Chris Moore: 0:03

Beyond your paycheck, it's surges of cash that you can use to grow your net worth and feed your investments. Hey, welcome to the Surges of Income podcast. My name is Chris Moore and I'm so excited to have two guests here with me today Justin and Courtney and I'll introduce them in just a second. But first, if it's your first time ever watching my podcast, surges of Income Podcast, let me give you a brief introduction about what surges of income really is. Surges of Income is income outside your normal monthly recurring income that's not allocated towards your expenses and that's not getting hit in the mouth by cost of living and inflation, but instead it's money that can come to you from really four primary ways Number one, from the sale of a real estate property. Number two, the sale of a business. Number three, business profit distributions. And number four, tapping into digital marketing and sales, to be able to create large amounts of money using live events, digital events and product launches, where you can make lots of money in surges that can go straight towards building your net worth which is going to be really the true exit for that rat race and be able to have your resources, build you more resources, rather than having to leverage your time.

Chris Moore: 1:14

So, as you already know, i am the COO at Dealmaker Well Society and today I have Justin and I have Courtney, and both of these gentlemen are in our Dealmaker Proterge program That's Carl's mentorship inner circle business acquisition training program, and I asked somebody to come on my podcast. These two guys raised their hands and today we're going to be kind of going over a few things. One probably more focused around the buy box and you've probably seen some of my other videos around buy box and how I created my buy box, and that's pretty much what would have to be true for us to be interested in acquiring a specific business, and that also translates to real estate. We're probably also going to talk about, maybe, some things they're struggling with how to leverage their time, how to build teams to handle this deal origination and so much more. So I'll shut up now. Let's start with Courtney. Courtney, welcome to the podcast. Thanks for joining us.

Courtney Banks: 2:03

Hey, thanks for having me. Yeah, appreciate it, appreciate you having me. I'm excited to be here and yeah, man ready to rock and roll.

Chris Moore: 2:12

Perfect And Justin, welcome. Why don't you introduce yourself as well?

Justin Hertz: 2:18

Yeah, thanks, chris. Thanks for having me. Justin Hertz, i'm from just outside of Denver, colorado, and excited to be here.

Chris Moore: 2:25

Awesome. Well, brag on yourselves a little bit here, right? So, justin, you're a real estate investor. You've been doing it for a couple of years now. You've got quite a few properties in your portfolio. Tell us a little bit about that.

Justin Hertz: 2:36

Yep, i started investing in real estate four or five years ago, getting into Airbnb's, and last year I kind of decided I wanted to get out of that rat race. So we sold one of our properties and we were able to turn that into a couple more. I was really looking to figure out how to scale my real estate portfolio. So I just dove deep into real estate and figured out kind of what I needed to do And yeah, i guess it's been about three months ago I left my W2 job. I worked as a lineman working on power lines for 17 years, was in the electrical industry for 21 total.

Chris Moore: 3:14

So wow, you were probably pretty tan, weren't you?

Justin Hertz: 3:20

I was tan all the time I bet.

Chris Moore: 3:23

Yeah, that's a tough gig. I can see why you're doing that, so let's go back to the real estate portfolio. So cashed in, one of the Airbnb's took that money and put it into buying multiple of their properties. Are you still in like the long term rental game, or you still have some Airbnb's, or what?

Justin Hertz: 3:39

We've got two Airbnb's still, and we just bought a campground in Southern Colorado that we're renting out, and then we've got two long term rentals.

Chris Moore: 3:52

Wow, are you doing the whole like pace more, be subject to creative financing type stuff, or what programs were you a part of there?

Justin Hertz: 4:01

Yeah, me and my business partner joined a sub two like eight months ago or something Awesome. That's been great.

Chris Moore: 4:08

That's awesome. And yeah, pace and I are hosting an event together next week in Newark, new Jersey, and he came in. He spoke at our event back in Tampa as well in February. He's such an amazing guy, so that's so cool.

Chris Moore: 4:23

I wish I had more time to focus on sub two and that kind of stuff. I have one of my kind of silent real estate partners is kind of going through that course right now and we're going to start investing together a little later. But I really think it's so cool how you can get into these real estate properties with no money out of pocket And of course, I love that and I love the translation over to businesses is what we do is the same exact strategy, Right? And if you really think about subject to, I was on Pace Morby's podcast on his Sunday night thing a couple of weeks ago and we were talking about the parallels between real estate and doing subject to and creative financing, and then businesses and doing the same thing and subject to and business acquisitions. It's actually really interesting how it translates, but it's also different.

Chris Moore: 5:08

You're not just taking over someone's loan, like an EID all loan or an SBA loan that they got back in the middle of COVID, but also subject to taking over their lease payments. You won't believe that some of these business owners, especially brick and mortar, could have a lease payment. That's a hundred two hundred thousand dollars a year And part of the reason that they want to get out of their business to begin with is because the liability of having that lease and the landlord wanting them to sign another three to five year lease I mean they're signing their name next to six hundred million dollars of guaranteed out, even though it's not debt, it's future payments they have to make. So we've seen a lot of business owners literally hand the business over for free, even though it's doing fine, just to exit that liability, which is pretty loud.

Justin Hertz: 5:49

That's crazy.

Chris Moore: 5:50

Yeah, you won't believe in. most businesses don't own their own buildings, they rent, so just kind of throwing that out there. But thanks for giving me an update there. You know I have an Airbnb. I have three long term rentals at the moment, had more in the past but uh, and I'm looking to buy some more And the Airbnb game for me was it's been cool, but my fatal error is it's only one mile from my house.

Chris Moore: 6:12

That's the air. So at this point I'm kind of tempted to manage myself right. And then there's also not a really big Airbnb game here, so there's not a lot of people out there managing these type of properties. So it's okay. We have a lake house and it rents for about 400 a night, which isn't really all that great. When you think about it's worth 1.4 million. So the carry costs on it versus how much it rents per night, it's not really a big cash cow. Maybe 20, 25,000 a year in total net cash flow, which is good. But the same time when it's so close, i feel a little bit more attached to it rather than when somebody else is managing it from across the country.

Justin Hertz: 6:49

Yeah.

Chris Moore: 6:50

So it's a little bit about my background, but good. So, courtney, let's talk about you for a minute. What's your real estate?

Courtney Banks: 6:55

Yeah, i actually came over, just like Justin from Sub2 as well, so I was kind of ushered in through with Abraham Gray and went through the process. I had a pretty good end of 2022. Since then we've picked up two Sub2 properties, one in Kansas, one in Michigan And I kind of got into the process of being a private money lender, slash gator. Some of the things that you're here, if you're interested in the Sub2 program and what PACE is doing over there, it's been cool man.

Courtney Banks: 7:25

I've been learning a lot. We're getting into the process of trying to acquire more properties and being ushered into protege here, working with you and Carl and the team. It's like I want to get into businesses that create cash flow so I can dump that cash flow into real estate and just keep the miracle around working man. You know what I'm saying.

Chris Moore: 7:42

I love it. The two deals you've done subject to this year. What are you doing with those properties? Are those rentals airbnbs? What are you doing?

Courtney Banks: 7:50

So the game plan is to wrap The one in Kansas we've had a little bit of issues with. So we will either sell it to another investor or wrap it to a final buyer. And when I say wrap, that may just kind of take the Sub2 and sell it to an end buyer that may have trouble getting the traditional mortgage. So the first game plan for each of those is just to find a wrap buyer. The second game plan and you always want to have that in the back pocket is that there's enough cash flow spread on the long-term rental side for it to make sense And unfortunately in both cases those make sense.

