How to Own 20% of Multiple SMBs

She's one of the people.

I'm thinking, yeah, she's doing like a very similar model. We talked for an hour this morning and it's eerily creepy how similar our models are given we've never talked and live in totally different places in the world. Like it's like down to like the detail of like why we do this thing and like this aspect of it.

Well, hold on, Evan, but is it longer than. Let's compare it to just the path of buying your own business. Is it a longer path than just buying your own business?

I think so, yeah. Because if I wanted to buy a, if I wanted to go buy a 2 million EBITDA business today for 8 million, just use easy numbers. Like my after debt service on like a 2.0 DSCR could be a million bucks. Right. So if I could buy that within 12 months, by month 13, I have a business that can make me a million a year.

And that's simplified now. There's taxes and cash reserves and capex and all that stuff. But you could get there.

Well, but, but Evan, I got to push back on that because finding a 2 million dollar EBITDA business and buying it that you can buy for 4x, that's really high quality in 12 months. I don't think I've had a guest be able to do that.

So I have friends who have done that. So it's possible. But no, you're right, it's, it's not easy. But if I'm going after million plus businesses anyway, like those take the same amount of time like buying even if you do like a million EBITDA business, if you buy that in year one and I buy one of those in year one, cool.

I have 20% of it. You have a big chunk of it. Like I have to go do five more of the or four more of those to stack up to the same cash flow effectively. So it is quicker in that sense of I have to find five of those really good businesses and get them all closed.

And the time it takes you to find one and get it closed if you just do it as like 100 owner. So it's slower in that sense. But I think it's better long term because of one, lifestyle like I'm not operating at these businesses.

Two, risk profile diversification, no PG stuff like that. And I mean I just again I enjoy searching more than I enjoy operating. So it makes sense for me personally.

I'm not saying it's good for everybody. It's a ton of work up front. It's like I, I spend to your point at the beginning about like I'm a nomad, but doesn't mean I sit on the beach.