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He Did a Dozen Deals with Little to no $?

Hello - Contrarian Thinking here; the cashflowing newsletter that won’t pimp you crypto or try to sell you an NFT. Like ever.

This week's newsletter is all about getting your hands dirty for some clean cashflow. Speaking of Cashflow, inside our Cashflow membership we have a ton of peeps who have negotiated killer deals when acquiring biz's like auto repair shops or car detailers.

Today in < 10 minutes we’re going to talk about:

• A guy who made $350k a year profit, off a biz he bought for $52k just two years earlier
• A gent who did 12 deals with $0 down
• Spoiler: It’s the same guy/gent
• A way for you to copy his cash-flowing homework.

INTRO

We met a guy… who put down $52,000 on a business that will now profit him $350,000 just 2 years later.

I thought that was kind of sexy.

And then he told me the type of business. Wah wah… auto repair. I immediately picture a mustard-stained shirt with a name tag that says “Earl.” Then I get PTSD thinking about how I go to these repair shops for a $10 oil change and leave with $572 in repairs of things I couldn’t even point to on the car. Auto repairs do not tickle my fancy. They’re probably not your idea of a sexy cash cow either.

Maybe we are missing something.

A lot of people assume that auto repair shops aren’t the way to go when you’re buying a business because:

• There’s too much red tape and too many procedures
• You’re in charge of finding the parts (and the supply chain is a b*tch to deal with right now)
• You need hundreds of thousands of $s to finance your deal
• There’s too much competition in your local area and it’s not worth it

Then we met Brian Beers.

He’s in the business of buying up these bad boys.

He was not into the idea of bootstrapping a big idea into existence that may never be profitable, while attempting to disrupt the $68.1B auto repair industry.

He has a different method in mind.

Auto Repair Shop → Franchise → Empire.

After acquiring his father’s “small” auto repair franchise business of six locations with his brother in the 2010s, Brian now owns 30 auto repair locations in Pennsylvania and New Jersey.

Brian (left) and his brother Chris (right) acquired their first six locations together from their dad when he was ready to retire. Photo Source: Brian Beers​

Each location does ~$1m+ per year in sales, 10%+ in profit.

But after Brian and his team optimize TF out of the processes at their newly acquired location, revenue jumps. How much? "200% revenue growth in less than one year" much.

The part that I like the most is Brian is a smart guy but (sorry) probably not a rocket scientist. He essentially uses our SOWS method of finding boring businesses that have:

(Stale) = minimal innovation

(Old) = longstanding experience

(Weak) = poor competition

(Simple) = simple but needed business model

Then he buys them and turns these fax machine-using companies into… auto "text when your service is done" companies.

Here’s why he bought into repair shops:

Older, well-known auto repair shop brands (like Midas, for example) have boomer franchisees, which means they’ve been thinking about retirement since forever. However:

1. Most franchise owners aren’t convincing their kids to get off of TikTok to run the family biz, they need someone to take over.
2. Owners would prefer to sell to someone they know vs. selling publicly and risking their employees finding out.
3. If you’re working with a franchise, you’ll get access to reports that are only available to franchisees making your search for your easier. Just look up the sales reports in your area to see who’s a good fit and add them to your prospect list.
4. Franchises are a closed network a.k.a. if your potential buyer is from the franchise, they’re already in the club, got the t-shirt.
5. So Brian buys Midas franchise shops, which means each acquisition tends to be plug and play within their ecosystem.

Here’s a look at Brian’s current auto repair shop spread, including some of the newest acquisitions to be added to their portfolio that closed in June 2022. Photo Source: Brian Beers​

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THE "HOW"

Fixing Cars with OPM:

Our part about this model, seller financing.

What if I told you that his last dozen or more deals were done without ANY outside capital?

And that most of them beforehand were done with a large percentage of seller financing and a smaller upfront payment?

As in… no need to deal with SBA personal guarantees over your head.

As in… no high-risk collateral (like putting up your house) that leaves you stressed out or asking your partner to sign their life away too, juuuuuust in case your business goes belly up.

As in… giving up your cash to hopefully fund a business and acquisition that’s profitable, while keeping your toes crossed in the process.

TRUTH: You probably won't get those kind of deals on your first go round, but the likelihood increases the more you are in a space. Here are the deal terms for two of the major auto repair shop deals he’s negotiated in recent years to give you an idea of the numbers:

Plus, when you use seller financing everything in your deal terms is flexible and negotiable (exact opposite of the SBA).

Want a lower monthly payment and longer loan length? Ask.

Want to include some assets in your terms? It’s on the table.

Would you rather put more cash up front? That’s an option, too. Want longer payback terms and a lower rate? Could be yours. Don't be greedy, look for win win's, realize you are buying someone's baby they've built from nothing.

How do you Negotiate these Kinds of Deals?

Brian’s style of negotiating a deal is my kinda casual:

• Coffee and donuts at the local diner.
• Dealmaking boots on.
• No suits.

Let’s walk you through a scenario of how I’d do this:

1. I’d go to my local auto mechanic and tell them you want to buy a business like theirs in another city outside of their area that wouldn’t compete with them.
2. I’d ask them if you could take them to lunch to learn about their business.
3. Then I’d ask them if you could write a playbook on exactly how they run their shop by following them around for a few hours a day for a week or two. At the end, you give them the playbook all neat and nice style (in case they ever want to sell) and you ask if you can pay them like $5k for it. (Or skip this step if you’re going to buy a franchise because you’ll be paying for this know-how already).
4. Then I’d get a map of all the auto repair locations in my surrounding 10-mile radius.
5. I’d start going to each location to check them out.
6. I’d ask for the owner and start chit-chatting them as a local biz owner yourself.
7. Then I’d ask if any of them ever thought about selling… at the right price of course.
8. Some will say yes and you ask them if you can take them out to coffee or lunch.
9. Before you pitch ANYTHING, you get to know their hopes, dreams and desires.
10. Then you circle back for the close. Only once they trust you will the terms go in your favor.

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IT COMES DOWN TO THIS

TLDR

Maybe buying a business in an industry you know nothing about (I hear the kids are into slime these days…) isn’t the best money-making move for you.

Maybe you’d rather be more focused and specialize your business chops with what you do best and let someone else do all the backend dirty work that you’re just not into.

I don’t think there’s anything wrong with playing to your strengths but, if it’s easy it’s usually not worth it.

*Fun fact: Queen Elizabeth was a mechanic - During WWII, Queen E begged her father to let her help the cause. He gave in and allowed her to train as a mechanic and drive a military truck.

*Fun extra fact: There’s a whole tik tok of female mechanics… and it’s lit.

I’d rather choose a business that is profitable on the day I buy it than blindly hope that it all works out.

That’s just the way I see it.

CONTRARIAN EXTRAS

The Not So Boring Section

• Early Retirement? Not so fast - We now have a $7 trillion retirement crisis on our hands.
• Like Peas in a Pod(cast) - Jumpstart your podcast made easily and tell your story to the world.
• A Good Cause - Did you know Rolex donates 90% of its profits? Well, kinda...

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The Vlog of a CEO Running a $50M Company

Wanna know what it’s like to be a deal maker? Get ready for a day in the life of what it’s like to close deals, build businesses, and speak to thousands of people!

Come along to see behind the scenes!

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Stack cash + use OPM,

Codie & Contrarian Team

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​Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.

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