financing and also have something like usually they'll want to be a little bit more 20-30 % down depending on what the business is.

25:12And the way that you value these properties or these businesses is 2-3 times their profit. So if I have a business that makes$100 ,000, that business is worth 2-3 times the$100 ,000 on average. So I can break even entirely on my business purchase inside of two or three years if nothing goes wrong. If nothing goes wrong is a big asterisk for sure. But that means that in buying businesses, I don't have a 30-year period that may take me to actually pay off my entire business. I have a two to three-year period if I don't add additional operations and capex or expenditures on top of it. So that's the sexy part about buying businesses.

25:52And that is why real estate makes more millionaires than any other asset class out there, but private equity makes more billionaires than any other asset class out there because there's an asymmetric risk return or a much higher risk return ratio in buying businesses and doing private equity than there is in straight real estate. And then there's some molding of the two, which the other thing that you can do is the cool part about Chad's business, I'm sure he'll talk about this is like, there's great tax incentives. There's good tax incentives for businesses too, but there's incredible tax incentives for real estate.

26:27We'll see if those stick around with this administration, but there's really great tax incentives. So you can have all of this depreciation and you can have a ton of write-offs. And so a lot of times I will own a strip mall and then the laundromat and underlying businesses in it because owning the strip mall itself isn't profitable enough from a cashflow perspective. I don't make enough money. 8 % is not enough for me. So if I want the real estate so I can have long-term appreciation of the asset, then I can have the business on top of it that gives me that immediate cash flow, which is 100 % or maybe 200 % higher than real estate.

27:02If I may, I was going to add on to this. I think it's a really good conversation. I think real estate and businesses have always been complementary. If you think about every commercial piece of real estate has a business inside of it, right? And so like you were just mentioning, Cody, owning the strip mall businesses and the real estate under it, this is the McDonald's business model, right? This is like McDonald's makes burgers, they flip burgers, and they made a lot of money on that business. And there was this real estate business behind it as well. And I think about my own business evolution as a real estate investor.

27:34I started businesses inside of real estate first. And I had very low startup cost businesses where I flipped houses. So for$100, I can go to get a contract on a property, flip it to somebody else for$5 ,000 or$10 ,000. That was my first startup business. I evolved into a property management business where I manage my own properties. I chose not to manage them for everybody else. I made a deliberate choice to keep it a little bit simpler. But I had the systems. I had the processes. I had the people. I could have turned that into a bigger business. Or if I talked to Cody, I could have bought another property management business.

28:08The cool thing about real estate, I think, if you think about there's a whole spectrum in the investment world of the least risky assets, the most boring, like a U.S. treasury bond, right? You're going to get like 1 % or 2%. And there's virtually no risk that you're going to lose your money on that. Inflation is going to inflate it away, right? But that's kind of on one end of the spectrum. And then businesses, startups, local startup businesses have huge returns. And they're on the other end of the spectrum. And if you know what you're doing, you can eliminate a lot of the risks that people talk about.

28:38And that's why you get educated. That's why you learn about them. And then real estate is kind of in between. It's an in-betweener. It's not the treasury bond, but it's definitely more on that side of things. And the better real estate you get, if you buy a skyscraper in Manhattan, you're going to get like a 2 % or 3 % cap rate. That's very low. It's almost like a treasury bond in the investor's world. And so with real estate, what I like to do is like, I try to get both, you know, so if you wanted to leave your job, for example, then you would want to start a business and own real estate. If you're a doctor making a half a million dollars a year, you have no time, really, you're either gonna buy a piece of real estate to build wealth, because you really need some tax benefits, like you don't want a ton of cash flow right now, you want the long term return.

29:19And that's something I didn't mention earlier. We do look at cash flow today. But there's I often, my number one metric when I'm buying a property is an internal rate of return. or a discounted cash flow analysis. I'm going to look at all of the cash flow for the history of my investment and bring it back to today and say, what is that return today? And typical, like an unleveraged internal rate of return for me might be like a 15 % to 20 % total return. And if you have some leverage on there, then you can add, you can double that, you can get even higher. So the more leverage you use in real estate, that's one of the bigger benefits is that there's a lot of leverage.