Chris Moore: 8:23

It's really interesting. I love hearing about all the different ways you can take one property and have the ability to monetize it and also bless others, because there's a lot of people out there that can't get traditional financing And being able to do that type of reassigning the Sub2 over them is really probably mind-blowing, compared to if they go to a traditional mortgage officer or a bank. They're going to tell them there's no way you're getting financing And there are so many different ways. The parallels between the Sub2 and the real estate, creative financing, the business buying like we talked about is just uncanny. There's so many different ways out there to be able to do that And we look at every business opportunity. Every deal we get, every seller we get could be a potential opportunity. Right, you could either buy it yourself, you could wholesale it, you could help them grow it using consulting prequity, then sell it and take a big part of the upside. You can help them grow it using a consulting for equity and then buy them out once it's more fundable by maybe a bank loan. There's ways to help them merge with another business and take a success fee or part ownership of that business all from that one seller lead. So I think a lot of the translation is just being creative. The end of the day, that every seller lead could potentially be a deal for you or a way for you to monetize that, but at the same time, that's a fatal flaw that it's. That ability to be creative can also slow you down right. It also can get you very disorganized and you could be going after every single deal trying to monetizing when you should just be letting it pass. So what I'd like to start with diving into. I think both of you when I asked you for a little bit of an update on what's going on with you before we got on, both of you may have a little bit of a struggle on really nailing down your buy box and what we call deal specification, and I'd like to go through that one by one with you And just for anyone listening to this, when you go through and you define your deal specification or your buy box for a business acquisition deal, there's several things that you need to keep in mind, right?

Chris Moore: 10:24

Number one you need to imagine that you're going to go to a lender. You're going to go to a private money lender hard money to a bank angel investor and they need to feel like you are going to be a safe pair of hands for this business, not just from the seller feeling like you're a safe pair of hands, but the lender needs to as well. They need to know that you have the skill set, the experience, the background, or you can assemble a team that's going to make this a sure bet for them, something that's going to be almost impossible to fail. And that's why your personal experiences, your professional experiences and your background and the skills and knowledge you have play really, really a big role into getting into the deal. Specification and buy box.

Chris Moore: 11:01

Carl always says stay in your lane, and that's for a reason. Imagine if you have a finance background, like yourself, courtney, and you want to go buy something like a mechanical engineering business like there's no translation of skills there And for somebody who's lending you money as well as somebody selling you the business, they can't say, wow, i feel like this person's going to really take care of this business, or I feel like this person's a safe bet and I want to bet on this person. And that's really what this whole process is, and I think in real estate, not as much of that is in play. It's a little bit more agnostic compared to in buying businesses. It has a lot more to do with it. So if we can start there, courtney, you said you were struggling a little bit about what kind of business you should buy some of it because you were considering relocating kind of where you live, buying more of a local business. Or just tell me where's your mind at right now? What are you struggling with there?

Courtney Banks: 11:56

Sure No, i appreciate that, chris, so part of it is location being in California questioning whether I've always heard the kind of idea that you want to buy at least your first business that you acquire not far from where you are, just in case if things hit the fan you're there, you're able to be on site and get to it on a daily basis.

Courtney Banks: 12:16

Obviously, i want to be an owner absentee, an owner investor, so not having to be there on a daily basis, but more so managing it from a distance with a general manager in place. So I'm thinking about that.

Courtney Banks: 12:29

So it's just kind of the dilemma of do I want to relocate to an area and focus on buying a business in an area where I think I may be, but also not knowing where that area is, Because I have a background in corporate finance. I'll probably be in corporate finance for maybe foreseeable future, while looking to be an entrepreneur? I've always been an entrepreneur outside of working a day job, but that's kind of where I'm at And that just from a buyback buybox perspective. When I first joined ProterJ, my thought was let's get into a business that just cash flows, Let's acquire cash flowing assets. Let's take the Abraham Gray approach, where he has dozens of businesses and they all aren't general to a specific sector or a specific industry, but they're smart businesses, they cash flow and they make money.

Courtney Banks: 13:18

So that's kind of the thought process that I've had and really it's just getting out of shiny object syndrome and focusing in and Doing the research and actually deciding and pinpointing what I'm going to focus on, because you, in that way I'll be more productive, as opposed to, you know, kind of being all over the place. So that's kind of where I'm at is just really trying to zero in and just make a decision and move forward on on the type of business That I want in the type of in the area that I'm looking at.

Chris Moore: 13:45

So let let's unpack that. I'm gonna go over a couple things just to kind of set the stage for my answer. I've been all over the place.

Chris Moore: 13:52

No no, you're good. So when you look at the type of businesses that you should buy First, it starts with that one thing you said do I want to be an owner manager or an owner investor? right, and with someone like yourself, you're already an investor. The mindset of an investor is we want our money to make us money, not our time. We're not buying this business to buy a job from somebody else. So really, the one thing that sets kind of what we teach, apart from anyone else who's in the business acquisition game is We really focus on buying businesses that already have cashflow usually between 1 and 10 million in revenue Where several things are present. When that happens one usually between 1 and 10 million in revenue The seller is not working Multiple roles in the job. Usually there's middlet management layers in place Which allows the seller to exit and a new buyer to come in and not have to actually run the day-to-day. Really, you have three departments in any major business sales and marketing, operations and finance, hr, right. So maybe the seller may be running holding one of those, but when you have cashflow, you can hire somebody in to run that, so you don't have to. So that's number one. So I understand everything there.

Chris Moore: 14:57

I don't know where you heard you need to buy a business that's local to you. I don't know where that came from Hopefully I never said that but I own several businesses. I mean a lot actually but two or three of them are local and I'll tell you right now. Those are the ones that you end up resenting. Yeah, sometimes they they can be amazing, but when your employees and your team have you as a safeguard, they will use you. When they don't have you as a safeguard and they know you don't live near, they won't use you. So I don't know if that's really necessary. A plane You can hop on a plane and fly somewhere if you need to, but I wouldn't let the location of the business Depending on the sector, depending on what we're gonna get into in just a few minutes, i wouldn't let the location of the business really stop you. Just like you just bought a house in Michigan and in Kansas, you're an owner, investor of both those properties. They don't need to be in San Francisco, right?

Courtney Banks: 15:46

Never saw them. Yeah, never So.

Chris Moore: 15:49

Same type of thing. Keep that in mind. So, as we go to the next level of how do we take that finance background, that real estate background, being able to have the ability to raise private money for real estate properties How can we start translating some of those skills into buying businesses and what businesses would really benefit from your skills right? So when you look at a business acquisition, buy box, you want to look at what can I do? What can I buy where I can sprinkle my magic dust on top of it and make it grow even more, before he just saying I just Want to buy something that's cash flowing and stack cash flowing assets. What business can I take over or buy where I could give some of my expertise, my knowledge, my wisdom and put my Experience to play to help grow the business? because when you buy anything, you want to have the exit in mind. You're not buying this business just for cash. You're buying this business for cash flow for a certain period of time and then be able to exit it at some point. If you ever buy a business or really even a real estate property without having that kind of in your mind, usually it's not going to work out the way you want it to work out. I mean, you got to think about the exit right. So, starting with that, think about your skill sets being in the finance background. You probably have an extensive network. Think about what type of businesses would really work well for you. So you kind of have some of what we call horizontal skill set. Have you heard Carl say that before? Yeah, so for anybody listening to the podcast, horizontal skill set is something that would work really really well in any vertical. Compared to a vertical skill set, something like engineering or something like Manufacturing, that type of thing is not going to work really well when you go into another industry. But when a horizontal skill set something like finance background, raising capital, digital marketing, business growth strategy, business consulting, cpas, lawyers, those type of different skill sets and backgrounds can be leveraged in almost every business and be effective. So that also kind of hurts you a little bit, because then you get paralysis of analysis. Yeah well, you know Chris said, with my skill set in background I could probably add a lot of value to pretty much any business. But at some point you do need to hyper niche and focus down. So what I'd recommend doing I have a special training called establishing your dealmaker identity. I'm sure you've seen it, but I go watch it again and start thinking about not just what could I do, but what do I want to do? right, what is my life? What do I want my life to look like? It is one big thing.

