Making $100K/Year by Buying Businesses “No One Wants”

Episode #980
Episode Show Notes: link.chtbl.com/BPRE
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Today’s guest makes up to $100,000 per year, PER investment, by buying businesses. Yep, you heard that right. We’re not talking about a few hundred bucks a month in cash flow like most rental properties get you. Instead, you can make a living by buying a business “no one wants,” which is exactly what Matt DeBoth is doing.
Matt saw the writing on the wall after building up a sizable real estate portfolio. Low interest rates flooded buyers into the housing market, putting those with properties to sell in a great position. So, Matt sold many of his rental properties and wondered where he should put the money into. Over the next year, he spent his days researching businesses to buy, talking to business brokers, and eventually landed on a local pizza franchise. Matt was able to turn it around, and after months of hard work, he’s collecting serious cash flow from a business that only takes a few hours a week to manage!
If you want to buy yourself a six-figure income stream and feel like now is the perfect time to take a pause from real estate investing, Matt’s story may be just what you need to get started. He shares how much it costs to buy a small business, how to manage it, what to look for in business investment opportunities, and what you can do TODAY to get started!
00:00 Intro
01:34 Buying When No One Else Would
04:02 House Hacking an Apartment?
06:09 Selling Off His Rentals?!
13:06 Ditching Rentals to Buy Businesses
15:32 Buying His First Business
17:45 Finding Investment Opportunities
21:07 $100K/Year Income Streams?
24:55 Managing the Businesses
28:28 Who Should Buy Businesses?
30:58 How to Get Started

[@Narxist]

This is a great new direction for Biggerpockets. I would like to hear other uses for my dry powder while i wait for the RE market adjusts.

[@poonekar]

This is not new, but the beauty is its simplicity ... when RE opportunities are easier to find, I purchase rentals and other years I just let my cash flow into the stock market. Over the last 20+ years, on average I have 2/3rds of my net worth in RE for the low volatility and tax benefits and 1/3rd in the stock market for the high returns on liquidity. Also in most years, one outperforms the other but since I have both, my overall portfolio has more consistent returns.

[@gisellmorales5007]

Loved this episode, thanks!! What I have learned in the Real Estate business appliess to any and all businesses. I am always thinking about doing something else besides 0:05 collecting rents, which is amazing by the way (!!!). I am starting by opening my mind to different options and I think it is great to have this in Bigger Pockets!! Thanks!!

[@charleskaufman594]

In retail business, the business usually rents the space instead of putting out the cash to own the property. If they own the property then they are tying up the cash in the property at maybe a 5% or 6% return. Instead use this same cash to purchase more of your businesses inventory and sale at a 60% or more return.

[@charleskaufman594]

Sounds like Matt doesn’t know what business he wants to be in, but multiple are good but make sure you are the best in one before moving to the next. Multifamily CF is not just fixed based on unit rent, the unit is the multiplier, if you want more CF then you invest in more units “scale” like any other business.

[@melissagreen9137]

Yeah businesses with labor involved is the safest right now.

[@phil1954]

Matt use the word "we" a lot even though he said these were his businesses. Would love to know his partnership structure.

[@Frommilitarytomillionaire]

He means his team/employees - he hasn't partnered or done syndications

[@davidchappelle9135]

This was a great episode!

[@zeekflash6924]

Did he mention , what franchises he bought and what market ?

[@chicago9458]

The same thing is true in real estate…… blah blah running a business. Oh the same thing is true in real estate…… blah blah running a business … The same thing is true in real estate…… blah blah running a business . He’s explaining it’s not the SAME!!

[@kamilahowens5291]

So you must know your numbers. The numbers have to make sense. Got it.

[@petninja6320]

Cant stress the simplicity enough tbh

[@Cashflowsavage]

Good info I’m in Denver and numbers don’t make sense people are justifying numbers by saying you are buying future cash flow. I’m stacking paper as fast as I can have my eyes on commercial properties as the next opportunity

[@vladimirnaumovski987]

What type of commercial-real-estate you are considering?

[@pjsromproom9378]

Talk to a lender because this is actually horrible information

[@pjsromproom9378]

So, I have been told by several banks that you CANNOT do an OWC when you have a mortgage. It's not a thing, I smell BS....

[@javiers.3433]

What is OWS ???? Pardon the dumb question…really.

[@that9blife465]

VA loan may be different.

[@pjsromproom9378]

@@that9blife465 definitely NOT possible with a VA loan. Talk to a lender, this episode is even more misleading and full of disinformation than usual.

[@pjsromproom9378]

@@javiers.3433 OWC = Owner will carry or Seller financing.

[@brianarc2]

Have you qsked portfolio lenders? Are you talking specifically, about SBA loans? My family just sold their business with a mixture of SBA loan and seller financing.

[@juanmercado3931]

This episode was all BS

[@bravedream]

Too risky under current macroeconomic conditions. He entered the right time but should be careful. Downturn is coming