Summary

In this conversation, Jon Stoddard interviews Jason Rogers, an entrepreneur who has successfully navigated the world of mergers and acquisitions (M&A). Jason shares his journey from running a niche online business to acquiring multiple companies, including mobile home parks and a plumbing business. He discusses the challenges he faced, particularly in securing financing and building relationships with sellers. The conversation highlights the importance of face-to-face interactions in business negotiations and the strategic decisions that led to Jason's success in the M&A space. In this conversation, Jon Stoddard shares his experiences in navigating complex negotiations, building relationships for capital, and the importance of diligence in decision-making. He discusses the challenges of transitioning ownership, hiring, and the significance of referral networks. Jon reflects on his family influence, strategic acquisitions, and the lessons learned from mistakes. He outlines his future goals for expansion and the value of trust in partnerships, while also touching on his approach to consulting and mentorship.

Takeaways

Jason transitioned from a niche online business to M&A.
His first acquisition was a mobile home park in 2019.
Face-to-face meetings with sellers can significantly impact negotiations.
Seller financing was a key strategy in his first deal.
He faced challenges in securing traditional bank financing.
Building a strong team and network was crucial for success.
The plumbing business was chosen for its inelastic demand.
Jason emphasizes the importance of cash flow in business acquisitions.
He learned valuable skills from his previous experiences that transferred to M&A.
The plumbing business acquisition was motivated by the demand elasticity in the market. Negotiation requires understanding both price and terms.
Building relationships is crucial for securing capital.
Diligence can reveal critical information about deals.
Transitioning ownership can be a positive experience.
Hiring the right people is essential for success.
Referral networks can lead to better hiring decisions.
Family background can influence entrepreneurial spirit.
Strategic acquisitions can drive business growth.
Negotiating seller financing can be advantageous.
Trust and character are vital in partnerships.

 

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Transcript:

Jon Stoddard (00:01.25)
This episode was brought to you by the LinkedIn Deal Flow System, the ultimate LinkedIn training for unstoppable acquisition growth. Get it at dealflowsystem.net. Welcome the top &A entrepreneurs. Today, my guest is Jason Rogers. Jason runs a company called Brighter Utilities. He's purchased four companies, and he's laid it all out on his website. We're just going to talk about that. Welcome, Jason.

Hey, I appreciate you. You have me on here. It's a pleasure. Yeah, good. I, you know, I see you, you've got that Facebook group. think there's five, 6,000 people in that group and you actually teach people also. So that's cool. Yeah. A little less teaching, now kind of phasing out of that a little bit. I just, I got a lot of things I'm really excited about, as far as buying businesses, growing, bread utilities. And so that's really more and more of the focus, but yeah, it's, I love the MNA community as well. And that's one of the reasons I'm excited to be here. It's, it's fun to.

to talk with other folks that are in this mindset. Cause you know, there's not a lot of people you can talk about &A with. There's not a lot of people. No, it's not a huge human industry. No, it's not. So it's always fun to talk. So let's go back all the way back to your first acquisition. It looks like Sunset Acres and brighter living properties back in 2019. what, where were you at at that time? You know, where you said, Hey, you know what?

I'm not going to just go look for job. I'm to go acquire something. How did that come about? It's funny. So actually 2018 is really where the story starts. I was living down. I had a little niche internet business, online business. I was living internationally between Scandinavia and in Latin America, specifically in media in Columbia, which was a hell of a good time. I do not regret it for the least, but I remember having this kind of moment, this moment where I was, and I was 27. This would have been

2018, I remember just waking up one day and realizing, you know, am I going to do this little niche online business? And is this, is this it for me and just go around and have fun and party and, and, and be a single guy. Is that, is that what I want to do in my, you know, back into my twenties, into my thirties, is that, is that the point? And of course my answer was no, it's not. And so I remember I was, was just, I was thinking I need it. I'm an entrepreneur, my blood by blood and it's just.

Jon Stoddard (02:18.56)
it's, I never wanted to work for someone. I said, what, what the heck am I going to do? That's going to be more impactful than a small online business. And it was around that time I studied, and kind of stumbled into, perhaps many of you know, Dan Pena kind of the Godfather of the MNA community and, found his old 1993 clips, which I just thought were gold at that time. I was two years old, but the way he spoke, you could tell he was just out of the game. And in long story short ended up, ended up making an investment in myself and as well as, is, is to his school of thought.

flew out there, met the guy, did his, he does a seminar and yeah, you know, the point here isn't to promote that, but I did go to that. was six or eight days. was up in his huge castle up there in Scotland and sat down with him. remember there was a 30 minute little meeting back then that you would sit down with him and, and I had a number of industries written on a piece of paper and I was kind of going through them. And I said, you know, one of them is the manufactured housing, AKA the mobile home park sector. And he said, do it, do it. And I said, what, what about the dodgy tenants? He said, do it, do it, do it, do it, do it.

So, okay, screw it, let's do it. You know, the old Richard Branson line. So flew back to Medellin. That's actually where I was quote unquote living at the time and started recruiting. was following his model pretty much to a T back then, or mostly to a T and started recruiting a team from Medellin using the $10 day travel pass with Verizon and da da da da built this team. And we went out and I remember I got a really good piece of advice. He said, you know, you're not well capitalized. I was broke.

for all intents and purposes. He said, you're not well capitalized. There's a lot of really well capitalized players in the market. You need to go to a secondary or a tertiary market. That's the only place you're going to find a cap rate, which is like a variant of an earnings multiple in the real estate world. That's the only place you're going to find a cap rate. You're going to be able to finance mostly using debt without giving away a lot of equity. And so that led me up and down I-29, Interstate 29, which runs north south from, think like Wichita all the way up to Winnipeg, Canada, just the middle of nowhere.

And from Kansas to South Dakota to North Dakota, Nebraska to Iowa, I was looking at all these mobile home park deals and was literally at some point sleeping out of my rental car because I was so tight on cash. was using the credit card trying to, I had a little bit of reoccurring revenue coming in from my online business, but just pennies on the dollar compared to was that business. What was it? The online business. It was basically a dating business. I, I won't bore you, but I was a really awkward guy in high school.

Jon Stoddard (04:37.74)
got rejected to my high school prom in front of all my peers, all this. So I went to college at UCLA and ended up just meeting every single woman on that campus and kind of transform myself from a really introverted individual to a guy who did well for himself. And there was all these engineering students and pre-med students at UCLA. And they're like, dude, what happened to you? used to be this, you know, this real square and now you're out, you're doing this stuff with, these different women. So it kind of morphed and kind of took legs from there. So I learned a little bit of online stuff, but it's just, what are you going to be a gigolo for your whole life? And so.

