Zero-Down Codie Sanchez Laundromat Deals- Assets or Liabilities?
HTML-код
- Опубликовано: 27 июл 2024
- Learn how to buy an already-successful and profitable business even in the covid-recession
www.BusinessBuyerAdvantage.com
Book a call with me at www.CallDavidBarnett.com
Join me on Twitter: / dbarnettmoncton
Books can be found in my Amazon store: www.amazon.com/shop/davidbarnett
Stop missing my new videos. Join my email list here: www.DavidCBarnettList.com
This week, we take a look at how Codie Sanchez promotes her laundromat deals with a skeptical eye…
Easy peasy, even if you’re broke.
Codie will tell you how she can help you buy a business that will make you rich, but will it really?
Watch what I think of her laundromat deal here: • Zero-Down Codie Sanche...
Videos mentioned this week:
Codie’s Video that I analyzed: • Video
Warren Buffet & David Duel over Depreciation: • Warren Buffet & David ...
Why SDE is NOT Cash Flow: • Why SDE is NOT Cash Fl...
Dead Capital in a Business and Buying a Job: • Dead Capital in a Busi...
Buy a Business with no Money?: • Buy a Business with No...
See all the $0Down videos here: www.investlocalbook.com/p/buy...
Want to look dangerous like David? Jeff Alpaugh Customs has a special offer for you: www.JeffAlpaugh.com/DCB10
Hey there - thanks for this video breakdown. Couple items: This is useful to see actually very detailed but given you have assumptions inherent a few are off. Although I see why a short video can lead you to them so no worries! So here's what's wrong. Not in NY in Arizona for all laundromats, the management labor was already included in costs therefore you can remove the labor charge as there was an additional level, the machines were actually quite new and these machines do typically last 10-20 years not 8-10. Especially in a place like Arizona (no rust issues, water that doesn’t corrode etc). $25k raised w/ no interest just equity in the deal so that payment wasn’t included and I included the % in the final cashflow numbers for the loan. They were paid back upon sale when we sold for more. This laundromat also - was not run very efficiently so some upside. For instance no auto payment options, no soap dispensers, no vending machines, shortened hours, no automated security etc etc. Now here's what I would have actually highlighted if we did a longer video (like we do in our blogs where we break it down more), we renegotiated the lease (as utilities and rent are your biggest expenses) by extending we were able to decrease which was big for total revenue. Thanks!
Thanks Codie. Yes- I made a whole bunch of assumptions. True. I tried to note those as I went through the items. Thanks for watching. Don't forget to hit 'Subscribe.'
Hey codie just suggestion. Big fan here - I absolutely love your stuff, but I’m stuck just like the rest of these people that found this video sniffing around for the lame financial stuff. I would like to suggest that you do an official financial breakdown at the end of your videos (similar to how Andrei Jhik or Graham Stephan does) in the future so dudes like David (no offense your stuff is great too) wouldn’t need to follow up with assumptions that you end up having to correct anyways. Lol
@@hdollx I feel like I agree. I'm a Codie fan also, but it's this "devil in the details" stuff where most non-finance experts get scared away from committing to the deals. Now, to be 100% fair to Codie - I have heard her say multiple times to do your research, and study this stuff before getting started. I think I literally heard her say something like: "go take 9 months and become an expert at all the terms, conditions, deal stuctures etc. and then buy your first business" in one of her podcast interviews. She also recommends that people start within their industry (an account buying an accounting firm) and to start small (not buying a multimillion dollar deal) as your first deal.
Having said that, I really appreciate David making this video, because he did make me realize that it's not all moonshine and roses out there, and it was good to see visually how quickly a seemingly good deal can go south if the numbers aren't properly looked at.
Finally, I still credit Codie for getting me to even think in this direction. I still think she's been a net good for society.
@@DavidCBarnett The math seems off to me. Please let me know if you disagree. SDE's starting point is net income, which already includes depreciation and amortization, and then typically you add owner's salary and benefits, personal expenses, etc. to get to SDE. But you seem to have included Depreciation expense again in Cell Z6 EBITDA cashflow (also depreciation is not a cash item) and then again in cell Z13 Real Earnings. That depreciation expense is basically counted 3 times, once in SDE and once in Cell Z6 and once in Cell Z13.
I bought her course $1500 🤦🏻♀️but I thank her for getting me interested in “Boring businesses”. I also knew it couldn’t as simple as she portrayed and there is always a marketing play 😉 I love your videos and thank you for dissecting these business deals because the numbers are what’s real in all this and it’s so risky if the numbers are wrong! Unfortunately, it seems that many sellers (purposely?) use incorrect terminology and often leave out expenses that should be included. Thank you for helping me learn how to navigate this next step! I want to buy a business, not a job 😊
Remember, most business owners are NOT experts at selling businesses. You often need to pry the information out of them via questions to be able to build a true picture of what's going on in many SMEs.
