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Dealmaking is what we do in Contrarian Cashflow.

Here are just a few things our community members have done since joining:

How do they do it? They learn about buying, not building, cashflowing assets inside of the Contrarian Cashflow community. What're we covering this month? Buying or Investing in Service-Based Small Businesses.

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🔊 Listen to the audio version of this week's blog!

​Deal making.mp3​

In <10 Minutes, We're Going To Dive Into:

1. Codie Then < Codie Now
2. Doing The Hard Thing -> Then Doing It Again
3. The Single Hardest Thing I Did
4. My Roadmap To Dealmaking -> The 6 Steps
5. TLDR

I'm just like many of you...

Maybe you’ve heard this before from me… if so skip to the part on becoming a dealmaker right after this.

BUT there’s something like 10,000 new faces here so I think it’s time to reintroduce myself to a few of you.

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Six years ago, I hated what I did, worked 65-70+ hours a week, was a slave to my paycheck, in a nightmare relationship. Basically, I felt like I wasn't even in charge of my day to day not to mention my life. Despite years of schooling, lots of hard work, and a pretty sparkly life In finance and investing from the outside, I was unhappy... to say the least.

But life is funny in the speed it can pivot. Today, the story is a bit different. I hit that magical (albeit ever-changing) financial freedom number, I own interest in 25+ small businesses, love every second of what I do, and am with a man I pinch myself I get to call mine.

Life changes faster than we think if we allow it.

It's ok to be the first version of me.

It's ok to be lost, confused, scared, broke, fat, depressed.

All those things are part of the human experience. What is not ok? Staying there. Your future is just sitting on the other side of fear, waiting for you to show up.

As we come into the New Year I can remember vividly the feeling of being lost. I was burned out in finance, working on someone else's schedule, tired of having my time tied to money.

Now people ask me, "how did you build it all???"

A lot of people ask me how I’ve built what I’ve built over the last year and a half.

All the businesses.

A real man and an incredible husband by my side.

All my friends are crushing it and are fascinating humans.

In the best shape of my life.

Have more energy than ever.

Truly financially, physically, mentally free.

So, you want to know how?

I do the hard things. Then I do them again.

Now maybe big empires and wild adventures aren’t your things like it is for me. My life isn’t for everyone, and hell I’m FAR from the top in any of these. But I think every human out there wants to be the best version of themselves and today more than ever I KNOW you need to be stronger, tougher, and more prepared than you’ve ever been. Alas, most people simply will not do the hard things.

And yet a muscle grows by breaking. A seed by cracking open. A child by growing pains. Humans need hard...

So how do I build this growing empire and life I love?

I said yes to hard things like:

• A man I knew could break my heart and hold me accountable
• Buying businesses and taking on debt that I had to follow through on
• Early mornings and late nights
• Spending $50k on a venue when I hadn’t sold one ticket yet for our conf
• Quitting jobs that were easy to bet on the value of the hard
• Building a team who all rely on me to pay them
• Being relentless about my health; working out, body & mind
• Never saying no to more info and smarter humans
• Failing publicly with my own name in a world of peanut gallery trolls

THAT is what it takes.

Someone said to me, I just have to do more things I like and I’ll be happier.

WRONG.

You need to train yourself to fucking love the hard. You’ll be amazed at how incredible your life becomes.

If you’re ready to do the hard things, you gotta, then do the smart things.

The SINGLE SMARTEST THING I DID; I BECAME A DEALMAKER.

I learned what it meant to become a dealmaker...

I began to think like a dealmaker instead of a rule-taker. I started investing in cash-flowing biz's. Not sexy startups, but boring businesses. So for those of you who think you want to do the same, here’s my path and how I’d do it again. It is not THE path, it is A path.

Freedom can be found down many roads here’s the road I took to dealmaker.

Step 1: Clarity

First, I asked myself, “What do I really want?”

Answer: How could I work when I want, where I want, and on what I want while earning what I needed.

Problem: I'm not smart enough to create the next Tesla, Bitcoin, FB, etc and I had no cool startup idea.

Solution: I can model (aka do finance and investing) like a MF'er and I'm pretty good at DD (aka due diligence and underwriting companies). Maybe I should just buy a boring cash-flowing biz to offset my income?

I picked up a pen and wrote this down:
In 90 days...

• You’ve closed your first deal
• You used a loan (OPM) & only $10k of your money
• To generate $7-30k in monthly income
• You’ve COMPLETELY replaced your W2 income
• You have bought back your time and now GET to decide what to work on
• You have an operator that does the heavy lifting
• You have a biz plan to turn that $7k into $50k monthly

Nothing like a little visualization to get things going.