Anyway, bought the mobile home park in August of 2019 negotiated a it was about 88 % seller finance was a little over a million bucks. Was it over the phone or face to face to face? I met the guy I met the guy met the guy and I have a belief that for every hour you spend with the seller face to face, you're knocking off five figures off the purchase price or I'm a huge believer in that the good old fashioned rapport and

work to deal with them. And initially I was going to go out and get bank finance and he, you know, I don't want to share too much, but you know, his tax returns were not exactly, whole, you will. To find this guy, how many offers did you put out or how many people did you call for? I mean, we reached out, I reached out in particular to thousands. mean, thousands of outbound calls. Yeah. yeah. How did you know that this guy?

took the hook, debate on the hook. I mean, did he say, and visit me or what I want out or what? What I did is I launched just a massive outbound, campaign all throughout that, that part of the country, kind of that bread, bread belt part of the country and ended up, you know, stacking, I think it was about eight or 10 different, potential sellers that were all in South Dakota, North Dakota, Nebraska, Iowa. And so I got in the rental car, Kansas.

And I just went, it was like a nine or 10 day tour and, just went one by one by one by one and shook the hands of every single one of the owners. did the whole, the whole song and dance, saw the property, looked at the financials, looked at the PNL, all of that. And after that meeting, I looked at the, property in Nebraska and said, that's a diamond in the rough. That, that property is really interesting. And I hit it off really well, with that, with that owner. And, and that's kind of where.

Jon Stoddard (06:59.81)
where it got started. When you say outbound, was that outbound direct mail or phone call or both or what? All phone calls. I didn't have money for mailer. So the one thing I could afford was just to pick up the phone and... And how did that script go? What did you say? just like... Yeah, I mean, well, it depends on if you got the secretary versus the property owner himself. But if it sounded like someone who had some authority, hey, are you the property? Are you the owner of XPYZ Mobile Home Park? Yeah, I am.

trying to think now because it's been a few years, but it was basically just the punchline of, look, let's be, let's be, let's be simple. You own this property. Have you thought about selling it? I in the team I've assembled would be interested in making a competitive offer. Is that something you'd be open to entertaining? I just went right with the direct. didn't mess around. Just straight direct. Yeah. I'm Jason. I'm looking to buy a mobile home park. saw you have XYZ property. You know, have you, have you entertained, have you entertained selling?

I thought that first 15, what's your elevator pitch, right? You're going up an elevator. You're from the fourth to the eighth floor. Like, what do have to say? So it was pretty simple. Here's who I am. Here's what I'm doing. And here's why here's what I can do for you. And of course, what were the characteristics of this guy? Was he trying to get out? Was he retiring? Kind of wanted to get off the merry-go-round or what was that? He wasn't your traditional seller. Most of the sellers are dealing with were, you know, 65 plus.

they had all the traditional attributes of a seller, right? They're selling because it's that time, right? They want to spend time with the grandkids and do that. This gentleman was different. think at the time he was 48 and he had set a goal as a young guy to be able to retire by 50. And so when I came around, I kind of represented, I think he had held the property for 13 years at that time. He was running out of certain depreciation items I think that he could work with. And he just kind of felt like it was his time to...

cash out the chips. had actually, it was a pocket listing that had a listing with a broker for I think three to six months, the broker had to get it under contract, but it wasn't listed on any, was basically, and I reached out and we got ahold of the seller, not the broker, the broker or the seller said, yeah, I'm actually quietly for sale, talk to my broker. And so we set up the meeting, set up the meeting and, and then I, you know, I met the guy. And you drove out there face to face.

Jon Stoddard (09:18.998)
Yeah. Well, I flew, I, I, where the hell was I flying? I would fly into Wichita a lot. I think I was flying into Wichita and I just go all I 29 goes literally from like Kansas city up to Canada. So I just did that whole, I mean, I probably put two, three, 4,000 miles on that rental car. know. Yeah. How did you get to the point where, know, this guy thinks he's 48, he still wants money, but you're an investor coming in. You don't have the money, but how do you get to the point of, well, look, I'll buy it with seller financing. Why did he?

Right. Yeah. So the initial offer I made was offered him seven figures at closing in cash. Now it wasn't a cash offer. Like I had, you know, seven figures in liquid cash, but it was in the form of bank finance. So I think it was going to offer them just over. Yeah. It was just over a million bucks in cash. And that, mean, look, I, we landed under contract with, with there being a little bit over a million that was to move across the table at closing. And then the backend of

think it was a little over a quarter million that was going to get paid out over time and seller finance. That was the initial deal. And I went to every single bank in person, the good old fashioned way in Eastern Nebraska and pitched all of them. And, know, I thought did a pretty damn good job. Now, admittedly, I wasn't bringing a ton to the table personally, but I had banks that were flirting with, because it was a, it was was a solid property, high economic occupancy, had, you know, a consistent revenue top line, but, but it was on the tax returns below the top line.

where, you know, personal, personal things were written in, let's just say. And so there was this pivotal moment, I'll never forget where it was the broker, it was the seller, it was I, and it was noon on a Friday. I'll never forget the call. And, you know, at this point I'm running out of runway. I really got to close the deal. I've got this thing under contract. I'm close, but the banks aren't budging. Yeah. Yeah. LOI under 90 days or something? Yeah. It was a contract where you basically had something to the effect of 60 to 90 days to perform, To, to, to, to transact, to consummate the deal.

I'll never forget, you know, having to pick up the phone and saying, look, gentlemen, it's not, it's not, it's not going all that well. I don't know if this deal is constructed is going to get through. And I'll never forget the broker said, yeah, that's because you young man don't have the financial, you know, wherewithal to pull this off. And I remember saying to that, I said, you know, that may be somewhat true, but the thing that banks are telling me, and this was true. I said, the thing that banks are telling me more than anything is that it's the fact that the tax returns don't honor the P and L and that there isn't that, that carbon copy overlap.

Jon Stoddard (11:42.05)
that they just can't underwrite it with a high level of confidence because the fact that, look, you don't have it on the tax return to show the financial performance. They see the revenue, but they don't know how much this thing takes to the bottom. It's really more of a seller item than it is a buyer item. Ooh, that sounds like a power move. actuality is a power move. okay, he's like, it doesn't matter if it's Jason who doesn't have money coming in. It could be anybody because they don't match. I went through and...

they knew I did the work. had a list and still have that list of every single is funny because I'm working on a refinance for that same property now two and a half, three years later. So I know all the bankers in Eastern Nebraska. I talked to all of them. sat down, I did the whole suit. I suited up and went in. And so I was able to speak with a high level of confidence that no, look, this banker said this, this banker said that this banker has talked about this being a concern and they all basically aligned around. There were one or two that just didn't. Yeah, you weren't bluffing. wasn't a bluff. It wasn't a bluff. And so I held the line and Viola 30 days.