I was actually thinking of spending the $1500 on her course as well. I am lucky that I found this video.
I was one click away from completing the purchase of Codies course and decided to research some other similar courses and compare just to make sure it was worth it. I looked at some that were total garbage and figured Codie was the one and came back but stopped again. $1500 Just didn't feel right.
Then came upon Davids channel and went through his website pitch and did some background research on him and all i could find were lots of 5 star reviews from very accomplished professionals as well as beginners. Saw his price for the course and what was in it and it looks like a no brainer to spend a third of the cost for essentially the same information i'm guessing.
So may i ask you how you felt after taking Codies course before watching this video? Did you feel like you got your moneys worth? Was the material in depth and useful? I watched a lot of Codies videos and listened to many of her interviews and her speaking engagements. I think she is sincere in her intentions to provide the best value for her followers. Maybe I'm wrong. Obviously i do understand that she is an aggressive marketer and charging way too much for her material and staging some hype along with pushing her $8k prices tag master mind group. But do you really think she is a complete phony?
Codie has a huge network of "affiliates" in all over the social media. They attend each other's shows, tweet about how clever they are all they long. It is no surprise many people, including myself, got on the hook of buying a business thanks to her. And apparently some of us got unlucky and "invested" her content before RUclips thrown David in their screens. Thanks David. And RUclips.
@@bionicerkin I would be very interested to know what people got for there $1500. Is there any value there or are most unhappy with their purchase?
Dave mom would be proud of you. Codie is actually a marketer so generating hype is how she sells her products. But we need people like you Dave would make the numbers speak. And this is a very good breakdown of how not to get scammed. Thanks Dave for being a beacon of light.
Thank you Marquin. I really appreciate your words.
@@DavidCBarnettmom? I didn't know david was black. Is this true? Marquine can you elaborate on yalls relationship?
David, I look at many videos to increase my business IQ, But many of the online people always talk about the aesthetics of buying a business but none get into the weeds like you do.
Even to the fact that you went into the details of the other person's agenda is the reason, why I love your content, it may not be as entertaining but it's effective.
I will see you soon.
Thanks 60, effective is something I aspire to.
Thank you for this video. Codie is actually how I found you David since I thought what she was saying was too good to be true and wanted a second opinion. Working through your books now, will likely book a phone call in the next year or so.
I'm going to add her in my org. chart as an audience recruitment specialist!
Amith, you've got a bright future ahead of you. Good for you, for stepping back and asking why it sounded too good 👍
Also how I found him. I’m always weary of hype men. It’s fine to get the ball rolling but there’s always negatives and everything and if you’re not telling me about them how can I trust you
I also have been following Codie and then RUclips algorithm suggested one of your videos. Love your honesty and logical explanations.
The difference between David's and Codie's approaches to the same deal is the difference between an adults and a child's approach. And probably a child who's job is to trick other children. Thanks David for this eye opening video. You are the one to go in SME buy/sell space.
David,. I have done at least 16 deals in the last few years with no money down. There are certain industries you can accomplish it in, I do it all the time. I agree, Codie is doing it for clicks and this is a bad job, not a business. What I notice in the businesses I acquire is people are doing a poor job of managing them, they are antiquated, there is little or no technology plus they rarely increase prices. We acquire a lot of businesses we update the technology, increase prices, clean out the bad clients and grow. There are a lot of good businesses out there for no money down.
Hi EPL. Great comments. I've never said that you can't do a 'no-money' deal. I say it's very unlikely that a broke person can pull it off or should if they had the opportunity. I've seen lots of deals for businesses like you describe sell for less than the tangible asset value. Turnaround stories.
Eeeeeee.... David made you look STUPID bro. 👀 . You're just gna let him make you look stupid like that and not respond??
Where? I've been looking hard. I'm a vet with an 800 credit score and 250k cash in hand and I haven't seen hardly any business listings that looks legit. The few leads we've followed over the last year all ended up being bs. Cooked books, separate books, hidden debts, pending regulations changes they're avoiding, etc.
Where are these great businesses that just need a little tlc?
@@damiontorrez438 business listings!! Exactly, you can not use brokers or on line listing. Most if not all of them are worthless.
@@DavidCBarnett David you have no idea what business I am in, so why would you make a statement about something you do not know. .All I said was I have done a lot of no money, no out of pocket deals and built a very successful company. In most cases you are correct but there are many businesses you can do this in.. I just did 3 more deals in the last few months and I have two more for next year. All of the businesses are extremely profitable. There are a lot of very old people that want to get out of businesses, that do not know how.
Subscribed!!
Great content. Really appreciate your effort to educate and debunk!!
Wow! Thank you, Glad you like my content.