29:55There's a variety of leverage. I've used seller financing, lease options, options, all sorts of creative ways to control these really big properties that have all those benefits we talked about. But then you can leverage them safely and at low interest rates or no interest rates or using options. There's a lot of kind of variety you can add to that kind of core base asset of real estate. Yeah, let's talk about the leverage option for a little bit and I guess the financing options in the broader sense for both of these asset classes. because in both cases, banks and sometimes the federal government will lend you money to invest in this asset class, which I guess is a positive sign that they see this as an activity worth incentivizing in a way.

30:37I mean, there's not SBA loans, but there's all sorts of first-time homebuyer stuff. Does the math get a little bit different on the investor side for financing options? There's a whole spectrum, but I would say just an example of a perfect startup for people on real estate investing is doing a house hack, for example, where you move into a fourplex or a duplex and you have to have a place to live, but you get an owner-occupant loan that's subsidized by the government or insured by the government. Therefore, you can get like a 3.5 % down payment or a 5 % down payment and a 3.5 % 30-year loan. I mean, that's cheap money, long-term fixed interest, and a 3.5 % or 5 % down payment.

31:14So you could buy a$200 ,000 or$300 ,000 our property with a really, really small amount of capital getting in. And so that's one end of the spectrum. The other end of the spectrum is commercial financing, hard money loans. So these are usually a little bit higher interest and or the terms aren't quite as attractive. You might have a five-year loan or a three-year loan or adjustable interest rates. There's a lot more risk in those. And if you sign a loan document, there's like a 50 or 100-page loan package written by a high-powered attorney who is going to screw you over somehow. That's the way I look at bank loans.

31:47So I try to play either in that kind of conventional world, which is for people who are just starting. For me, I do a lot of seller financing, private financing, try to find individuals who might be happy with a 4 % return or a 6 % return, and then borrow that money from them, and then have a property that produces a 10 % or a 12 % return. And then my arbitrage is between that cost of money and then the amount of return I can get on the property. Okay. And then long-term, you're building equity and you're taking advantage of tax write-offs and all this other stuff. We do have full episodes on house hacking and creative financing for real estate in the archives.

32:26I can link those up in the show notes. Actually, we did the creative financing when we did an episode called Free Houses with Austin Miller. I think he was in Missouri. And this was fascinating, all the different ways. He built this portfolio. I think he had 15, 16, 17 properties, nothing out of pocket of his own money at the onset for there. So tons of different ways to go about that. And Cody, it sounds like similar options here, where you could maybe get the seller to finance this thing over a period of years. There's this SBA option. And I don't know, what else have you seen work? Yeah. So I was just looking on here.

32:58So if we go to... So the place where you look to buy small businesses typically are sites like BizBuySell or LoopNet. So if I'm on here right now, I'm looking at the stats right now, about 66 % of small businesses are sold with seller financing. Now, you technically could get seller financing in real estate, but my understanding is it's hard to do these days. With all the demand out there for it, not as easy. Very normal in small business, very typical. The interesting part, I think, about it is the way that you get loans for small businesses is much less about your credit than it is about the business.

33:36So whereas you might Say you've had a couple bankruptcies even, and you don't make a lot of money, and you should not be able to buy a million-dollar house. And I'm not saying you should. You have to be competent. But you can buy a million-dollar business most often. And the reason why is because they are underwriting the business. They're not underwriting your personal credit. So it's actually a really good way for people who don't have huge salaries and incomes and who have had... maybe they've just taken some risks in businesses before and it hasn't panned out or whatever the case may be, you can actually go to the SBA, talk about them upfront.

34:12They'll tell you that they want to underwrite the business more than they want to underwrite you. Seller financing is the same. Now, the caveats to that are when you buy a business with financing, with debt, you do have to have a personal guarantee. So you don't get to go buy a million-dollar business and then walk away from it with nothing if you take out$900 ,000 in debt. So when people are always like, like, oh my gosh, there's a personal guarantee? It's like, yes, you're getting$900 ,000. Like, yes, there is a personal guarantee. That is how that works. But what's interesting is like, for instance, like I'm looking at a couple of companies in Arizona and there's one here that's like, one's a laundromat.