I think we closed on the seller finance only about a month after that call. Within about 10 days of that call, we did an addendum to the purchase agreement and basically swapped the same purchase price, but as opposed to it being 85 or 80 % bank finance, it went to 88 % seller finance. And so that was the bulk of the capital stack that was suddenly funded. And then from there, I just gave what I call an equity arbitrage. And I was so far from...

literate truly in a financial sense, but what I did know kind of for my dating days is the law of large numbers. If you outbound like a maniac, you'll put yourself in a powerful spot. So from LinkedIn to my network, to, the team I built their network, to, the youth, I still had a small albeit somewhat meaningful YouTube platform. Just, was niche enough where people all cared about making money. And I just broadcast it everywhere. I could, I have this deal. I'm willing to make it frothy for you. I need to get this deal over the goal line. Let's partner.

And that's where your 12 % private investor equity came in. Yeah, plus closed. So I ended up raising, it was just over 200,000 when it was all said and done that I raised in cash with the bulk being from, you know, from a, from a private investor who had, you know, seven figures in liquidity and had actually a husband that passed and had all this capital was just sitting there that needed to do something. And here I am.

Jon Stoddard (14:04.43)
And, but what made it really nice and what I always advise for people is I didn't just have one investor that was interested. had a handful and it was, I got so many damn rejections, but you know, if you cast a thousand lines out, you'll get 10 fish will bite. Right. And so even though I had no reason in the world to be pulling this off, I didn't know the asset class. didn't know how to put together investments. I didn't have the financial ability to really save the deal if things went awry, but not withstanding, I was able to give, you know, I think I gave just under a two to one equity arbitrage. So.

what, know, raise about 200 grand and that would have represented, I think to the tune of like 15 % of the capital stack, but I gave away about 25 % of the equity in the deal and, and promised that, you know, an 8 % kicker annually. it was turned out to be a little over a thousand bucks a month in a check. Yeah. Well, what's, let me go back to this 12 to 12 % and Vester, did you already know how to, you know, have the attorneys in place? Hey, you need to offer memoranda before you send out and ask people for money, or you just ask for money and then it goes like,

Let's fill in the blanks after that. No, and this is where I do it different now and advise it done differently than the way I learned from Dan Pena personally, but that's beside the point. Other than so to say, he rightfully gave me the advice of don't fly alone, young grasshopper, build a team. So I had actually at time two &A attorneys that were flying with, that were on the same team. they, yeah, one in particular came through and did the...

the contract work both on the negotiation side with the seller, as well as to put together the, you know, this is what would have been a subscription agreement and a promissory note to because it was a combination of debt and equity that I used to balance. Yeah. Is that investor happy with the performance so far? It's been Yeah, because it's been solid. The property, that property the following year, the pandemic happened, right. And, and we held the line and got 100 % economic occupancy without lowering rents and nickel.

from April of 2020 all the way through, believe it was October. So the entire, that entire worst period of it all, that property just absolutely performed. you're kind of three years ahead of what BlackRock started to see in the, mobile home market. Yeah. They're buying up like crazy. The valuations of then, although it was really hot then. I mean, that asset class. Yeah. The big, big, big, big boys know about it and are well aware of it now. But, even then just three years ago, I mean, it was still.

Jon Stoddard (16:33.486)
I thought I was at finding a diamond in the rough, but truth be said, the mobile home park asset class, was pretty well understood even at that time, in my opinion. So there were plenty of boxes there. Yeah. When you, when you offer seller financing, was there any concern on his side saying, this guy's like, seller financing has to do with you making sure that, you know, you don't screw anything up and like ruin the business was, did you have to answer that? Or did he just know, like, really? Nah, man, it's cash for a positive. It's great.

He was nervous. He actually tried and I don't even know legally if you can do this, but he tried to get me to commit to run the thing myself for two years. which almost is like indebted servitude. So I don't even know, you know, if that actually would work, but he tried to basically make it so that I had to physically, cause I think he knew. And actually I had the, I had my YouTube channel talking about what I wanted to do back then. He knew I wanted to go on and do more deals. And he basically tried to, to keep me there. And I bought, I remember saying, look, as much as I want to do this deal.

And it was a bold buck because I didn't really have a backup plan at this point, but I just knew I didn't want to give away two years of freedom for anybody, for anything really, unless if I, you know, decided to do so myself, I didn't want to contractually obligate to not do other things for two years. So I bought and said, I don't even know what the legal grounds on that. think you can do that. Yeah. I remember thinking about that as well at the time, but anyways, he came around. mean, it was the long and the short of it was the relationship I built with him.

the commitment I think I had shown going through the steps and candidly my willingness not to agree to terms that weren't reasonable to me. And, you know, I did pretty damn decent on that as far as the innovation. How did that change you from where you were? You were saying you were bringing a little tiny bit from your online businesses dating. And I'm going to make a note here. There's a guy in my mastermind who's really good at dating. He's got a dating business, brings in multi-millions. And he found the &A business, there was like a transference because

You know, you're working with the same kind of conventions, like the law of large numbers, how you approach somebody, you know, and, and making sure you have options, all that kind of stuff really worked out for him real well. I totally compare with that. was, it was really the skills socially that I built in the prior decade in that life is, is I lived it transferred really nicely. a lot of the same things mapped really, really well. So yeah, that was, that was, useful to say the least, far as that skillset transfer.

Jon Stoddard (18:59.506)
How did your training like Dan, Dan Pena taught you and you go, Hey man, go buy something. You buy something. How did that change your net worth? Did you just change it a thousand percent or what, what, what did that look like from? mean, look, properties, I didn't get it at such a steal to where I was infinitely, by all means only now am I starting to get to the point where, I feel like, yeah, I feel like now two and a half, three years later, where if I wanted to retire, I'd have a pretty damn good spigot.

for, I don't want to, but, now I feel like I could say, yeah, my wealth is really something there. There's something there at the time. I mean, look, let's, what's to say. It probably was bought around what praise value would be. guess if you offer more than the listed price that the broker had to sign the deal or I offered less, they were asking one for, I came at 1.25. We landed the plane at 1.275. Yeah.

And I, in retrospect, probably would have offered less. you know, it's neither here nor there. I don't think so. doesn't matter. You know, what I did though, is a gate neat stability cashflow. And it was a, it was a big first down. It, the other thing it really did is it quickly thereafter helped me transition. Cause I actually knew before I bought that property and the weeks prior to closing, I already kind of had a feeling that I was going to pivot from real estate to something else. And that was because the cap rates, which are a variant of earning multiples that you were paying for properties.

We're in the realm of 12 to 20 times learnings. mean, an eight cap, for example, is roughly speaking like 13 times earnings, you know, cause a cap rate is and a wide divide by purchase price. And when you do that math, I mean, you realize you're paying usually 10 times plus earnings for properties. Whereas, you know, I was at the same time, really, you know, just being in the MNA community, I was paying attention to what other people were doing, what they were talking. I was just, you know, finger on the pulse, trying to figure it all out. was still in learning mode.