Chris Moore: 18:17

Some people say and it's really confident when they say it to that They want to be an owner, investor.

Chris Moore: 18:21

But some people be.

Chris Moore: 18:22

They're bored, like imagine if you didn't have anything to do every day And you said a business that's raking in money, as much as that sounds amazing, you're gonna get bored.

Chris Moore: 18:30

So, having some level of enjoyment in either leading the vision of the company Or staying focused on the mission of doing something bigger than just one acquisition And maybe doing a roll-up and just one industry at a time serving the one customer avatar, maybe something like that's gonna be better for you, right, rather than going out and looking at all these different types of businesses, maybe pick a niche that would be really powerful for a roll-up, or and I'll go over what that is in a second and be focused on that specifically. The other thing that I encourage you to do is, i think, talking to several people Who have already closed deals inside our program and just simply asking them how did they develop their buy box? That's a really powerful conversation not not talking about you or what you do or what you're great at, but instead say hey, i just wanted to hear a little bit from you about your journey and tell me how did you come up with the The deal specification of going after dentist's office or going after home service companies, right?

Courtney Banks: 19:29

that's huge. I mean in the other, you know a mentorship that I'm a part of. That was one of the things that I did was I got Into the habit of speaking to individuals within the group. You know set of setting a metric, the tame for on a weekly basis speak to five new people a week, and that you know. Once you build that momentum and you start hearing about what people are doing, it kind of starts to make a lot more sense.

Chris Moore: 19:48

So definitely will repeat the process and are you doing that now already or no?

Courtney Banks: 19:53

Yeah, I've kind of begun that process. Okay, i'm starting to ramp up. You know I've had a few conversations. I'm obviously on part of team viper, so go, team viper, if you tune it in here Is that Brian's team.

Chris Moore: 20:03

Yeah, Brian's yeah, he crushed it today on the red light, green light.

Courtney Banks: 20:06

Oh yeah, he did his thing Yeah really really nice business that they have in play over there.

Chris Moore: 20:10

Yeah, that was cool.

Courtney Banks: 20:11

A hot market. I've been looking in Vegas as well, so definitely doing that people like like Brian, people like Sean, sean Breusler and a lot of others. So we're gonna remain in the ham and a dare and Again not have not have anxiety to feel like I need to get a deal done soon, but more focus on Refining a process that kind of filters out or filters in a deal that works for me.

Chris Moore: 20:33

Yeah for sure. And one more thing before we jump to Justin on that There's so many different right paths. There's so many ways you can go right. Your first deal can be something. You get it done, you get it out of the way and then you have a lot more confidence. Then you go after the next one.

Chris Moore: 20:47

That first deal could be a consulting for equity deal. It can be a much smaller business. It could be one that you joined in with three or four or even one more person from the group and did a business deal with them as Partner, just to kind of check that box and get it out of the way. It could be that it could be doing a deal just so you can see the entire process and have more confidence moving forward and have some Wisdom from the perspective of what you went through so you can make better Decisions throughout the next one. So sometimes don't put too much pressure on yourself to just say I got to pick a niche And then I got to go out and I'm gonna go after this billion dollar roll up, but instead sometimes just getting that perspective, maybe seeing who else in the group, could really you utilize your skill set And what you're really bringing to the table, because there is power in numbers And success is lonely.

Chris Moore: 21:35

That's why you see, inside of protégé There's like 25 or 30 different buying groups literally that many and there's a lot of people. If you're a CPA, you write your own ticket. They can go into any of those buying groups and get equity in these deals without even having to do any deal origination whatsoever. There's several of them that did that.

Chris Moore: 21:51

Right, if you have the ability to raise capital and you have the ability in the network of private equity funds and angel investors and family Offices, that will back you in any business that you bring them. Or maybe you have all these people that you already have in your network. That said, hey, go find me these type of businesses, what we'll invest in them. Right now, you could bring the deal flow to somebody and let them bring the capital. Or you could bring the deal flow and let them take care of, kind of having the whole system of doing the financial analysis, doing the simple model sheets, and you could build a business of people that have the skill sets or a group of people to buy businesses with. They have the skill sets you don't like. There's so many ways to do this.

Courtney Banks: 22:30

Yeah, just as you said earlier, get creative. You know, back in, i think February had a deal come across the plate, my plate And it was the first time I've ever raised funds. But I was able to raise, you know, over 700, 750 thousand in 30 days And I had never done it before, didn't think I could do it, but I was like let's take a stab at it. You never know until you try. So it's that same type of thing just build a momentum, putting yourself out there, networking. Yeah, i feel confident in the fact that things will come along. But, as you said earlier, it's about the pressure. When you see others doing big deals and things having things going on, you just want to rock and roll yourself. But you know everything comes along the path. It's a whole journey, it's a process.

Chris Moore: 23:09

It takes time and I think deal. We'll talk about the origination a minute. I want to jump over to Justin, but I think I think deal origination is huge and having enough opportunity to be successful, where you're not literally hanging on the, the balances of this one decision, of this seller, this one offer you made. There's a reason why in protege it says x, y and z for anybody listen to that's originate deals meet sellers, make offers, and that's the accountability metrics that we post every single week, because if you do those three things It's almost impossible to fail. So shooting past the target, originating a lot of deals, having seller conversations constantly gets more confidence, more experience. Doing that it's gonna lead to better outcomes. And then, statistically, if you make enough good offers, even if they're all seller financing You, you will have some that are that are successful, especially if you're originating off market deals, which are definitely the holy grail.

Chris Moore: 23:58

So, justin, jumping over to you for a few minutes, maybe it's pretty similar to what Courtney just said. I mean, you have a background in real estate. Your, your w2 job for many years was something that probably doesn't translate really easily to many different businesses, but maybe it does right. So tell me a little bit about where your head's at. Where are you in the journey of really picking your buy box?

Justin Hertz: 24:20

well, i think, yeah, with the power lines it is, it is hard to translate directly over but it's still, you know, construction based. So I Think that getting something into home services, some sort of Construction, i think I could, i could do well at, because you know I've got a good track record in that industry and In the real estate I think I could probably Utilize as well. But I guess I'm not sure exactly how to use that real estate into the business buying sure?

Chris Moore: 24:56

Well, let's dive into that for just a second. Home services is awesome. I love service-based businesses over product-based businesses because they don't have a cost of good sold. If they do have a cost of good sold, like Material, usually that's transferred over to the actual client where they pay that. That doesn't hit your margins. Service businesses usually have higher margins in general. Then home services boom during COVID.

Chris Moore: 25:18

Some people believe it may slow down a little bit, specifically on like remodels, but the the demand for housing is constantly still rising, so I think we're gonna be fine. And with prices and interest rates being high, so many people would rather just remodel what they have, versus go out and try to buy something new because they're afraid to sell their house, because they don't think they're gonna be able to get a New one. So I think you're on track there I I. One of the things with home service businesses is they have in general what we call low skill, low-wage labor market and That's the only thing that scares me about home services in general staffing. That's the biggest issue with type of home service businesses, right Where you can't keep good workers. Some businesses have figured it out, some haven't. Usually the larger businesses have already figured that out. They've got a great talent pipeline. They have some level of benefits where people want to work for them, so they don't have that much of an issue.

Chris Moore: 26:09

When it comes to translating that into real estate, you may look at your network, right? Do you have an area geographically Where you have a lot of people, maybe in the sub two or any of the real estate communities you're a part of are in that area? So imagine something like a Scottsdale. There's so many of the sub two guys out in Scottsdale or up in New England area. There's tons and tons of them up in New England, tons of them in Texas, right, imagine buying a home service business in that area. That could serve your entire network. What, while they do deals? that could be a possibility. Imagine if you had really deep connections inside the real estate industry in your area in Colorado Buying a local business that could actually cross sell all your relationships Maybe very beneficial.