34:47The laundromat is for sale for$175 ,000. It includes the real estate and it cash flows$30 ,000. In order for you to buy a piece of real estate for$175 ,000, it does$30 ,000 in cash flow. So profit in your hand, not total revenue, is really, really hard right now. It's not hard to do in buying a small business. Now, the difference is you got to have somebody go pick up the quarters. You have to have some vendors underneath you that take care of the business and the cleaning. And that you probably don't have to do if you buy a property and immediately rent it out to somebody. The one area of real estate that I've actually had some fun with lately is buying properties for Airbnb.

35:25I'm slightly worried about government changes in how they allow Airbnbs in varying areas. But it's the only section of real estate that I have seen where the cash flow can match the cash flow that I can get in buying a small business. Because if you buy the upper end of the tier in the Airbnb space, you can actually charge quite a premium in lots of the markets we're in. We have them in Utah and California and Austin, etc. But that's how you buy it. And there's lots of different options. You could go and... I don't know. I'm looking at some other of these right now. And there's an agency in here that's basically...

35:58Well, there's a lot of practice for sale. And this also happens in businesses when people are sick, they need to retire. Because with a property, you as the owner of the property don't have to do as much theoretically. In owning a small business, most small business owners aren't great operators. They don't know how to place other operators in. They're not incredibly business savvy all the time. And so there's a law practice for sale in Arizona. So if you're an attorney, maybe this is interesting. The law practice is for sale for$3.2 million and the law practice nets$5 million. So you net$5 million in a year and it is for sale for$3.2 million.

36:37You're like, why would anybody sell that business? That sounds like it's a dumb decision. But often what happens is the main attorney has cancer or is getting divorced and has to divest their assets or died and his wife's selling the business. or there's a partnership dispute and they have to sell off this one particular type of asset. And so for those reasons, businesses come on sale under the market all the time. Now, I wouldn't want to go buy a law practice because I'm not an attorney. I don't know how to run that. I would need an operator to partner with me on it in order to do that business.

37:13But there are businesses like that for sale all the time. And then if you want to do starter ones too, like if you're a teenager or you have really little money, there are these pool cleaning routes that I wouldn't want to run because it's hard to make a lot of money off of them and scale. But there's a lot of those that are for sale for less than the profit they make inside of one year. So if you want to buy a job, like if you hate your boss, and you want to replace the$75 ,000 that you make today, you could go buy a pool cleaning route, you could take$75 ,000 from that pool cleaning route, and you could hire somebody to do part of the pool cleaning for like 30, 35 ,000$40 ,000 a year, you keep the other 35 ,000 $5 ,000 for yourself, you buy another pool route, all of a sudden you have$150 ,000 in total revenue, and maybe you hire another person or that same person can service the whole thing.

38:03And then all of a sudden you can get up to$75 ,000 to you as the owner without being the underlying operator. So that's what we call roll-ups. Okay. And that's always part of the due diligence process, I imagine. It's like, well, this business is doing$100 ,000 in profit per year, but then you find out that the owner slash operator of the business, you know, works 60 hours a week on site and doesn't have anybody like, well, that, you know, that changes the equation a little bit because now I need to hire somebody to basically replace him or her and do all that stuff. Totally. Yeah. I mean, due diligence is really important.

38:40Just like when you're buying real estate, you have a due diligence checklist, right? You're like, all right, I have somebody come out and actually inspect the property, right? I have a property inspector. If you were buying something like a laundromat, you would have one of the equipment providers come out and look at all the SKUs and do an analysis of what the equipment's worked. And they do that for you for free because they want to sell you more equipment. And so you have this same sort of idea of due diligence. You just have, in my opinion, a little bit more because you're dealing with people and humans.

39:07And humans were messy. And so you need to make sure the financials are clean. And usually they're not. And because the financials aren't clean, you need to get your hands in the business a little bit more. With real estate, it's like, do the tenants pay? Have they paid historically? Is the property actually viable? And then I don't know, Chad, whatever else you think there is, but those seem to be the three main ones for me. And then of course, market, location, competitive analysis. But for the business, it's competitive analysis, location, what are the underlying employees do? What about the financials of the business?