And I was seeing that people were buying businesses for three times earnings. I just did the quick math and I said, holy, guacamole there. There looks like there's a lot more. mean, this is livable free cashflow certainly in the assets appreciating in value and dah, dah, dah, dah. It's nice to have some real estate in the portfolio, but you know, I'm ambitious. I, you know, I want to create a ton of wealth this decade, the 2020 or I should say within the decade, not in two or three decades. And it kind of for me felt like real estate was going to be a,

Jon Stoddard (21:21.934)
something I would really be happy with once I was 50 or 60. I said, no. It's cashflow, it's mobile homes, right? Don't get me wrong, it's cashflows, but you're levered, right? So if it didn't have any leverage, it would have been really great. But you're buying it with debt and let's just be clear about what debt is. mean, debt is obviously an obligation to cover that before you feather your own. So I was okay, don't get me wrong. was a nice benefit, it was proof of concept, it was a big win.

I was comfortably living indoors after the fact. Whereas before, mean, literally I was sleeping in the rental car. Yeah. Wow. It was, it was benefit. Don't get me wrong. But, but it, I just made that decision that I thought I wasn't going to continue with brighter living right around that time, but I needed to get down, you know, at that point it's like, get a deal done, you know? Well, yeah. Looks better on your report card next time you go. Yeah. Start something, finish it. Right. Rather you would again is another item.

but finish it. And so we did, we finished it. We stabilized it. then you work on it much. Do you have to answer to anybody a lot, get a lot of phone calls? No, because we're, covering, we cover our nuts. and, don't get me wrong with the first, I remember the first three, four months, I put some, some blood, sweat and tears out there as far as having to do some, some, a little bit of wrench turning myself, which, wasn't expected, but needed to be done on a, on a few instances. Yeah. The right guy then had to go through a really bad manager first.

I had a really bad manager, fired them, brought on a different manager who since has been fantastic. And that really, was. Implanting the right manager that let me then, pull my head up and say, okay, what do I want to do now? Now it's cashflow and everyone's getting their, there's occupancy was really high. And as I said prior, I kind of mentioned prior the property performed exceptionally well.

throughout this entire pandemic when really there was the rent moratorium, right? Where folks kind Yeah, the government said no raising the rents, yeah. Well, and state of Nebraska happens to be a state that leans red and there was a ton of job opportunity there. Everyone was making theirs. And so the property just performed really well. It was a great property. And this is something I talk about a lot on kind of my own platforms is how important it is to-

Jon Stoddard (23:44.206)
to buy businesses that have intrinsic moats whereby it's not easy for competition to come in and gobble up market share where it's your customer base is really entrenched into using your product or service. And at this point it was affordable housing that happened to be next door to Cargill, the largest private company actually I believe in the world. And so it was like literally the housing next door to a 3000 person employer where there's a bunch of other, you

thousand plus person employers within a 10. It's a hundred percent occupancy now. Right now we're doing a remodel. So now I think we'd be at 97, but 98%, but yeah, it's always been 95 plus. And then it's been a matter of, we want to keep people in? Are we going to, know, when it's vacant, do we want to remodel and then do that? But it's yeah, the demand is off the charts there. Yeah. Do you have access to the books? And I'm like, or does the manager do them and, somebody local do them and then just send them to you.

Like I have a, I have a bookkeeper that, that I sent all the receipts to and I spot check on occasion, but no, I, he doesn't, if the question was, the manager have access to all the books? The No, he's really more of a, I don't want to call him a maintenance band because he does more than that, but he's maintenance first because we own the unit. So a lot of it, which is kind of what led into to brighter utilities, but we're doing a lot of plumbing work. We're doing a lot of HVAC work, a little bit of electrical work, replacing shingles when, when the wind kicks up a little bit.

He does that first so that I have a fixed cost in so far as keeping the units maintained. He'll do the remodels. And then handles, don't get me wrong, handles the customer service items and some of the managerial items. But when it comes to the financial side, I pretty well handle that. Does he ever, the seller, does he ever contact you making sure, know, checks are coming in or ask about something or? The first six months, there were certainly more questions.

That's the other side of seller finance that isn't often discussed is what does seller finance look like once the deal closes and in your bank, it's a very different relationship than a traditional lender. Yeah, you're asking the seller to implicitly trust you. I don't even know you, Jason Rogers. Well, which is the reason that I'm such a deep believer in every hour you spend with a seller. Face to face.

Jon Stoddard (26:05.654)
Yeah, not over the phone, not zoom. This was pre pandemic as well. though I went face to face during the pandemic when we then subsequently started bright utilities face to face, the good old fashioned way, moves the needle forward and it's underappreciated. think in this day and age with everything being zoomed, like we're on right now, but the face to face goes a long way. I shook the guy's hand. You look somebody in the eye and it's not to say that, that there aren't sociopaths that can't shake you in the hand, look in the eye or shake your hand, look in the eye and tell you a bunch of BS, but

you know, was able to convince and assert that I would. So you learned a lot from that asset class. And then you moved on to acquiring B and B professional plumbing and air. Why did you settle on a, how the plumbing business and air? I love the plumbing business and I love the plumbing business because it's so demanding elastic on the service side. If your pipe breaks,

you have to, you pretty much have to handle it. can't, people don't forego plumbing. And to me, it goes back to why that property performed so well in Nebraska during the pandemic. was because there was such an inelasticity with regards to demand. And there was such a cornering of the market that that property had within that local, that local, marketplace such that we're set. mean, the property

The property is what it is in and of itself. It's fortified. so to me, actually as a result of working on that property and be involved in the operations, said, wow, plumbing demand is really high. remember one day I needed to call a plumber cause we were unable to fix the item there and the plumber came and 20 minutes later had me, had me dialed in and billed me 200 bucks. And, you know, I'm Nebraska. The pricing is a little different than, know, where I came from in California, for example, or even here in Florida. So I'm ever thinking for 20 minutes, you know, 200 bucks.

damn, and this was right around that time where I was thinking more and more about, I going to stay in real estate or I'm in a pivot? And, shortly thereafter, it was actually January 1st of 2020, the first day of the new decade where I definitively decided I'm going to, I'm going to go into, into utilities with a, with a, a focus firstly on plumbing and then bring on HVAC and you know, potentially electrical though we don't want to do electrical, but yeah, that was

Jon Stoddard (28:27.226)
It was that same demanded elasticity that really drew me to the sector. And B and B really, which I'm wearing, which has now added the air because we bolted on the air acquisitions. I mean, B and B was not the ideal acquisition target. The ideal acquisition target was service based services in, know, some joke has a water heater that doesn't turn on, you know, Joe has a stoppage, you know, his toilet won't flush. That's the, was the kind of work that I was involved in overseeing in Nebraska. That made a lot of sense. You can't negotiate with that.