Chris Moore: 26:53

There's all types of ways to look at it. If you were a giant flipper and you're flipping 30, 40 houses a year, maybe that's not giant anybody laughing at me for saying giant here But and you wanted to be able to have more of a scratch your own itch business. You've heard that concept scratch your own itch. Yeah, you want to do it for your own? I mean, that would work really well. It's kind of not exactly what you're doing right now, but There's all kinds of ways to do that. You could even get into the support businesses around Airbnb's if you had a solid network of different Airbnb owners. There's there's all kinds of different ways to do it, but a lot of that is pretty red ocean. There's a lot of different people out there doing that right now, so you don't want to fight for something when there's not very much market share available. So, when it comes to home services, are you gravitating towards any specific Like? I have a company there.

Justin Hertz: 27:43

Yeah, i'm gravitating Towards electrical contractors because, even though I was alignment for most of that, before I was alignment I worked as a commercial electrician. So I feel like I've You know, my experience there is I've worked on everything from the power plant all the way down to the to the light switch at your house. So I think with that and my, my knowledge of both industries, i think that there's a chance to grow a small electrical contractor and then maybe put in kind of grow that into some medium voltage areas as well, so they're not just Not just wiring houses, but we could get into doing something something more.

Chris Moore: 28:24

Have you connected with any of the other electrical contracting company owners inside of protege?

Chris Moore: 28:30

No, I have not so let's, let's connect you. Step one one of our guys. He's actually partners with Carl in one of their businesses. He's got an incredible Set of businesses across a couple metros in Ohio. His name is Vincent, so I'll connect you directly there. But someone like that would be a great sounding board for you as well, as they may have the ability to Maybe even partner with you and accelerate as well as add tons and tons of credibility when the lending side Okay and there may be some good synergies there. And I believe there's two other people as well who've been in that business for quite a while, one in Chicago. So remind me, without giving out everybody's identity on this podcast, i'll connect you directly with them.

Chris Moore: 29:09

But one of the biggest strengths of our network is the fact that there's probably somebody already else going after the exact same thing You are, or somebody who's has credibility or capital, an expertise and more connections than you do. That may be Wonderful to work with. And if you just brought them deal flow and You may be able to accelerate the number of deals you can do and accelerate How long it takes you to get it done right. So if you could go out and deploy an off-market strategy going towards aging or retiring electrical contracting companies residential, commercial and Start bringing this deal flow to this other gentleman I'm referencing. There may be some great opportunities to work together And even on your first deal, not putting a ring on his finger, but working with him on one deal, seeing how it works and be able to really accelerate the process.

Justin Hertz: 29:56

Yeah, yeah, I love that I'm actually working on originating deal flow off off-market electrical contractors right now.

Chris Moore: 30:03

Perfect. So let me get you connected with Vincent and he's really solid dude, really smart and what. I sat down with him in Tampa for dinner and I Got to learn a little bit more about the way his head works and his brain and he's got it's literally System and process designed all the way through the entire business, from all the way from the customer experience to the sales and system, to the way that the dispatching works as well as He was telling me a little bit about his talent recruitment funnel, so he always has people coming in so that that problem doesn't exist with employees. So either way, it's somebody I like to just be around, really smart people who are already doing what I want to do. So to me, that would be a great connection for you.

Justin Hertz: 30:40

Yes that's amazing Thanks.

Chris Moore: 30:42

Yeah, absolutely outside of electrical contractors. You know, that type of business is something where if you try to look at a bigger level, rather than taking one company and Expanding it over time, instead you want to do roll-ups or bolt-ons, where you're putting multiple companies together and raising the EBITDA And really the multiple what you could sell it for later. Those type of things are they call. They call them silo, single silo businesses where it probably works better If you're in a certain region, certain states, certain geographic area. Otherwise it's kind of compartmentalized and you don't have to have, you don't have the ability to leverage and have the Ability to cross sell as often in the area or be able to have the cost, energies of having one individual Handling a lot of your dispatching, one individual managing all of your different locations, compared to the other type of bolt-on or roll-up in that area is getting market share for all the different services that same consumer Touches and that's different between residential and commercial. But I would think about that too and kind of like what happens if I do buy an electrical contracting business. Am I just gonna try to grow it and Just be happy with that? or maybe do one or two bolt-ons a little later, maybe buy an HVAC company, maybe buy a plumbing company? Or do I want to do a single silo roll-up where I'm buying lots of electrical contracting businesses and either Keeping their identity separate or putting them under the same umbrella and growing your market share that way? I would just be in thinking about that as well, like what's the exit look like later, because that kind of determines what you need to do and with someone like yourself with that much Experience, if you find somebody more local to you, you could jump in and, at least for a transition period, ceo that business.

Chris Moore: 32:25

So one thing that I hear a lot of people say is I want to be an owner investor. I want to be an owner investor. But when you're given the opportunity, especially if you're not still doing the W2 job, there's no reason not to hop in that business as well. Pay yourself a salary, really get to know the business and be able to work your way out of it. There's nothing wrong with that. Yeah, you know. So that that's something that I do.

Chris Moore: 32:45

Every one of the deals that I do that's big. When I take over, like a consulting for equity type deal, i always work in the business for a certain period of time. Even I bought the bowling alley with Carl. I literally was there every night for 30 days and I did the full seller transition period. I got my GM. I was there every single day. I didn't just say, nope, i'm only an owner, investor, i'm not digging my, i'm not digging in and getting dirty. Courtney, you buy a business in LA, you can go down to LA for a couple weeks, yeah, but that it's just. It's a temporary period. But why not get paid?

Courtney Banks: 33:14

Yeah, there's definitely. You know. You should consider that there's definitely work involved And you got to get to know your business.

Justin Hertz: 33:20

Yeah.

Chris Moore: 33:22

And for me? I'm 37, i Want to, i want to work, i love working. So when I take over a business or I buy one or do consulting for equity, i actually make myself a role and I get in there and I have certain parameters of how much I want to get paid And I make that as part of the deal For me. I just helps me stay aligned with it. I have businesses that don't pay me anything. I have two or three of them that are smaller, more retail, local businesses, entertainment and fitness, and I don't make much money at all and I love those businesses, but the same time, it's really tough to Be able to allocate my time and attention to them when they don't pay me anything. Right?

Courtney Banks: 33:58

So yeah, that's a great, great point, chris, that you just mentioned there. Both of those are. If you were to ask me, what do I enjoy the most? entertainment and fitness. But they tend they tend not to be the biggest cash cows. You know, the more boring businesses, the more you know bread and butter straight straight to a type of businesses are the ones that kind of provide the best cash flow. So that's also kind of provided a little bit of analysis, analysis, paralysis by analysis, from you as well.

Chris Moore: 34:28

Yeah, i, i tend to stay away from passion businesses in general. They're great. Once everything else in life is covered Yeah, when you're mission over money and money doesn't matter anymore. But when you need to make money and you're not gonna be the operator, those smaller businesses don't have much meat left over. Like, yeah, there's only so much, you can slice the pie right. So I own half the gym and my other partners paid themselves and made a living and it was a wonderful gym. We've helped so many people. But over time, when I have to, something has to win, something has to lose.

Chris Moore: 34:56

It's really tough to allocate folk, i and attention towards something that doesn't pay you. And passion businesses are great until you're no longer passionate about it. Does that make sense? So once you get like on American Ninja Warrior and you fall and break your hand at pieces and you can't do it anymore, how do you get excited about your Ninja Warrior gym? You love the impact it's making, but it's tough to stay excited about it. So just some thoughts, just some thoughts. So, justin, back to you real quick. Besides electrical contracting, is there anything else that you feel like your skill sets, your knowledge, experience with Lennwell, towards in the home service space?

Justin Hertz: 35:31

Yeah, i've thought about I've also been looking at landscaping companies, yeah, and I think I feel like I could go in. I understand construction, everything that needs to happen, well enough, even though I might not understand plumbing totally, i understand what needs to be done, how to build out a schedule, how to time block on everything like that. So I feel like I could step into a lot of different businesses and, like you were telling Courtney, kind of have those sprinkle that dust of being able to help out, yeah, your magic dust.