39:40What are these things actually... What are the pain points that we could have? What are the liabilities of this type of underlying business. So there's a checklist about like there's seven sections that we have for almost every business that we look at. And you can process it out once you... It's like, it's that Mark Twain quote that history doesn't always repeat, but it rhymes. Due diligence doesn't always repeat, but it rhymes. Okay. This is at contrariancashflow.com? Yeah. Contrarianthinking.co is our newsletter. That's free. You can get on it. We talk about all of that. And then if you want to talk only about buying boring businesses, Unconventionalacquisitions.com.

40:14There's a newsletter and a course and all of that, but the course has a cost. So take that for what it's worth. I'm trying and thinking it's free. More with Chad and Cody in just a moment, including what they might do differently if they had the chance to start over. A lot of side hustlers suffer from what-if-itis. What if it doesn't work? What if I don't have the skills? What if I pick the wrong path? But one thing 100 % of our amazing guests have in common is they took their shot. They faced down those what-ifs and they got their answers through taking action. Our partner Shopify helps turn what-ifs into why-nots.

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42:39Okay, fair enough. Where do you guys want to go from here? So we talked a little bit about the financing stuff, the tax stuff, the due diligence stuff, the potential time required to manage after the fact, maybe some surprises, mistakes, headaches that come up that people maybe can learn from you guys and hopefully avoid on their own. Although mistakes and failure is probably the best teacher. Chad, anything that you wish if you could turn back the clock, anything you'd do differently? Yeah, I actually do have a couple. I was going to add on to the prior conversation a little bit. Just one thing that I love owning businesses, by the way.

43:12I think this is not an either or conversation. But I do think a big part of when I wrote the book, Retire Early with Real Estate, was about being in a place in your life where you are really passive, like where you actually can do other things other than the thing that's producing your income. And for me, at least the businesses that I've owned, and this part of this is how you operate the business and which one it is versus the real estate I own, particularly certain kinds of real estate, single family houses, really easy to rent, multi-units are very, very lean businesses where the tenant almost runs the business themselves.

43:43You have a property manager, but if you have a tenant who stays in a house for five or 10 years, they cut their own lawn, heat and air might break, you know, and you have a property manager fix that. So I just want to add like that element of what do you want your life to look like? Like, I think I mentioned that spectrum earlier, like buying a business makes a lot of sense, having cash flow makes a lot of sense. But there's also that spectrum of like, how much involvement do you want? How much risk do you want to have that you have to get back involved? If somebody leaves, if you own a business, and that person gets out the law, I'm just thinking about the lawn care guy, for example, you know, it's very dependent on that lawn care person.

44:17And if that partner, partnerships, human beings, we all have complications, right? We have emotions. I like the just the super, super boringness of some of these residential properties I have. You know, it got a little exciting during COVID. Like I'm in a college town. You know, is the university going to shut down? Like, are people going to go back to school? Like that was interesting. But I also had houses where people have social security income and they pay me four or 500 bucks a month. Like that was not going away. Like there's section and eight rentals. So you can diversify within the real estate world.

44:45And there's some really, really stable, no hassle, not a lot of change over a long period of time. So that cash flow is consistent and it tends to go up. It's not quite as dramatic early on, but it's just kind of like that little engine. It just keeps getting bigger, keeps getting bigger, keeps getting bigger, doesn't go anywhere, doesn't involve as much of your time. And so I think I just want to add that element into... And that's some of the mistakes I've made have been related to that buying properties that were not like that, like that needed a lot of my time, needed a lot of my extra money.

45:14For example, I think some of the biggest mistakes I've made have been underestimating the location and overestimating the cash flow on a property. I would be enamored by the numbers and say, wow, that's going to like a huge cash on cash return. Those numbers are amazing. I'm getting in really low. The seller is going to finance 95 % of it. what an amazing deal. And then there's a drug dealer next door who I can't control, who's scaring off of my tenants. And I've got zero cash flow now because I can't rent this property. I guess there's some qualitative things that early on in my business, I got so enamored with the spreadsheet and the numbers that I forgot that the value of your business is the desirability of that place to live.

45:55And so your due diligence checklist, a lot of your core business fundamentals have to be like your customer, your tenant. Do they like to live there? Is it going to get better for them? And if it's got problems that you can't control, pass. Go to the next property. And maybe it's not quite as good on the numbers, but it'll probably be a better deal for you in the end. Yeah, better long term for your own sanity. Cody, what about you? Any mistakes or surprises from some of these boring businesses that you're involved with? Oh, yeah. I think the first couple things are one, two sides of the coin.