but those companies, as it turns out, are, are highly valued, valued at four or five to six. the good service companies are valued at four or five, six, seven, eight, nine, even 10 times earnings. And I was finding, that there weren't a lot of acquisition targets that fit the buyer's profile that I was looking for that we're going to do it. And being, somebody that wanted to get a first down and get on base. BNB was a company that was doing a lot of, and still does to this day.

a lot of commercial work, notably with Publix, which is a huge grocer down in the Southeast. And they had a great, great client base, but they were doing bigger jobs, a little bit more complicated jobs. And we initially met with the sellers, two gentlemen by the name of Bob and Barry, B and B. We initially met with them. And I initially with my business partner met with them in February, right before the pandemic. And I remember telling them, guys, your business is just over my head.

you guys got, you know, all these big fancy blueprints and half a million dollar jobs. I'm not prepared for it. So I'm gonna have to pass. But I remember called them six months later after a couple other deals I had ran down, fell through for a number of reasons, called them back and said, you want, let's, let's, let's try to do a deal. And did they want, what was their motivation for wanting out? They were your traditional seller. Retirement age. Yeah. How old were they?

I think one of them is in the early sixties. The others in the late fifties. They founded the business in 92 sold in 2020. So had a 28 year run. Yeah. you did that deal specs on that 82 % SBA, but by that time you already owned the business in Nebraska. So you had a much better credit rating. Yeah, I did. And that helped. It did help. they put up 18 % seller financing.

Jon Stoddard (30:47.158)
Yeah. And I remember I did, that was kind of a complicated one, not complicated, but just there were multiple seller finance tranches, two silos. One was on the whole one's getting paid out as we, as we speak or each month rather. so there were, yeah, those two combined that were, were just under 20%. The other thing. Yeah. So that was basically then brought five negotiating with both of them, Bob and Barry, or was it, they, did they want the same thing or they want two different things? They did a good job of holding a unified front.

Yeah. I happen to know now that of course there once were slightly different, but during the negotiation, I didn't have any damn idea. There was one of them whose name is Bob, who I, I tell with more directly and, he was a good negotiator. I remember I made him an offer over the phone and, he said, you're close. You're I want to do a deal with you. You're close. Yeah. And, we played the price terms game. I remember we, we gave him.

the slight increase on price, which you wanted. And in exchange for that, we'd locked in the, 5 % on hold, which for sub $5 million deals, I think is a standard if you use the SBA in the States, whereby you put 5 % that basically doesn't get paid out until the SBA note gets paid out in full, lock in that 5 % on hold, and it creates an equity position for you. So you only have to go out and raise if you want 5 % of the purchase price in cash as opposed to, as opposed to 10. So we locked by the way, the price and terms, if they get the price, you get the terms.

If they get the terms, you get the price. That's a, love that. Yeah. Price. Yeah. Yes. Yes. Yes. So you had 8 % in private investor equity. Did you go, did you have that capital from yourself or did you go back out to your dating network? This came from a different, at this point, my dating network had, well, I won't say it had disappeared, but, but I certainly wasn't nurturing that, that world. This was, this was

my lawyers, wives.

Jon Stoddard (32:50.734)
friend or somebody should know colleague, if you will actually not quite colleague, but somebody should know who happened to be a, won't give too much information, but a very well-off doctor who, who had capital that wanted to be placed. And we had built a relationship with this individual for months prior to, to asking for capital. just checked in about once every month knew that this was an individual that had a high net worth.

knew that we were going to be looking for six figures in equity at some point. And we just told them, know, told him, should say, as well as a few others, but this was an individual we really kind of bird dogged early on and just told them, Hey, this is what we're looking for. This is how we're going about it. These are the steps we're taking during diligence. And what helped I must say, and this is something I really believe in is we walked away.

I kind of sped through it, but we walked away from a couple of deals that were deep under contract because things came out during diligence. One was essentially just a misrepresentation of the financials pulled out of that deal. One was actually the seller kind of started changing his story halfway through the halfway during diligence. First half of diligence, it was the best business ever. The second half of diligence, the business had fleas and there are a lot of things we need to be wary of. And it's like looking under the hood, man. Yeah, you find stuff.

You find a lot of stuff. think before we bought B and B, looked under the hood of, and when I say look under the hood, mean, went under contract and formally engaged in diligence process, not just, you know, sniffed around. mean, we went under the hood at least three times. may have been four. B and B was like the fourth or fifth time we went under contract. But, but it, it passed the sniff test. And then some, it was a great company.

Why did they take? Well, they took most of it in the money from the loan. 82 % from SBA. Did they just leave the office or do they stay around and consult or what? Where'd they go? We struck a deal with one of the two sellers to stay around for. I think it was a total of 1000 hours that we didn't use all of them that we had a contractual obligation to. To use if we if we so.

Jon Stoddard (35:06.968)
shows within the first year. He was great. And he's a guy, he's a, have a good relationship with the first seller I did business with in Nebraska. I have a good relationship with these two gentlemen, one in particular, who I'm speaking to or speaking about. He was great. I mean, he really helped with the transition. There was a period after about three to four months where you could tell it was time for us to, to kind of go in our, to continue going in our direction and for him to go in his.

And it was amicable. It was, it was positive. It was a win-win and you know, it was, it was a lovely transitionary period. And I recommend it if, especially for a first time operator, if you're buying a good business, if it's a distress business or, know, if you have a lot of operational experience, it's different, perhaps it depends on what you're trying to do. But in this event, did you know somebody to replace them? I mean, who stepped into the role of running the company? No, it was funny. So this was, I'll never forget having a,

A lot of these sellers, one thing maybe you've seen in different sectors have different kinds of protocols as far as how the sellers interact with buyers and, kind of the, the subculture of the industry. But, you know, in the trades, was, was insane with the mobile home park space. It was real common to meet sellers over, over a beer, for example. And I ended up doing that more than I ever anticipated. So I remember meeting this over a beer and he kind of looked at me and, he's like, sir, you, you're to this thing alone.

you got, you got a team you're going to bring on to run it with you?" And I said, well, it'll be me. said, you're going to be running it alone. Basically said, well, yeah, I've got advisors, but yeah. He said, you ever done this before? I said, well, well, no. And, he kind of me this look like, I don't know. It's like, why would I turn this over and you kill the business? took me 28 years to build. Like, he just gave me that look and you could tell it. And he's even confessed after the fact, like, yeah, I thought you'd be BK, but no, didn't think you'd make it.

But you gave me enough upfronts where I figured the last 20 % was icing if it came through. So no, mean, really the punchline is we needed an estimator because they're going after bigger work and we're still going after bigger work. Needed an estimator and needed a project manager. are the two kind of big roles that you have in a larger kind of commercial outfit. When I say larger, they're doing the larger work and the project manager, we pretty well figured out we could bring from internally and promote internally.