Chris Moore: 36:13

It makes you feel better, You enjoy the business more when you can make an impact too. I mean at some levels, like you. Look at Carl. He has all these companies. He owns a lot of them, straight owner, investor but he still feels more in touch with it and excited about it when he has the ability to sprinkle his magic dust on it.

Chris Moore: 36:28

Yeah, one thing to think about with home services anybody watching or listening to is the problem with some home service industries is you have to have some level of professional license to own it or operate it. So imagine you go back to your example a second ago, like plumbing. Maybe you don't know much about a plumbing, but you could do really well with that type of business. Well, you're gonna have to leverage somebody's plumbing license right. So think about that when you're looking at these industries as well For yourself. If you were able to easily get reinstated as an electrician or have whatever licensing is necessary, maybe you still have it. That's an easy no-brainer. But to go out and buy an HVAC company go buy something like you're gonna have to leverage someone's license to be able to do business right. If you're gonna go buy a roofing company. You're gonna have to have some builder license to leverage to be able to do that And there's ways to do that with your deal origination And when you buy a business from a seller, you could have almost a lease back where you could lease their license back and have them stay on the board of directors, have a small ownership in the business, but each state's a little different.

Chris Moore: 37:27

The other thing with home service businesses is to keep your mind around and be aware of is there's really two different types. There's one that there's no decision needed period to make a transaction, compared to two You need to really have to make this decision as a consumer to make this happen. Let me give you an example. If you're selling windows and doors, if your windows are broken in the house and there was a hurricane, you're gonna fix them. You don't even think about it. If your septic tank's broken, you're gonna fix it. You can't live without it. If your HVAC's broken, you're gonna fix it. You live in Florida, it's gonna happen. Maybe not in San Francisco, right, but in another stereo it's gonna happen, you're gonna fix it. But do you really need to go and have that spray foam insulation done? Mmm, it's 3,800 bucks. It's gonna save me 100 bucks a month on my heat and air bills. What they told me? There's a 38 month break even period. That's gonna be a little bit harder When you have to get into a business that you have to convince a consumer to do a transaction.

Chris Moore: 38:20

It's always gonna be a harder business, right? Being able to fix cracks in a driveway is it really hurting anybody? You've really gotta make a decision to get that done. So that's where I would encourage you to think about it, where some people get into these kind of high ticket home service businesses but you have to spend so much money on customer acquisition because you're literally talking someone into a transaction. It's not something that they need. They're gonna get done period, right? Someone has a bleeding wound. They run in the hospital. They don't care what it costs, they get it done. Someone's entire electrical box is all screwed up at their business and they're about to open in four hours. They don't care what it costs, they wanna get it done, right. So I would look at businesses that don't take a decision to do a transaction.

Chris Moore: 39:05

And then the other thing with home service businesses. You kind of have like high ticket, high margin stuff and then you have low ticket and high volume, right. So if you're a plumber, you're not doing a lot of high ticket stuff besides maybe like leak locator services, things like that, installations and new construction. There's not a lot of money in it besides the volume. You're always busy, you're always making that money. Every time your guy shows up, you're charging per the hour, you're making your money. And electrician probably residential is very similar, maybe a little bit higher ticket, right. But then you've got HVAC and you've got roofing, which are necessities plus high ticket. So that may be something to consider as well, because I love high ticket and I like high margin, because you can have fewer customers and make the same amount of money, right? You wanna sell a $5 widget a thousand times or sell a $5,000 widget?

Chris Moore: 40:02

no, I'm sorry, a thousand-dollar widget five times right, Is that's the difference, the concept between the two.

Courtney Banks: 40:06

We've been looking at emergency remediation businesses as well but down in the Southeast Miami, like you said, hurricane, mold, all that stuff that comes, Like you said, when it happens. It's not a question, it just has to get fixed. And so, to that point, those are the differences in businesses. That's really important.

Chris Moore: 40:24

For sure. The other part of that is and I hate that I keep talking, i want you guys to talk too, but the other part of it is demand. Is there demand for this? Is there overwhelming demand for this? Are people literally fighting to take their wallets out of their pocket and pay you to do this right? When that's evident, it doesn't matter how many competitors there are. There's enough market share to go around right, compared to when it's not very competitive and it looks like a great opportunity but there's not a lot of demand, it's gonna be a very difficult business to get into. So just some thoughts. Alex Hermosi in his book $100 million offers talks about three different types of markets. Have you guys ever read that book?

Courtney Banks: 41:02

No, I haven't.

Chris Moore: 41:04

Definitely can't get dumber from reading that. I'm telling you it's good, really, really good. It talks about a lot about creating offers and making things they call Grand Slam offers, which it's so much value, so good. People feel stupid saying no to it. Right, that's the premise of the book.

Chris Moore: 41:17

But he also talks about good, great and bad markets in that book, right? So the bad market is when the demand is going down and the competition is either staying flat or going up right, so there's fewer people wanting it, yet your competition, the number of businesses that you're competing with, are the same, or it's rising. A good market is when the demand and the amount of competition entering the market are consistent or parallel right, compared to. A great market is when the demand is going up faster than the competition is rising right. So you have to look at everything you're jumping into as well. Is this a bad, a good or a great market? And I think it's just a good thing to think about How many people are going to Googlecom and searching for this, how many people need this? And if no one's searching for it, that's gonna be a tough business to maintain.

Chris Moore: 42:03

Oh yeah, Yeah. So just some thoughts. Well, good, let's hop back over to you, Courtney. Let's talk about deal origination a little bit, if that's okay, I know for anybody listening.

Chris Moore: 42:15

Deal origination, for what we're talking about specifically for business acquisitions, is just the idea of going out and finding businesses for sale. Two really ways to do it there's on market and off market. On market is broker type deals people who've gone to a business broker and listed their business similar to a real estate agent in the MLS versus off market deals, when going to people who are not raising their hands saying, yes, I wanna sell my business, but instead going to them directly. Whether it's doing a direct approach walking up to someone face to face, sending them a letter, doing LinkedIn and skip tracing, and reaching out to people on cold calling asking for referrals there's lots of different ways. So let's just talk about you for just a second, Courtney. What are you doing currently for deal origination? and maybe a little bit less action than you could be doing, because you're still trying to figure out exactly what you're going after, right?

Courtney Banks: 43:04

Yeah, no, 100%. So for me I started out just kind of going full speed ahead with direct outreach. So direct outreach, mailing out letters directly to business owners that you've researched, and kind of cold call, not cold call, but kind of found their information via the internet and other means.

Courtney Banks: 43:27

So I was going full speed with that, milling out anywhere from 50 to 60 letters per week. And then that's when I kind of got into the mode of are these the businesses that I really wanna buy? Because again, they were focused toward car washes, laundry mats and things of that nature which are a little bit lower ticket, but they're also simple businesses, So it's just kind of depends. So that's where I kind of hit the pause button, looked at my buy box, began to redefine what I want, what I'm thinking about, the region that I want to buy in, and I got back to looking at brokers as well. So right now I'm simultaneously, say, for every five direct letters that I mail out, I'm looking at one broker opportunity. So that way I can kind of have this somewhat of a balance between looking at new things in the market and getting ideas, but also kind of maintaining productivity and not just kind of sitting on my hands, if you will.

Chris Moore: 44:21

So that's the way I'm gonna So with that activity. what productivity is coming from that? Are you having consistent calls or sellers respond to you? What kind of response rate are you getting on the letters?

Courtney Banks: 44:31

So one of the metrics that I found I think the last time I tracked it probably was about like 18%, so maybe one or two letters. From a direct outreach standpoint, one or two business owners are getting back to me. A lot of the times they're not necessarily the most affluent business owner. We were talking about these type of businesses. So their thoughts are they just kind of want to get off of this. They're a little bit older in age, they're just ready to be done, but they have really no idea where their value is for their business.