Step 2: Opportunity

I started scouring the news looking for the best sector, the best entry point, the number 1 market. But something larger emerged a realization that opportunities were... all around. In fact in the US as of 2020, there were:

• 2.5M small businesses (1-5MM in revenue) for sale
• 10,000 baby boomers retiring everyday
• 19% of those own a small biz
• Only 1 in 11 will sell within 12 months of being listed.
• That leaves 91% of businesses for sale on the market — with motivated sellers — for more than a year!

So if there is an opportunity then how do I make sure I am equipped to take advantage of it?

Step 3: Learning

While sometimes I feel like I am that guy at the party who won't shut up about TSLA and his latest stock pick... here I go again, if I wasn’t in PE before and was just starting out here’s how I’d begin...

• Read these articles:
  • ​Buy a Biz for $0, Buy an Online Business, Bought a Biz for $1k, Buying a Laundromat, RE vs Small Biz Buying, Carwashes & Franchises, Finding Deals, Buying Trailer Parks​
• Listen to this podcast on:
  • ​MFM #176 - Buying Distressed Assets, Pomp #637 - How To Acquire Businesses & Build Wealth​
• Signup for Contrarian Cashflow and get access to our new Buying Online Bussesses Playbook
• When you’re serious about it take the Unconventional Acquisitions Course​
• Read this book on M&A - Buy Then Build by Walker Deibel​

Or he’ll this stuff is all on google you can just start digging in down a rabbit hole for free, pick your poison.

Step 4: Dealmaker Triangle

The Dealmaker Triangle = Time vs Money vs Expertise

In doing deals you are always balancing these three things. The more time you have to give the more you can take in a deal, the more money the bigger the %, the more expertise the more value you can circle. Your job is to determine what you have right now.

For instance, you could be Tom:

• $100k to invest
• 10 hours a week
• Expertise in advertising and sales

His deal-making triangle will tell him what kind of deals he can do and where his levers are to pull.

Or you could be Suzy:

• $5k to invest (but an SBA loan of $300k)
• 40 hours a week
• Operational small business expertise

Find your triangle and you’ll narrow your deal range. The more of any of those three you have, the more you can get in your next deal.

Step 5: Baader-Meinhof Phenomenon (Frequency Illusion)

Have you ever bought a new car and all of a sudden you see those cars everywhere!

Your brain largely ignores the hoards of cars you pass and yet once you purchase a new car, your brain adjusts, adding the model to its list of things to notice.

We’re bombarded with information every single second — so your brain chooses what to let through. What does this have to do with deals? Well, something magical happens the more you learn about buying businesses and doing deals.

Suddenly they are all around.

For instance, I bought a portion of a video production company.

I saw an opportunity with an owner who was overwhelmed, didn’t know how to grow but was great at his trade of video production. The business did:

• $120,000 profit (including owners salary)
• Valued it at 2x aka $240,000 (more a job than a biz)

Here’s how we structured the deal:

• Gave $10,000 down for a show of goodwill
• Took 40% of the company aka $96,000 worth in “value” of the company
• Took $48,000 in cashflow for my 40% ownership and profit share
• Brought in $100k+ in net profit through new client introductions

Now I have an investment that pays me $48k a year (and now closer to $5-10k /mo as it grows with every dollar we make) that I put down $10,000 and some introductions to get.

Step 6: Unfair Deal Advantage

We had one Contrarian Cashflow member reach out... who was an attorney. He wanted to know what type of business to buy. Now I’m on a path of least resistance to the highest ROI type of human so... I said; “Buy a legal firm.”

Here’s why... you have 3 hills to climb to doing deals:

1. Learning how to do the deal
2. Learning how to value/finance the deal
3. Learning how to run the deal

If you already know how to run a legal firm you skip step three. So before you go saying you want to buy a laundromat, car wash, bakery, etc, etc. In this case... sh*t where you eat. 🙂 Aka: Look closer to home.
If you’re an:

• Accountant, can you buy an accounting firm?
• Graphic designer, buy a design firm.
• Salesperson, buy a marketing firm.

It’s not the only way to do it but it certainly can be easier.

TLDR:

Remember the lessons, there are deals all around. Wall Street doesn’t have a stranglehold on the acquisition market, neither do PE firms. M&A isn’t easy but it can be relatively simple and straightforward. I’d also dare you to learn, never yet had a student say they were upset about learning the language of deals. After all, it powers the world.

If you want our free deal analysis calculator to determine if a deal looks interesting or not at quick glance join our referral program, hit five referrals here, and get the deal calculator!
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Always dealmaking,
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​Codie

What Would I Do With $10k?

We're hanging out on TikTok, wanna join us? This quick video covers what I'd look at right now with only $10k to invest. Would you like to see this as a LONGER form video? Like a Youtube, eh?

Perhaps that's foreshadowing... perhaps it's not... but perhaps it is... 😉

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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.