46:28Don't buy off a bigger first deal than you can chew and simultaneously be careful about buying a job, not a business. And so there's a little middle ground that you want. You want something where you have enough cushion where you can afford an operator and maybe some redundancies like other people inside of the business who could take over if your operator doesn't work out. Or have your operator be somebody who can't just bail on you, your husband, your dad. I think a lot of times people do their first business, they hold pretty close to the vest. What you don't want to have happen either in real estate or buying businesses is have your first deal be a terrible one.

47:03Because you won't do it again. And you'll think that the strategy doesn't work. And you'll be missing out on a huge opportunity, in my opinion. So you actually want to play your first deal a little bit conservative, because then you get confidence, you start to see those echoes and rhymes we talked about. And then you can scale up and do more and bigger deals. but don't have your first one be able to ruin you. That's what you don't want to do. Or have your first deal be buying a house in a neighborhood that's super sketchy. When you're like, no, but it's going to appreciate whatever. No, you're going to have all these issues beforehand.

47:33Go boring in your business and your real estate to start with. And listen, there's plenty of people that did the flip side. They're like, I love risk. I don't care. I'm going to go big. And that's great. I just don't think that's the norm. So I would be careful about that. The mistakes I've made are plentiful. Thankfully, in small and medium businesses, we've bought. We've never had a business go under. We've never had a business lose money. But here's what we have had. I've had two businesses that were just too small. They're annoying. They just bothered me all the time. The cash flow wasn't worth my time suck, even just in overseeing the operator.

48:08And so we divested out of those businesses. And actually, it's pretty easy to divest out of the businesses. Also, when you can get all your money back so quickly like you do in small businesses, you're like, I understand why people sell at a discount because like I had one business, it was making money. It was profitable every month, but the operator just would bother me all the time. Couldn't make decisions by himself. And I was too young and naive to set boundaries and just say, send me the check and that's it. And so you have to know some of that stuff early on. And that business, we ended up selling for less than we bought it for, but we ended up making money because we cash flowed for a few years on it.

48:43So there's that. And then honestly, I think the biggest mistake that I've made in this space is not executing. It's hard to buy businesses. It's not difficult. It's not brain surgery. But you have to do a lot of diligence. You got to find the business. You got to follow up with the owner of the business. And they're not that sophisticated. They don't have the right documents. You got to chase them down. So it can be annoying. Upfront can be super annoying. It is not like you go on MLS and And you can click and you're like, awesome, realtor connect, everything goes, bye. But anytime there's that friction, that's where the arbitrage is.

49:20That's where all the money's made. So I think my biggest mistake was actually, I should have done this earlier. I made a bunch of other dudes a ton of money, billions of dollars doing this in private equity. And I wish I would have started before. And I think if you talk to almost any real estate investor, they'll say the same thing. Take conservative bets, but start now. because even in like a market at all-time highs, if you play it conservative within what you are able to control and with what you are able to finance in the event that stuff goes wrong for a while, over the long-term with buying businesses and buying real estate, it's hard when you can diversify to regret those decisions.

49:56Very similar to building an audience. It's like you should build an audience today. You should think about investing in cashflow and businesses today and you should think about investing in real estate probably today. Just make sure that you do it all in the right way. One quote that I've been pondering for the last year or two is this came from Ramit Sethi's book. He said, if you've already won the game, why take additional risk? And the rephrase on that is like, what motivates you to keep going? It sounds like, you know, things are going very well for both of you. And it's like, do I really need another property?

50:26Do I really need another business? Like, why do I keep growing for the sake of growth? Or are you kind of like coasting at this point? I totally disagree with Ramit. And I like him a lot. I hear he's a great guy, but I disagree with him on a lot of stuff because I think it's not just about money. I know that that's his frame. His frame is money. That's what he thinks about all day and making money. But I think about financial freedom as a mechanism to bigger things. I want financial freedom because then I want personal freedom. I get to choose. If I want to hang out with you guys for three hours, I'll just cancel everything and I'll just do it because I can with my schedule now.