Jon Stoddard (37:29.587)
And that gentleman's still here to this day. And as a key part of what we do, the estimating side was the side we knew would be a little bit colorful. And it was, we had a really, you get that wrong and you lose money. Yeah. And we had a guy that said the right things, walk the walk, talk the talk, sat in a seat, got the job relocated from Chicago actually. And we thought we, we picked the perfect guy and about.

45 days in, I started to have real questions by 60 days. had a lot of questions. And after 90, he was terminated and had some real personal problems. Actually got arrested a couple of times, just several weeks after being terminated, had a night where he sent me some crazy messages right before he was getting terminated. I texted me at about midnight on a Sunday night, right before Monday morning. the guy really, it was just a terrible hire. Luckily, luckily, luckily, luckily.

He didn't do, we didn't sign the contracts that he went out and bid. And so we, you know, we had a dry period or we didn't bring in work, but we had enough work because commercials different, you know, these contracts can go three, six, nine, 12 months. So we had work, but our backlog was getting shorter and shorter. It's like, you got to get the plane off the runway at some point. got to pull out and have that pipeline full. Yeah. And so, you know, one of the individuals that works real closely with me and I was looking everywhere for, for an estimator and.

One of the gentlemen that works here to this day running our service side, he's a key part of what we do. He said, I know somebody and, Interview the guy brought him in. And within about a month, he landed a million in work and I landed two half a million dollar contracts in the same day on a Friday. I'll never forget. I was actually on a flight going to Nebraska to check on the farm, metaphorically speaking, and, had the $5 you pay for the wifi. And so I'm working on my phone. He said, we got the half a million. We landed the, Gandhi job.

And then two hours later, we got the Lutz job. So they're each half a million dollar jobs. that, really was a superstar. what did it teach you about hiring and trying to understand people and, know, being able to see, you know, how Warren Buffett could do it and take a look at you and he can analyze you. I don't know what he sees, but he's got some kind of ability to say, no, that guy's unethical. I'm not going to hire him. Right. Look, I can't say I have the magic sauce. I'll say one thing is for certain though, if you can work.

Jon Stoddard (39:55.371)
within referral networks. In other words, with people whom somebody, you know, and trust will vouch and say, yeah, that this individual can get the job done. I've seen him or her do it at XYZ location. He did ABC or D and I know firsthand this person can get the job done. That goes a long way. And that was the hire we made to follow up. Whereas the first one was the guy said the right things. know, everything checked out in quotes, but

you and I come in from the dating background, I thought I was pretty good at looking somebody in the eye and making an assessment, but yeah, we, you know, didn't bat a thousand there about a zero hit. It You're honest, man. They go like, I don't know. don't know. Yeah. network I believe is, the best thing I've got right now in so far as if somebody that you trust will put their reputation on somebody, that's a powerful Testament. ultimate. Yeah. Well, that's kind of like the, if I hear in the mob and I go, look, if I invite you to the social club,

and you're not what you say you are, you're get me killed. So you need to be who you are. Don't screw this one up. Our lives are on the line. So you moved to Florida. You enjoy doing this in this brighter utilities and this kind of work? I love it. grew up, my father was a roofing contractor. And so I grew up from about the age of, really started at 10, but from 10 to 20 until I got serious in university, I worked in the family business.

Okay, so this is right down your line. That's great. Is your father still alive? Yeah. yeah. So yeah, he's watching you see the success of this. Yeah. You know, it's funny. He was the biggest critic of anybody. Funny enough, the entrepreneur that inspired me to get an entrepreneurship. Hard as bones never given me a nickel's worth of money and will really tough love man. They love you, but it's kind of a different way, right?

And told me I was absolutely insane when I was going out, trying to buy the property. He get a broker's license. What the hell do you think you're to go buy a business? How do think you're going to buy property? You don't even know what hell you're looking at. What are you talking about? So yeah, he was real skeptical, but now he's of course, hindsight's 2020. He's like, man, I'm glad you did it. I love you son. Hey, this is my son. See this my son. Exactly. Now it's the prideful introduction. So, but yeah. So you did a couple of tuck-ins. It looks like a Patterson international service core and KB mechanical. So

Jon Stoddard (42:14.765)
What were you looking at right there going, if I add these guys to the, if I had these companies and revenue cashflow, could shore up some business. They've got, you know, they're self-running. They not going to take a lot of work on them or how'd that look? Sure. So the plumbing side, you know, so I'll back up a 10. We had a commercial division that was really strong. That's what we bought. Did a lot of big commercial work with Publix and other really strong clients. are like large corporations you do plumbing work with and the contracts are long. Right.

Yeah. Big long contracts. We've got that good. Let's build up the service side. Happened to partner with a guy who's my business partner, just in the other room right now, I think interviewing somebody as we speak. The guy's a beast. Just happened to have the service guy that came in because the service side is where you fix the toilet and get paid today. Really quickly quadrupled the service department here on the plumbing side, which was fantastic. And he and I are talking and I'm talking amongst the team saying, let's do it again in HVAC.

Let's let's bring that in now for the let's add the air, you know, add the HVAC side. And right around that time, got a call from actually the same broker that had listed, the sellers of BNB who said, Jason, you know, I know you're aggressive. I know you're thinking about maybe doing HVAC. Are you ready? I said, yeah, you know, I'm, I could be, let me show me what you got. Got me the meeting, with the gentleman,

trying to think which came first because Patterson and KB, they both, we dual track them all the way through. mean, we were, and then it got to the point where, I know I got the same date, August 17th on both of them. It Patterson around three in the afternoon and then closed a KB at 11 at night, same day. And that was intentional because we wanted, we didn't really want one without the other. wanted to, to be able to trade resources, the deals in and of themselves, I think we would have done, but we knew that

one plus one at equal three or five, because you could trade labor. One had a lot of assets. Yeah. There was the Acqui hire had more manpower and, and so it turned out to be good. mean, admittedly they were, they were businesses that in their prime were great, even though they were smaller. they were kind of revenue. talked seven figures or, yeah, they each did seven annually. one was doing two and a half. The other was doing one and a half, combined four.

Jon Stoddard (44:36.705)
but they had been somewhat neglected in the last year prior. And so what we did is we beat the hell out of the price. I mean, we cut the price from the initial negotiation to the end, we cut it in half for both actually. And that was fantastic. So we got both for much less than what we did. Yeah, and this Patterson one, you said you deal finance 103 % by private lender. How did you?

come across a private lender would want to put up that much. Yeah. So, I mean, the punchline was, is we bought Patterson at such a damn good deal that when you took the AR and you took the trucks and mind you, this is when trucks now are suddenly super valuable because nobody can get chips and vans and all of that, you know, use Mark. Yeah. If the market's down to the roof. So when you took the AR and you took the, the inventory and the material and you took the, you took the vans themselves.

