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 Youtube

Rob's Instagram

Rob's TikTok

Rob's Twitter

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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The Daily Detail for 7.16.24