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Codie Sanchez

@Codie_Sanchez

May 16, 2021 • 10 tweets • 3 min read • Read on X

Scrolly

Oh hey there... so you wanna buy a laundromat?

I heard ya. SO - some of the tools we use to buy 'em.

Also remember - he who keeps it stupid simple wins. A thread on deal docs:

How do I know this isn't a lemon?
Oh that's a good q. You need a deal calculator.

Here's how we measure it. Super simplified but it lets you not waste time on sh*t.

It's not an IOU, it's an LOI (letter of intent):
Fancy way of saying, Hey Homie, I'd kinda like to buy your business.

BUT I'm not proposing, we're not exclusive, we're just dating. Cool?

Your biggest expenses in laundry land are:
- Water💧
- Rent🏠

It's the 80/20 rule. Control the 80% and you can handle some loss in the 20%.

Getting due "diligencey" with it (ugh, that was a stretch)
- DD is how we private equity peeps dig into deals to see if they will ROI well
- This is a sample of one of our sheets for analysis

*Sidenote: I LOVE TEMPLATES, makes it easier to never get emotional w/ a deal.

Sometimes biz owners lie about their profits (SHOCKING - I know)

- So if the tax returns don't match the profits, you go count quarters.. I honestly love this, it's so oddly rewarding stacking coin

Creating a P&L
- Basically - are you getting what you paid for, can you run it and profit, throw it into a spreadsheet and math wins.

Thought we'd get your beak a little wettttt on how these deals get done.

1st deal is always the scariest, then you realize deals at $100M or $100k rhyme.

It's not easy, they're called sweaty biz's for a reason. BUT it is doable!

Holler in comments if you want the full stack of deal docs.

Or go check out Unconventional Acquisitions...

You want these bad boys?

Get on our free email list: we got a special surprise for Contrarians this week:
contrarianthinking.co

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More from @Codie_Sanchez

Codie Sanchez

@Codie_Sanchez

Apr 23

This is Bill Perkins.

He's worth 100s of millions, a hedge fund manager, poker player, asymmetric thinker...

And my smartest mentor.

Steal his 7 principles on how the rich think differently:

1. You Have ZERO Risk

Most people are afraid of risk because their egos can’t stand looking like an idiot.

I remember being slightly mind-f*cked by Bill's idea that educated people have no actual financial risk.

Listen to him explain it here:

2. Don’t Get Attached To Your Ideas

You need people in your life to give you a reality check from time to time.

One time at Bill’s house, I was in the midst of sharing a new business idea when he interrupted me to ask:

"Has small infected your thinking?"

Read 10 tweets

Codie Sanchez

@Codie_Sanchez

Apr 22

The system is designed to keep you comfortable, not wealthy.

This financial autopsy of a 36-year-old couple earning $350k proves it.

Look at these numbers:

I just analyzed this financial autopsy of a couple in the Detroit suburbs:

- 36 years old
- $350K combined income
- $700K retirement accounts
- $900K mortgage

Looks like the American Dream on paper... Let’s look at the monthly

Monthly income:

1. Wife: $7.2k ($3.6k x 2 per month)

(Salary is $150k/yr. After taxes, her take-home is ~$86k/yr)

2. Husband: $7k - $12k

Total: ~$17k per month

Read 18 tweets

Codie Sanchez

@Codie_Sanchez

Apr 9

Stressed about what you pay in taxes?

Start a business.

Whether you run a VC-backed startup or freelance on the side, the US tax code favors business owners over everyone else.

Here’s everything you should know:

1 - Business Expenses

You can take a deduction for anything you use to run your business.. internet, phone, software, conferences (including travel)

Business owners can also deduct their home office square footage from their rent or mortgage (which W-2 employees cannot!)

2 - Solo 401k

If you have no employees, you & your spouse could each get a $70K tax deduction by setting up a Solo 401k!

Unlike a corporate 401k, you fully control this &can invest it in (almost) any asset

You can even use it to fund a Roth IRA!

Read 13 tweets

Codie Sanchez

@Codie_Sanchez

Apr 5

Business scaling isn't rocket science.

But it is a science.

After working with 100s of companies, I can tell you the difference between the ones that plateau and the ones that explode comes down to these 3 levers:

Every scalable business needs:

- The right people (who)
- The right systems (how)
- The right focus (what)

Miss any one, and you'll hit a ceiling.

Let's break down each piece (and I'll share what most get wrong):

1. Let's start with PEOPLE

Most owners hire too fast, fire too slow, and expect a miracle in between.

A bad executive hire will cost you $200-300K+ and waste 6-12mos of momentum.

But get it right? You start to own your business instead of being owned by it.

Read 15 tweets

Codie Sanchez

@Codie_Sanchez

Mar 29

Build your business so it’s sellable… and you’ll never be forced to sell.

This is the map for a business that runs without you (& attracts serious buyers):

Most people run their business until they're miserable. And then try to sell.

Don't be most people.

First step…

Your goals and objectives will tell you what you want out of the sale.

"Codie, my goal is to sell for as much as possible. Duh.”

Which is sort of true…

But what you’re really after is making a lot of money without having to stay at your company until you die.

Read 15 tweets

Codie Sanchez

@Codie_Sanchez

Mar 12

MBA graduates are no longer interested in employment at Goldman or Google.

They want ownership.

First wave was startups. Next wave will be acquisitions.

Here’s why buying businesses is the new gold rush:

Building = years with no profit.
Buying = cashflow from day one.

When you buy a business, you're not gambling on potential.

You're getting proven profits, existing customers, and someone else's 10,000 hours of work... Made yours overnight.

The best targets? Boring businesses nobody talks about at parties.

Laundromats. Property management. Plumbing. HVAC.

They're not sexy, but they've been making people rich for decades while trendy startups (like your WeWork’s) incinerate cash.