Courtney Banks: 45:02

And to me those are the type of people that you want to reach out to and get in contact with. And then on the broker side, it's just since the numbers are already available when you work with a broker, looking at those deals and looking at where the EBITDA has been for the last three or four years running and then kind of taking it from there. So it's kind of obviously developing that filter process to get it down to a business that really looks good to you.

Chris Moore: 45:28

So the ones you're having conversations with, maybe not so affluent, but they're tired, they're of retirement age, et cetera. Any traction with those whatsoever.

Courtney Banks: 45:39

Not yet. So I've had probably seven conversations, seven direct conversations, but I probably had over a dozen, maybe close to 20, that have actually responded out of the letters I probably mail out nearly you know, like I said, nearly a hundred letters at this point.

Chris Moore: 45:55

Sure.

Courtney Banks: 45:56

It's solid results, but again I'm not, you know, just jumping off the porch with excited about oh, someone reached out to me you know, I'm taking you and Carl's information and really applying it and really digging into the numbers, having the conversations you know I develop in a mud score and just kind of taking it from that perspective.

Chris Moore: 46:17

Mud score, mud motivation, urgency, distress, anybody listening or watching? just so I can clarify that. I want you to just suspend reality for a second. Let's just say you're a salesperson, right, when you looked at your pipeline, the number of opportunities you've had, let's say you've sent out activities of 200 letters. You've had 40 responses. You've had seven phone calls with people, right?

Chris Moore: 46:43

If I was teaching you in a sales relationship, i would be breaking it down to the different levels of conversion, right? So the first thing is of the people I reach out to, how many am I actually making contact with? That's your first conversion rate. The second one is how many people are actually responding? That's your response rate, right? Your third one is of the people responding, how many can you actually get an appointment with? That's the third conversion rate. The fourth one is how many people you've set appointments with actually show up and you are actually able to make some level of communication with them, whether it's on the phone or whether it's Zoom or in person. And then the fifth level of conversion for what we're talking about is how many people are actually moving forward with the LOI, right?

Chris Moore: 47:22

So if I broke it down, usually when I hear things like I sent these many letters out, I had this many people respond, i had this many conversations and that didn't really lead to anything. I'd like to just break it down and find out what happened and where is the breakdown right. So the understanding of an 18% conversion rate, or even response rates, really, really good for letters, that's solid. So the second thing is let's not try to solve that problem. The second one is you had 20 people respond. You only had seven of them on the phone, right. So I think part of understanding the first level of how we can dive in and make this stronger is maybe what does that process look like? right? When people respond, what do you do? What's the next step? So tell me a little bit about that.

Courtney Banks: 48:04

Yeah for sure. So they respond to the letter. I may get a phone call or an email back, because both my contact information is in the letter From there. Look to jump on a quick phone call with them and just get an understanding of who they are. Get more, set the stage for building rapport, because obviously when you're dealing with direct outreach, people aren't just gonna send you their financials after maybe the first initial conversation. It would be amazing if that were the case you could work a little bit faster.

Courtney Banks: 48:33

But it takes work. It takes some time to build rapport, to ask questions, and I think out of the seven conversations that I've had, if I were to estimate maybe one or two people are probably at the point where they're ready to receive an LOI or allow me to dig into their financials. One of the others is just possible tire kickers wanting to know more about me, wanting to get an idea of what my thoughts are on the valuation of their business, and I'm like I just can't spot check it. I actually need some financials and we need to have further conversations. So it's in that process of me and to your question maybe having a pain point of how do I get this to the point where I'm able to underwrite it, decide whether I like it, then submit an LOI.

Chris Moore: 49:22

So when you say underwrite it, carl teaches something called the sniff test, where you can literally get several small pieces of data put into a model before you put any more energy into it. Determine whether it's gonna pass the cover ratio. Is the deal structure that you're looking to do actually gonna work right? so maybe one of the things is, instead of trying to say, you know, i need to dive deeper, i need to get your financials, maybe just start with very small pieces of data where it's a lot. So in sales in general, we call it friction. How do we reduce Resistance, reduce friction? so we find things that kill the conversation and then we remove them right. So if Imagine you were asking for an NDA in the first one and all of a sudden Everyone's ghost town. They won't reach out to you ever again, they won't respond, then you remove that conversation, say I don't, don't ask for the NDA. Instead, imagine your sales person and you're trying to get people to sign these big-ass contracts. Well, you stop that and you switch that out for a one-page, simple agreement, yeah, and then you get a lot less resistance and friction to the sale.

Chris Moore: 50:22

So I would go back and kind of focus on what are those conversations sound like Where did I have people drop off? So maybe, instead of saying that you can't give them a valuation, why don't you give them a valuation, sure, why don't you give them what they want? so instead, when they say, you know, courtney, it sounds great and what do you think my business is worth? That's probably what they asked you, right? so say, hey, well, let's dive into that. Really, if you can give me five or six pieces of information, let me go plug it into my model, which is not going to be a hundred percent accurate. Of course, there's gonna be a lot of conversations we need to have.

Chris Moore: 50:53

I need to understand a little bit more about the intricacies of the business What's your current level of involvement, what's your current role in the business, etc. But for now, at least we can start there. It's great. So let me. I just need five pieces of data. If you can just get those five pieces of data Set up the next appointment and come back, what you're also doing is allowing them to kind of stew in that they're thinking about it now. Now it's in their mind and you help them. So I call something the advocate shift. They ever heard of that before I made it up, so you probably haven't, but the idea is there's a way in conversations where you can take someone and turn yourself into their advocate.

Chris Moore: 51:26

You get so much more buy-in, so much more buy-in, right now when you can shift the conversation towards I'm helping somebody, and Especially when it's an educational, focused conversation, you can really get there buy-in right. One of the things I like to ask sellers on the first call especially Evaluation comes up. I don't answer. I don't answer questions to begin with. That's one of the things you learn in sales. I don't answer questions, i ask questions. Yeah, so when someone asked me a question, i turn around and ask it back to them in a different way. So if you said you know, like hey, you know, courtney, i don't even know what my business is worth. What do you think my business is worth? I'd stop and say, well, tell me, what do you know about business valuation? It's called a positioning statement. So the moment you say that you are now the authority, when they say I don't know anything, okay, great, now you're educating them and you can even have even more trust when you're educating. Well, let me tell you how it works.

Chris Moore: 52:15

There's a couple things that we have to understand and establish to be able to find the current valuation. One is gonna be x, y and z. We're gonna look at this. We got to look at transferable value. And to start with, why don't we have another appointment where we can dive deeper. For now I just need about four or five pieces of information. Then I can come back with you with a much better understanding and then we can have a deeper level conversation. So instead of letting the conversation get to a point where you say, hey, i need all this information to be able to get you What you want, just kind of take it along to smaller conversations, and every small conversation is something called frequency of exposure, which builds something called familiarity, which is part of no like and trust. So you ever heard of no like and trust?

Courtney Banks: 52:59

Yeah, yeah in sales.

Chris Moore: 53:00

No, like and trust. No is familiarity. They want to know that you're familiar. Knowing somebody is somebody that they've not just had one interaction with, but maybe multiple. Like is somebody has their best interests in mind as well, as they feel like they have common interests And they like your energy and attitude. And then trust comes from expertise And the fact that they feel like you have their best interests in mind. Right, so you can't build rapport without no like and trust. So multiple frequencies of exposure. I rather have five small meetings in one.

Courtney Banks: 53:29

Yeah, not.

Chris Moore: 53:31

Have you heard of my eight, my eight step pre framework for Annuity offers? Have you actually heard that training yet?

Courtney Banks: 53:38

I have not actually.