The deal was damn near collateralized just by, you know, the physical assets and the financial assets of the business because we negotiated the hell. the key really is we did it. We negotiated for months on those two deals and to us on this side, it's like, man, look how many companies he's purchasing. But for you on that side, it took a while to put together. yeah. We, we, we slow played the hell out of him and did not rush. And that's been a huge thing. I really believe in is, let deals come to you. yeah, be aggressive.

get the fish on the line, but then don't get so aggressive to reel it in that you snap the line, you know, as a warm up. And I keep saying Warren Buffett, goes, how do you do acquisitions? Like just like I pick up the, I answer the phone. We got lucky in that respect and that we just had to answer the phone for those deals. Yeah. Because the kind of broker at that point was working for you because you, if you find a buyer, it's like a big fish or a bit of whale in Las Vegas. Well, I mean, we made the guy, I don't know if we made him a quarter million, but

pretty close in broker's fees. In about a 12 month span or actually less about a nine month span. So, you know, know investment bankers that that's a nice peaceful Wednesday for some investment bankers, but you know, in the deal size range that we're, we're dealing with, and we were talking about here, this was, we were a big fish for him. And so we made him a lot of money and he obviously, you know, he wanted to come back for more once we did the BNB deal and he brought those. So how do you think now you bought KB Mechanical?

Jon Stoddard (47:01.709)
right around the same time. Now you have a lot more credibility behind you with a couple of businesses, because you got seller, a hundred percent seller financing. He goes, what did you, did you have to show them your books or what did you, what did you do? they, yeah, great. Sure. First of all, I'm on the record. One can go look me up. And I said back in 2020 or maybe 2021 before that deal closed naturally that I didn't think on a hundred percent seller finance was

I said anything's possible, but I don't think it's likely to ever You're asking a lot. It is. that was my youth because everyone, know, there all these clickbait titles on the, in the &A world of how to get a hundred percent seller finance and the secret trick to guarantee all of this. And I was kind of coming to the camera saying, I'm skeptical. I'm I'm skeptical. You're going to do a hundred percent seller finance. KB, the reason we got a hundred percent seller finance on KB and we actually picked, we negotiated to try to get.

operating capital in the business after a hundred percent seller finance. So it would have been 120 % seller finance. And the reason I had the gall to kind of push for all that is because candidly it was a business that we only wanted on a very, very, in very, in a very small window. it make sense for us to do that deal? Patterson, we, we, we wanted to do more because it was service. That's where we're really scaling our business. KD Mechanical was doing the larger work.

I just got burned in months prior due to that loose cannon estimator that I commented about. And I just, just had hired a new estimator that I thought was going to work out. So I still had question marks with regards to the long-term viability on the commercial side. I knew we were, we were tripling our service department within six or so months. I knew we could do that on the HVAC side, the way we did them a plumbing. So, so the reason I got the a percent seller finance was one, the guy had neglected this business. was up.

out of state, out of state owner, neglected the business to he was of high net worth. So did not need the cash. And in some ways when it just created a tax problem for himself, did he have other cash flow or this business was just providing cash? This was just another, he has real estate up there. He has his main mechanical outfit. And when I say up there, it's in the Midwest, kind of near Lake Erie up there. So he, he had a whole bunch of other interests and this was kind of the neglected, this was kind of the neglected asset that didn't make sense.

Jon Stoddard (49:24.397)
within his portfolio. He had all these businesses up there. And then there's the one down here that's literally and metaphorically just getting neglected. And so we were able to come in and work a hell of a deal. did you meet him face to face or was all over the phone? did. He was down here. At this point, I was getting him to come to our office as opposed to vice versa. So kind of set the tone from the very beginning that it really had him in a position where he was selling me on buying the business from up front. And I knew

You know, in my comment on those kinds of deals, I mean, look, that, company had problems and we knew it had problems. was part of the reason that we took it on terms that were, we're that way. You know, I mean, what's a hundred percent of a problem. It's a, it's 100 % problem right now. I'm not saying it was, it was all bad, but what I'm saying, and this is what I told him is essentially, look, the reason I'm only willing to do this deal on a cut price for these terms is because I know there's headaches and I'm have to work through. And, and this is what it's worth to me, you know, and you have the right. actually.

Revert talk about reverse clothes. I remember sitting down, over breakfast, having a cup of coffee, call them up and said, Hey, good news. The appraisal came back bad news. There's no way in hell I'm paying that amount for the business. So here's what I'll do for you. I'll never forget this conversation. I see here. I'll do it for you. I'll send you the appraisal that I paid, you know, three or $4,000 for no problems out of pocket. Here you go. Give it to you for free. I'll give you the entire, diligence pack that we put together, all your financials, all your tax returns, all your balance sheet, everything bundled up right here. I'll send it all over to you and then you can.

have that perfect package to meet other respective buyers. And hopefully you can get a buyer that will give you the price in terms that you're looking for, because I, I'm not that guy. Yeah. I thought it was going to perfect takeaway. And he said, no, no, no, let's not, you know, he got real quiet. I never heard he was a talker. got real quiet for like 20 seconds. And then next day or two, he said, no, let's keep talking. And then, you know, from there, we, we, do you think his motivation was? Was it just to get rid of it? Or was there, if I do sell a hundred percent seller financing, it's better. Look, I'm not going to be.

Take a big tax. Yeah. I think he wanted it. I think he wanted to cut it out of his life because he knew it was not performing to the degree it was providing a marginal cashflow for, think a more significant headache. And because he was offsite and was a thousand miles away from it, it just wasn't performing in a way that I think was making sense for him. And the time, time money continuum of

Jon Stoddard (51:48.819)
low amounts of money, high amounts of climb. think it was giving them that. And the company was five minutes from where our headquarters were. So it's a thousand miles from his headquarters. It's five miles from ours. I said, okay. It was literally like down the street, you know, so that, that part was really nice. So let me ask you about your partner. How did you, why did you partner up? Is this somebody you've known for a while and how are you guys working together? How did you realize, Hey, these are my weaknesses. This is his strengths kind of thing.

So I have ruled two core partners now who are minority equity holders in what I do. And one is an &A lawyer by trade and the other is basically just a sales assassin by trade. Real smart guy. They're both real bright guys. they were gentlemen that I kind of teamed up with back when I teamed up with a whole host of folks. And I've talked about this.

document this online. had a whole big old team back in the early days when I followed the exact definition of what Dan Pena's spouse for. And I had all these folks and through a long process stopped doing business with most of those individuals. But these were the two individuals that more than anything just showed a showed very high character, relentless hunger, and just about, you know, boundless work ethic. And we're very bright.

you know, very bright. And so, you know, that trio, more buffeting one more time. Cause if you switch those two, the ambition with character, you're just going to get problems. know, character has to be first. Yeah. Great guy. mean, they're, great guys first. individuals I trust and we've done deals, you know, and when I say deals, I mean, sure. There's the acquisitions themselves, but then there's a number of other raises we've done or there's been for working capital or equity or debt or vehicle financings and you know, lease deals we've done or we've done a number of things.

throughout that process, whether it's, you know, establishing vendor lines of credit, all kinds of different stuff you do in business. And, you know, they're guys that, only recently I insisted that we have like a, like an internal legal document that espouses like, Hey, if shit hits the fan, then this and that, and, put me in the, you know, the shooting fire, which I want to be. That's, that's my position as a CEO. But I mean, they're the kind of guys that would sign on things. it took us a while to get to this point, but I mean, they they've done things for me.