51:00If I don't want to talk to anybody for three months and I want to go live in Ecuador. All this go, do it. It doesn't matter. And then beyond personal freedom, I want philosophical freedom. The ability for me to say, think exactly what I want without concern of what other people are going to say and it being able to impact my financial freedom and ability to feed my family. And then beyond philosophical freedom, I want to enable more people's freedom. So I love talking to people about buying businesses because I think that we have a purpose and a reason to be here on earth. And I think mine might be creating more owners and getting more people to think that they are capable and they don't need somebody else.

51:37They're not victims. Nobody has to give you the right to do this. Just about anybody can do the things that I've done in my career because I'm not a rocket scientist. So I think for me, it's like, yeah, I have plenty of money. I could retire comfortably, but probably not crazily. And so for me, it's like, no, it's because I want more people to have freedom. And I think there's a purpose to money and it's not just flashy cars and big houses. So that's my take and I get a little fired up. No, I appreciate that. It's interesting and probably telling that both of you have gone down the path and this is not uncommon amongst guests on the show.

52:11It's like, I did the thing, I saw some success in doing the thing. Now I kind of want to teach other people the thing because this was really cool and this was impactful in my life. But Chad, your take on that one? I have some agreement and disagreement with Ramit on that one. And I think the agreement for me, I've really struggled with this, was I went through different periods of my business. Like 2007, we had a huge growth phase in our business, almost too much. It was one of my mistakes I had mentioned. We just overgrew at that point right before the Great Recession and had to kind of hang on for dear life.

52:39And so we've had our really push it hard phases. We've gotten to stable phases where, all right, we're making plenty of cash flow. And I've had that conversation with myself. It's like, all right, we're fine. I could pay for our bills. And I plan on this cash flow continuing for a long time. What do I do now? We moved to Ecuador. We went for 17 months. I just kind of tied things up built some systems and yet like there's a part of me that said all right well we're done and so I started trying to take some chips off the table let's pay off some debt like I'm not quite I'm not taking as many risks like I'm not going to do some deals that have aggressive debt I'm not going to do deals that have a lot of commercial notes that have balloons five or ten years from now like I'm not going to mess with that I don't even like dealing with banks really because it's a pain in the neck they make me show my net worth statement They make me wear a suit.

53:25I wear t-shirts. I don't wear that crap. And so that stuff I'm not doing anymore. But at the same time, there's a part of me when sitting around, I'm like, I have talents. I have gifts. I have something to give. And it could be that part of those gifts have nothing to do with making money. I started a nonprofit with some people locally where we're trying to build a network of walking and biking trails in our community because it just annoyed the crap out of me. And I'm like, who's fixing this? How come I can't cross the road and push my kid in a stroller? Why do we build everything for cars around here?

53:55And so I've been for five years, like, entrepreneurially trying to fix this problem through a nonprofit. But then I also, I think it's fun to grow businesses. So like an online business for me has been much more fun than going out and buying more real estate. And the way I've looked at it is I can leverage this. I had opportunities to syndicate and start, you know, $100 million syndications and go buy college towns all over the country. You know, why just Clemson? Why don't I do Blacksburg, Virginia? And why don't I do this? like that had no appeal to me at all. It wasn't fun, even though I'd make a lot of money.

54:27And I really enjoyed like sounds like Cody and sounds like you as well, Nick, that like sharing with other people. I like the idea of like 10 ,000 people owning five or 10 properties, having financial independence. And I like the idea of making money as well with that. Like, I don't want to that. That's not a charitable business. I'm using that money to give away, like I give away half of the profits in my business, but I use the money to have fun as well. And so, you know, there's a ambivalence for me kind of a back and forth about making money. And I go through phases where I'm like, let's go, let's, let's get it.

54:57Let's sell other phases where I'm like, eh, whatever, let's just go to Ecuador and hang out on the beach and chill out. And, you know, somewhere in between probably right now. Yeah, very good. Thanks for sharing that. Let's do some closing arguments, parting thoughts, if you will. Cody, your case for the business side of things. Here's my biggest case is pick yourself. So in whatever you're going to do, if it's going to be buying a business or real estate or building an audience or whatever the case may be, just keep picking yourself. I think that's one of the reasons I love this show, Nick, is because it's telling people that they have the ability or the right to do so.