Chris Moore: 53:40

I'm teaching this live in dealmaker weekend June 24th to 3rd, 24th and 25th in New Jersey. I'm teaching something called the art of pre framing and I have an eight-step process To have a pre framing conversation with any business owner to get them 100% open to a seller financing offer. So what I would do is I take those four or five conversations, build up that rapport. I'm now their advocate. I'm educating during the process, which is different with a broker deal. Don't do this with a broker deal. With the seller financing deal new details and then you drop that eight-step framework on it. It's called I'm gonna bring you an offer. Okay, that's how it works up. So yeah, i'll make sure you guys see that, but I can't go over that today. Maybe we can do it. Another podcast episode, but that's what I would do. So I don't know if that helps at all.

Courtney Banks: 54:28

No, it kind of gives me the perspective of not being so structured But saying, hey, if you just got a few pieces of information which is a little bit more casual, it doesn't make them feel like they're given over their social security number after one conversation. Right helps kind of sleep, ease the common, the process along a little bit. Yeah, that's a great point.

Chris Moore: 54:44

Like, think about, would you give that information to people you don't like, know, like and trust? Yeah, for sure. I mean, if there's implied authority and trust like you're sitting down at a desk with some guy at a car dealership And he's asking you for a social, for your social, and you're filling out a credit app That's fine. But they don't know who you are and they're not in that parameter of their trusted area. Right, i'm looking at my whiteboard over here. I actually may be able to turn it over so you guys can see it. You guys see my whiteboard.

Chris Moore: 55:08

So that's a conversation framework for outbound Lead generation, for off-market, where we literally take people in and we fright from the beginning. We say, hey, courtney, it's Chris, i'm gonna be direct with you. We're looking to buy businesses in your market, in your industry. Your business looks like a great fit. I got to ask you a couple questions. Oh, they're like. Oh, yeah, that's great, let's talk.

Chris Moore: 55:28

And then we go over the answers to the survey they filled out in my lead form and all psychologically driven to the point where we end up telling them their business is not exactly what we're looking for. Then we tell them about our buy box and then we shift it to the advocate, where we're now helping them And then they're eating out of the palm of our hands. Hopefully no one in my funnel is watching this, of course, but you see, the sales skills is probably the most important part of negotiation being able to have that like that sales and psychology. But it's all about no like and trust positioning, having them feel like they're, you're their advocate rather than somebody trying to get something from them.

Courtney Banks: 56:05

Yeah, no question, 100% makes sense.

Chris Moore: 56:08

Cool, all right, justin, on you, we only have about another six or seven minutes. So your buy box we talked about it Deal origination thus far. Have you been doing any activity so far towards that?

Justin Hertz: 56:21

Yes. So With virtual assistant I hired I had her going for on market deals to start. I kind of Spent a few days with her training her kind of stuff. I was learning from protege of kind of what I'm looking for for the on market deals What, what I'm looking to buy, and so she started going crazy, adding them to my spreadsheet. We were signing, getting indies sign and stuff like that. I've had a couple seller meetings With an electrical contractor and then a landscaping business, also here, and both of them went Awesome they were. They were great meetings. I Listened to a bunch of stuff on protege for you know what I needed those seller meetings to look like And they went. They went great. So currently Running the numbers and I'm hopefully gonna have those LOIs submitted this afternoon on both of those.

Chris Moore: 57:19

Wow I.

Justin Hertz: 57:21

Want to The the broker deals are are cool. I'm definitely gonna stick with them. But I've also gone through some of the training from protege and started Researching how to do the the off market stuff. So we've been working. I've been training her the past couple days of how to kind of skip trace all those. So we've got a list of 60 60 local businesses that all kind of hit, that, that Retirement age type type stuff didn't mean interrupt somebody listening doesn't know.

Chris Moore: 57:53

They're like what the heck is skip tracing. Can you tell us that?

Justin Hertz: 57:56

Yeah, skip tracing is it's just you know, say you know the name of the business and then you maybe know the name of the owner, and then you go back and Use a search filter to Find you know maybe their personal phone number, Maybe their personal address or something like that. So then you can, you can Directly that way.

Chris Moore: 58:19

Perfect, i know what it was. I just wanted you to, just in case someone says what the heck is that? Okay cool. Have you done any thing with your VAs and maybe shown Him or her? Jim Helms is the training on LinkedIn. Or have you shown your VA Toby's coach? Toby's training on how to use business databases to find your exact business, even with the age demographics?

Justin Hertz: 58:44

so I I did go through Toby's training and And I tried using the website that he was using on there, but it looks like they had changed it.

Chris Moore: 58:54

They may have.

Justin Hertz: 58:55

Yeah, a little bit and so I spent it was. it was pretty frustrating, so I've Found another way to do it. Okay cool, yeah, and that VA I hired. one of the reasons that I hired her was because she had run LinkedIn for her past her past Boss or whatever and she's she's really good with that, so she's been. If you don't mind sharing what?

Chris Moore: 59:18

what VA website do you use? I? Use a if you know, if it's like a best-kept secret, don't say no, no no, it's actually on Facebook.

Justin Hertz: 59:29

It's, it's. I need a virtual assistant on Facebook. Is the Facebook group?

Chris Moore: 59:37

Oh, so it's a group, okay, cool.

Justin Hertz: 59:38

So I just I just posted in there and my phone was oh, I bet my phone is blown up instantly.

Chris Moore: 59:45

I bet, i bet, yeah, that's a cool spot. I've hired hundreds and hundreds of VAs from different websites. We've done From South America, we've done Philippines, we've done India, pakistan believe it or not Ukraine, colombia, but I've just I'm always wondering, i'm always interested in that process. So cool, most of just anybody watching. I've probably used online jobs, dot ph, the most. I really like if you're in the US and you want to have somebody in your time zone you can go to. Is it virtual Latina, calm, something like that? and it's one where they have everyone in South America. Everyone speaks English, everyone's on the US time zones. That's a pretty good one as well, and what's so cool is they're all specialists. They're already really good at something. Every one of them nice, you know. So it's kind of cool. Just some different ones, but that's awesome. Yeah, well, good, sounds like you got a good thing going there.

Chris Moore: 1:00:36

One thing I'd encourage you to do and this kind of goes back to what you were talking about a little bit, courtney is When you're really doing deal origination at a high level and you have a lot of volume of deals coming through, make sure that deals are earning your time before you put too much time into them right. So the biggest focus is having seller conversations, in my opinion, over even just doing sniff test. If you know in general that they're fitting the same demographic, the businesses that you're looking for, the industries, and they have the right amount of revenue, i would have a lot of seller conversations. The more seller conversations you have, the better right. Rather than saying, okay, i've got all these businesses I need to evaluate, i got my spreadsheet out, i'm looking at everything. Who cares? if you're having seller conversations with people who don't end up being good deals, go back to the very beginning. Every opportunity could be a deal Because you're you're sitting here. Courtney said you're talking to all these different people in team viper. Right, there may be 10 or 15 different buy boxes in there and there's a lot of different people in there that are looking for the same amount of money. There may be a deal that you're talking to a seller and they're not really a perfect fit, but they really want to learn more about how they could exit their business because they're not ready. Send them over to Alan Gregory, who's working on certified financial He's doing financial planning and exit planner and refer that over to him. Or, if you know somebody else. That may be perfect for that. Maybe that's their skill set and they're looking for consulting for equity and underdeveloped businesses. So for me, i'd have as many seller conversations as humanly possible.

Chris Moore: 1:02:03

A disconnect from the result a little bit. I'm not needing all these deals, but instead in sales we call it the doctor patient method. I'm not sure if you've heard that, but you go in as a salesperson, as a doctor, and you don't just write prescriptions without asking where is it hurt? how long it hurt? What have you tried to fix this? what else is happening? and you want to be able to take care of the person you're talking to.

