BiggerPockets Real Estate Podcast

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614: The Cash-Flow Boosting Businesses that Savvy Real Estate Investors Own w/Codie Sanchez

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May 26, 2022

Guest

Codie Sanchez

Codie Sanchez, an experienced investor known for acquiring cash-flowing businesses, shares her insights on the parallels between real estate and business investments. She highlights the importance of understanding asset valuation and cash flow, emphasizing how savvy real estate investors can also profit from buying undervalued businesses. Codie categorizes which types of businesses can maximize cash flow while minimizing expenses. Listeners learn about strategic acquisitions, micro private equity, and using technology to enhance revenue—turning their investments into flourishing ventures.

01:20:49

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ADVICE

Buy Profitable, Not Fixer-Uppers

Buy an established, profitable business, not a fixer-upper, for your first deal.
There are many good businesses available, so avoid turnarounds initially.

insights

INSIGHT

Business vs. Real Estate Sales

Only 1 in 12 publicly listed US businesses sells annually.
This contrasts sharply with real estate, highlighting more opportunities.

insights

INSIGHT

Baby Boomer Business Opportunity

Many baby boomers own businesses and are nearing retirement.
This presents a huge opportunity to acquire established businesses.

Get the Snipd Podcast app to discover more snips from this episode

Navigating Cash Flow Challenges

01:42 • 3min

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Identifying Investment Opportunities: Quick Tips and Sponsor Insights

04:51 • 3min

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Micro Private Equity: Strategies and Insights

07:49 • 25min

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Understanding DISC and Team Dynamics

33:18 • 5min

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Strategic Approaches to Business Acquisition and Problem-Solving

38:18 • 4min

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Strategic Acquisitions in Real Estate

42:09 • 17min

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SaaS Acquisition Insights

58:50 • 17min

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Navigating Social Media Fame

01:15:28 • 7min

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Knowing how to buy a business is a lot like knowing how to buy a rental property. First, you’ll need to know the price of the asset, then the cash flow, followed by expenses, and finally the structure. Because buying real estate is perceived as “simpler” than buying a business, most investors decide to go the real estate route—but they could be missing out. Codie Sanchez saw this opportunity when she was working in venture capital and decided to try out the business buying route herself, just on a smaller scale.

Codie can be perceived as your classic “value-add” investor, which much of the real estate investing community can relate to. She finds a business that has a strong foundation but lacks the tech or marketing to grow faster or increase its profits. When a business has a strong underlying value, just like a rental property, it’s easier than most people think to “renovate” it into something that will sell for far higher.

Codie stresses that buying businesses isn’t so different from buying real estate. She also categorizes which businesses real estate investors should buy if they’re looking to maximize their cash flow and minimize their expenses. With some help from Codie, you could be relying on much more than just rent checks soon!

In This Episode We Cover

What a “value-add business” looks like and how to find undervalued businesses

Evaluating and analyzing a business purchase and which key metrics to calculate before making an offer

Buying off-market businesses and why most business owners never consider selling (until you ask)

The three questions every investor MUST ask before buying a business

Buying instead of building and how trying to build a business can cost you much more than just money

Becoming the business owner, not the operator, and outsourcing everything you can

And So Much More!

Links from the Show

BiggerPockets Youtube Channel

BiggerPockets Forums

BiggerPockets Pro Membership

BiggerPockets Bookstore

BiggerPockets Bootcamps

BiggerPockets Podcast

David’s YouTube Channel

Hear Codie’s Interview on The BiggerPockets Business Podcast

How to Use the DISC Profile to Communicate Effectively in Business

“Contrarian Thinking” Newsletter

Quiet Light

BizBuySell

Empire Flippers

Connect with David:

David’s Instagram

David’s BiggerPockets Profile

Connect with Rob:

Rob's BiggerPockets Profile

Connect with Codie:

Codie's Twitter

Codie's Instagram

Codie's TikTok

Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-614

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