55:32And my concern for people and why I think they should go get ownership, I like to get ownership by buying small, boring businesses because I think they have the best valuation today at the lowest price level with the most leverage allowable. Those are the three things I look for. But I would say that the biggest concern is if you are in a nine to five, and if you are working for somebody else without diversified income streams, it's just going to get worse. It's not going to get better. And I have employees and I get my employees to invest in our deals. And I get my employees to have diversified income streams too.

56:07Because I think one of the worst places you could be is in a nine to five with no additional income streams. And as we can see, your business can be shut down. It can move out of state. The business tide can change completely. And I think everybody has a moral imperative right now to figure out financial freedom first to get to the next steps. When it comes to buying a boring business, what I would just say is just start learning. Learning about real estate. Learn about buying a boring business because you're never going to regret figuring out how to structure deals. You're never going to regret negotiating.

56:38You're never going to regret figuring out what does it mean to get in an equity position as opposed to an employment position. And that's what you're really learning. When you learn about buying a business, even if you never execute on one, you will negotiate your salary different every time, you will negotiate contracts differently every time, and you will have the frame of mind of an owner, not an employee. And so whether you go and actually make the purchase matter so much less than that you go actually learn how to do this stuff. Because I think once you realize, like you said, Nick, that when I want cash flow, I go buy it.

57:10Once you realize that there's that reframe available, your life, it just won't ever be the same. Well said. I'm very fortunate to have had my first taste really of working for profits and not wages at a relatively early age. I like these calls to get yourself some ownership, invest in assets, find some income streams that you have a little bit more control over than maybe you do in your nine to five. Chad, your take. So Cody and I are in agreement on the main debate, which is you got to own something. You got to get a business. You got to get a piece of real estate. You got to get both. So I think that's the most important one, as she says.

57:44If real estate calls to you, I think again, the benefits are so easy to understand. The most important thing about real estate is the intuitive step that you already get. Find a good location. Find a place where population is growing. Find a place that I had a mentor one time who used to say, find a neighborhood that has romance. You want to have something that pulls at you emotionally. And real estate's got that. And so you start with that. And then you got to run the numbers as well. And you got to figure out a financing angle that makes sense. And so not every piece of real estate makes sense.

58:16You know, not all the numbers make sense, especially if you're looking for cash flow. There's a whole spectrum of different types of investments you can make. If you just want something long term growth, really boring and a quality location, cash flow is not going to be quite as good today. But the long term tax free growth is gonna be really probably be pretty good. If you're somebody who wants to get out of your job sooner than later, you can gravitate towards or cashflow centric properties, maybe even a business built on top of a piece of real estate. I think a mobile homes is that way. You can make a ton.

58:44You can get your money back in two or three years on a mobile home for sure. And we've done a lot of that. We own the dirt underneath it though, right? But if you needed us to get started with a few thousand bucks, that's the kind of thing you could go buy a mobile home on somebody else's land and then eventually get an option to buy the land or something. So there's so many creative ways with financing and options and creative financing that there's really no excuse not to get started. you just, the hard thing with a business or real estate is figuring out how is my situation going to fit into this path to financial independence.

59:13And I think just getting started with something is the key. Like, don't wait, you know, we don't be afraid to make mistakes, like get out there, make some offers, do something that if you take care of the most, the big risks, the financing's a big risk, the location's a big risk. If you take care of those two things with real estate, then go for it. You know, there's, you can probably recover from the other mistakes you'll Mike. All right. Protect your downside, but go in and get started because a year from now, you're going to wish you started today. I guess on the show said, you know, I was like, well, weren't you nervous about making that move?

59:44And he's like, Nick, at a certain point, you got to do something or tomorrow is going to look like today. And so if you're in that standpoint, you know, go get yourself educated and take some action on this stuff. Cody, Chad, you guys are awesome. Thank you so much for sharing your insights here. It's been an awesome conversation. You can find Chad at coachcarson.com. He's got the podcast over there, tons of resources for you. Cody's at contrarianthinking.co. Excellent thought-provoking newsletter that'll link you up to everything that she's got going on. Make sure to grab your copy of Cody's new book, Main Street Millionaire.

1:00:15That is it for me. Thank you so much for tuning in. Until next time, let's go out there and make something happen. And I'll catch you in the next edition of the Side Hustle Show. Hustle on.