Jon Stoddard (54:10.349)
that have been profound in vice versa, because they're good individuals first. And that's really, really, really, really important. Cause I don't have to worry about them. I'm trying to cut the number one thing that you gotta look, if you're in the SEAL team, you look to the right left, you gotta be able to trust them. Not, they may not be the fast shoot, know, fastest runner, best shooter, anything, but you gotta trust them. And we all made mistakes. mean, let me be blunt about something. When we bought BNB, I made a pretty substantial mistake with regards to understanding the AR and that first 60 day cashflow cycle.

Yeah. Messed that up pretty good. Had to raise a little more capital shortly after closing, is why the numbers. How did you mess it up? Did you underestimate that when they AR was actually going to be basically a, I basically screwed up about 30 days worth of cashflow projections. I had, I thought the, I thought net 45 was it, but it was really net 45 to net 65. And I looked at it more from net 45 to net 15.

And, and I was wrong. You know, I miss certainly the first three weeks of the given month, because you bill on the 20th of every month in the commercial side. And for whatever reason, I thought like the money hit on the first and not the earliest that hits on the 20th, if not even later. And so, you know, at the time, you know, our payroll was, I don't know, at that time we were running about a 20, $25,000 a week payroll. So three or four cycles of payroll, you're close to a hundred grand, not to mention other operating expenses. I mean, it was a, I made a six figure and we collectively though, I took the lead on it.

I took the lead on making that six figure mistake with the acquisition of B and B and you know that that was not pretty. That was not fun. I knew I didn't know everything I needed to know. I knew that the acquisition of B and B was ballsy and that it was commercial work and I wasn't particularly acute at understanding the nuance of that business. But I guess the point is, is they never doubted me during that process. And there's been a few things that in retrospect they've done that, you know, they'd say, shit should have done that different. Yeah.

But we've, we're all going to make these mistakes. Yeah. But, but we've iterated and that's been, and that's really kind of where we're getting to now is our mistakes are going from being this sized to being this size. So what do you, I mean, what's your goal to plan long-term goal here is acquiring more of these. Are you working on something else? Really need to get to a thousand. mean, we're running 26 bands right now. When it got here, we had 10. So we've, we've more than doubled in the last.

Jon Stoddard (56:38.477)
15, 16 months, but, but I'm really, really, really uncomfortable with, with where we're at. mean, I, I've set the intent and I do have the intent to build a billion dollar business and enterprise value. we're, we're a fraction of the way there right now, has micro fraction of the way there. And obviously the simplest, you know, KPI, you will, with regards to, to enterprise value is really, in our business, the number of vans you're profitably running every day and, or every business day.

And for us, we've reverse engineered. We pretty well need to get to a thousand, a thousand running vans on the 20 or plus 20 plus working days a month to really start being competitive towards that billion dollar valuation. And so that's the goal. mean, that's it. You're to have to purchase larger HVAC companies. Well, really, yes. One, we have to do larger acquisitions. the degree that we do acquisitions and then two, my marketing background, I'm finding

We've done, we've done really well organically as far as the organic growth side and the cost per capital to grow organically relative to &A with valuations is really interesting. So we'll still, we'll still be using, candidly finance borrowed finance to grow, but, we're running the cost benefit analysis of the &A side and how quickly we can grow there and what we can take on that side versus the organic side.

And it really is going to be a combination of two large vehicle purchases on one end, know, 20, 30, 50 tranches of vehicles at some point. And then having a bunch of different markets as well, where we had 10 vehicles here, 10 vehicles here, 10 vehicles here, 10 vehicles here. And doing that on an annualized or biannualized basis where you have to create the demand to get that truck to run. You have to get the phone to ring to obviously give that van something to go run to. And then you need the van itself, obviously, to be able to move that technician forward to go provide service.

Those are the three elements, the van, the manpower and the demand, the phone ringing. and we've gotten pretty good at optimizing those three things. and so now it's a matter of doing, you know, expanding that through &A, but also expanding that through organic financing of vehicles, then going out to the marketplace, recruiting talent and getting that phone to ring. Yeah. Getting that thing operational and keeping it in a cashflow cycle. And so that's what we need to do, you know, when we know it. Yeah. Do you know who Adam coffee is? No.

Jon Stoddard (59:04.077)
No, he's a guy that he's backed by a PE firm. They he's purchased about a hundred businesses bought and sold in his lifetime. But he just purchased AVHC companies, about 25 million size and the big markets and marching towards a billion on that. I love it. Good for him. That's a fantastic accomplishment. Yeah, you should. So consulting time, you should go talk to him. How are you doing? You're in competition, but I think there's so much business out there. Yeah.

So what's that? you still, are you training people? You know, we talked about this before we went online is, are you actually showing people how you did it or are you moving away from that? Officially I do it. I only do it with individuals that really at this point I used to candidly let folks, if you had the money, come on, let's work together and do a monthly zoom call and have some stuff I put together and all the legal documents and whatnot. At this point, I'm only doing it on an application basis. In bluntly it's because I had individuals that I would see on these monthly zoom calls.

And some of them might just, would, and I tell them, look, I just, the way you're talking about this, the way you're conducting yourself through this, the way you're, carrying yourself. don't see it. You're not showing the commitment. You're not showing, the savvy there's a number of things here that. So what would happen to me is I got frustrated with regards to, Transacting with folks that I felt had a really small chance of being successful in part due to commitment and part due to just, not having even the basic one-on-ones figured out with business. so.

Now it's really, I still do the monthly zoom calls for the folks who have transacted with me in the past. And I've done those for two and a half years. But I'm not promoting consulting and such in that it's just, it's a very small part of what I'm doing now, but I do, I do have that. My website is available for that. That's cool. Look, we're five minutes past that hour time. And I want to thank you so much, Jason, for being on this call. It's a, appreciate your knowledge of wisdom and sharing them with us.

Hey, look, I'm learning every day, sharing what I, what I've learned. And I really appreciate, I've seen you post in the Facebook group and, you've had some big interviews and, you've gotten a really warm reception to what you're doing. So I, when you reached out, I was really honored candidly and, a lot bigger fish you've had on here than, myself, but hopefully, I've been able to help somebody in some regard and appreciate you. You have me on. So, thank you. Thank you, Jason. Good luck in the business too. And if we can help in any way, let me know. Yeah. All right. Thank you.