Chris Moore: 1:02:23

So when you go into seller conversations with a servant's heart, when you're not looking to take advantage of people Or just by their business, but instead trying to understand their business, understand what they're going through and try to help find a solution, whether that's me buying your business or not, i'm here to help. That's the advocate shift I just told you about. And when you approach conversations like that, justin, you're super empathetic guy, so I like even when I asked you about your superpowers, that was one of your superpowers people feel comfortable with you, people feel like they can trust you. Same thing with Courtney. I've been Courtney and I've hung out in person. You have a great positive aura. I mean people are going to trust you automatically and both of you are very smart. I think if you can kind of shift your focus of the conversation towards doing something like that, you're going to find a lot of success.

Justin Hertz: 1:03:07

I like it.

Chris Moore: 1:03:07

Okay, it's powerful because your goal is to help them if they truly want to sell. Even if it's not good fit for me, you're going to walk away from our conversations with more knowledge and I have people I can connect you with, but the more seller conversations you have, the more businesses you'll buy.

Courtney Banks: 1:03:25

That's great point.

Chris Moore: 1:03:26

Yeah, so I would focus on that. I mean, imagine if you're looking at a thousand real estate deals a day. You know you don't look at them longer than 12 seconds and the ones that have certain criteria get more of your time, right? So for you, justin, you got a VA doing it, your VA is doing all this stuff. You may take it to the next level and be able to say, okay, my only goal here is seller conversations And get really, really, really good at them. If you have two seller conversations a day for a month, at 60 or even working days, 50 of them you're going to have so much more knowledge And every seller conversation you go through it's just you get that much better at it. Yeah, you develop a process compared to the end picky and only having a couple of seller conversations. I only want to talk to people who are perfect businesses. You're not going to sharpen your axe fast enough, right?

Courtney Banks: 1:04:14

Yeah, you think I like.

Chris Moore: 1:04:15

Dan. You guys know Dan in our group. Yeah Yeah, like Dan, dan probably talks to the seller every 12 minutes. You think he's good at talking to sellers. He's crush. He's amazing. Jim. The same way, there's tons of Jeremy talks to sellers all day long. Jared, who shares an office with me, literally talks to sellers all day long. They know exactly what to say just from repetition. So just some thoughts.

Chris Moore: 1:04:38

Well if I could help either one of you in any way leaving this call today. Besides, justin, we're going to get you a connection that we talked about. Courtney, do you want any connections specifically that I can help make for you? and you can message me directly if you want. It's fine.

Courtney Banks: 1:04:54

Yeah, yeah, we can definitely talk, talk offline. I'll just, you know, continue to network with individuals and once I kind of hone in on my exact buy box, i'll definitely have conversations with those are kind of leaving the charge in that area.

Chris Moore: 1:05:08

Let somebody else's perspective help build your perspective. That's what I like to do. Tell me about why you did that. Why did you choose that? What have you done in the past that you'd never do again? Like, what businesses do you want to stay away from and just learn from other people's experience? I think it's be huge, but is there anything my question still stands anything I can do for you right now, before we end this, that maybe somebody else can benefit from any questions you want to ask, anything at all.

Courtney Banks: 1:05:33

No, i feel pretty good. I feel like you've helped a ton just on this call itself, outside of just other conversations we've had. And, yeah, for me it's about you know getting back to work and keep you updated on what's going on and, yeah, networking with other individuals in the group.

Chris Moore: 1:05:48

so Let me know if there's any way I can help you at all. I'm here for you. I appreciate just being here and being open, and even though you're not you're not seeing tons and tons of live people watching us on YouTube. This is going to be syndicated out through Spotify, at iTunes at like all of that, so I'm hoping that what you're dealing with and deal origination and buy box somebody else is also dealing with that and maybe some of the advice that we talked about can help somebody else. So perfect, just anything from you.

Justin Hertz: 1:06:17

No, no, you answered. I was going to ask you what I should do with all those leads that I had, but you answered that question. I need to. I need to start getting on the phone with them so I know how to transition from there.

Chris Moore: 1:06:28

I think that's wise. I think getting on the phone with people and just going through the reps is huge and you won't believe what you'll learn from just those repetitions. Right, you may say, oh wow, one of every five people I talked to is actually prepared to sell. The other four are at some level not prepared, and the reason why is because when you're going off market, you know a lot of those people haven't really been considering that for a long time. So you may be able to develop a system that You could even sell or give to other people one day and help other people, because I've had so many seller conversations. I dealt with so many people who weren't quite ready yet. Here's the educational conversation process I went through. Here's how I built Excellent rapport and it led me to three consulting for equity deals. I was able to help someone turn around their business before they went bankrupt and I bought two other companies That could be one year later just from having more activity rather than specific activity, right.

Justin Hertz: 1:07:20

Yeah, that makes sense. And then the more conversations you have, you can figure out your KPIs and say, okay, i need to send out this many letters, this should give me this many phone calls. Out of this many phone calls, it's going to lead to this many LOIs and this is how many is going to close. So then you can just duplicate that and just move on that way.

Chris Moore: 1:07:41

Go back to the point I made earlier five levels of conversion. You can go through that anytime When something's not working. Break it down at each step and say, okay, how many people am I sending out versus my contact rate? How many people are I'm actually getting responses from? How many people that I'm getting responses from? am I able to get an appointment? And then start focusing on just that one thing. Right, if you're noticing that you're getting responses and not getting appointments, change the way that you're responding to people and test new things until it's working.

Chris Moore: 1:08:08

Go back and ask everyone you can find on Protogay When you get someone who responds to a letter, what are the three or four things you do that work the best to get somebody on the phone. Have you asked that question specifically for me? If you have, ask it to 10 more people. You can go to Mona and say all right, you guys are doing letters for so many people, who is the most successful with it? And then go right to them and ask them what's your secret to being able to get a higher response rate? And then, once people respond, how are you getting them on the phone? And if you just go, learn very specifically, not the whole process, just that one part. Then all of a sudden you can drastically increase the number of conversations you're having just from that one little thing. Look to see where things are breaking down and tackle it there.

Courtney Banks: 1:08:49

So question Yeah.

Chris Moore: 1:08:52

Awesome. All right everybody. Well, thanks for being here. Surgeons of Income Podcast This is actually episode number eight.

Chris Moore: 1:08:58

I've been wanting to do this for a long time. I've been behind the scenes for many, many years running businesses and growing businesses, and it's fun to be out and helping people And I'm hoping a lot of people get to watch this. If you're thinking about business acquisition, maybe you're in real estate, maybe you're an investor, maybe you're in the markets Not many people left in there playing around But maybe you want to get into business acquisitions and you want to tap into Surgeons of Income. I love the idea of being able to build a business to sell from the very beginning. Whether you're buying a business with your intentions to flip it or grow it and sell it, that can lead to a huge surge of income as well.

Chris Moore: 1:09:32

As I have 12 businesses, i think now Seven of them pay me quarterly profit distributions on top of my normal like income and operating expenses and my mortgages, and all that And every dime of that goes straight into investments. So the idea of being able to tap into money in large amounts all at one time, buying businesses and business profit distributions, is a great tool for that. So thanks, guys, for being on with me.

Courtney Banks: 1:09:57

Thanks for having us For sure.

Chris Moore: 1:09:59

Hopefully I'll see you guys in a live event soon. We've got September coming up. I'm going to be in New Jersey next week. Don't know if either one of you guys are going to that. And then, justin, if we can figure it out, we're literally flying into Denver on Monday.

Justin Hertz: 1:10:10

So if we can figure it out, I'm 20 minutes from the airport, man, so one of our business partners lives there.

Chris Moore: 1:10:17

Maybe text me you and Carl and the group chat and just we'll see if we can figure something out. I don't know what our schedule looks like. I'm not in charge of that, but we'll figure it out.

Justin Hertz: 1:10:25

Yeah, well, that'd be awesome.

Chris Moore: 1:10:27

Thank you so much. All right guys enjoyed it. Thank you so much. If it's your first time watching, please like and subscribe. Thank you so much for your time and your attention And we'll see you next time. On Surges of Income Podcast See you guys See ya.