David, thank you for yet another excellent video. While I appreciate the steady diet of entertainment-driven videos in the business sector that RUclips feeds me, no one rolls up their sleeves and gets down in the details as effectively as you do. In the midst of the siren calls of all of the get-rich-quick/no-money-down content out there, you are consistently a voice of reason. I've learned so much from each of your videos and, undoubtedly, you've enriched the lives of everyone who has turned to you for guidance and the sobering truth and translated your guidance into action (or pumped the brakes when tempted by a bad deal that you uncovered). Thank you for this.
Thank you. Awesome feedback like this keeps me going!
Thank you David! This was the exact example I had in mind during our conversation it’s really easy to make a business look good when you’re only using 4 metrics
Glad I was able to help.
Very insightful, love the detail!
Thanks
I was almost snared in the course trap, thanks for a great video. I have a lot of your content to get through. I still think Codie is brilliant, and she opened my eyes to small business acquisition, but I question just how much I can learn from her that I couldn’t learn from free videos like yours on YT.
Welcome aboard!
Thanks David. The video by Codie is entertaining and definitely stirring people to think outside the box. It has meant I am now looking at businesses and analyze them thoroughly. I learnt after losing money with some other courses, to take videos on RUclips with a grain of salt and not do deals I don’t understand properly. There is no free lunch and due diligence is very important. I am glad despite your mum’s advice, you are challenging misleading advice. We do not need more people losing their money doing desperate measures. Codie is a finance professional, she needs to manage her reputation and provide examples of deals that make sense.
Thanks, I agree.
Great video David. Thanks for taking the time to debug this video (and the many others) that are in my youtube feed.
Glad it was helpful!
David I’ve been all over google trying to learn how to acquire smb’s now that I leveled up over the years working my a$$ off and I have been getting all of Cody’s videos in my social media because of it. Thank you for shedding some much need light on this video (I watched hers of course). I bought and downloaded your books previously and will keep you in my radar in the future. We need your channel to blow up.
Thanks Jon! Click the like button. I think that helps.
Thank you fo making this video!!
Glad it was helpful!
Outstanding David, thank you.
Glad you enjoyed it
Amazing in-depth analysis, thank you very much for this.
My pleasure!
David you're looking better than ever man keep up the great work!!
Thanks. Feeling better than I ever thought heading toward my 47th B'day. Cheers.
Thank you for educating me on these deals. I've been recently interested in improving my business finance literacy, especially when it comes to acquisitions. You're providing a valuable insight into helping me learn and understand the details and terminology behind these deals. Thank you, again.
Thanks Bruce, I appreciate it.
Hey David, thanks a ton for making this video. This is exactly what I needed! I've followed Codie Sanchez for a long time and I've been trying to understand the breakdown of it all with no luck. She spends more time selling the boring businesses idea than the actual business in most of her videos. This is super helpful. Can't wait to go through all your other videos.
You're very welcome! Glad to have you over here.
She's just marketing her courses, mastermind, or affiliate services.
Thanks for the breakdown. Keep in mind though that the SDE calculation always includes labor costs. It just doesn't include any salary that the owner takes. If the owner was the only labor then an assumption for typical labor costs is subtracted to get the final SDE number.
David, thank you for sharing your insights and expertise on laundromat deals and acquisitions.
Our industry has gained a lot of attention online lately.
Indeed Waleed. Thanks for watching.
Happy you made the video
Happy you found it.
Wow David 🙏🏽 ! Thank you for this breakdown of this business/video.
I sold on getting your course and coaching
Glad it was helpful!
Thank you for your videos. I've been looking for videos on how to evaluate a business since I'm recently retired and am looking to purchase. I came across Codie and felt she had some good pointers to share, but she made it seem like it is so easy to get an SBA loan. She also continued to say Small Business Association instead of Administration, which made me wonder if she's ever had any SBA loans before. Your videos however are very detailed and informative. I am glad I found your videos and look forward to reading your books.
Welcome to the crew chiefdavila!
Dammit. The magical fairies, thing!?? Talk about spoiling my plans!! I was relying on those things!
I have one here for sale! Please send $1997 cash in a brown envellope to my house. I'll send the fairy on the next flight.
David, think you for making this video. Like, Amith Reddy, I too have watched Codie's video and am actually analyzing a Laundromat in Houston. The seller is refusing an SBA loan which was a puzzling stipulation, and lo and behold, you explained the reason behind that in this video. Thank you for the helpful content.
Laundromats can also have undeclared revenue issues... there's that sometimes too. SBA likes to see what the tax returns say.
Great deal breakdown
Thanks Brennan
I've built several businesses...they ALWAYS have expenses that are unforeseen. The laundromat business is basically machines constantly breaking down or depreciating and constantly marketing to get new business.
Well said.
Excellent analysis. It didn't pass the sniff test and basic maths for me; but it was great to see the extra points I missed. I didn't pick up on the obvious point that her video was not on location!
Yeah, I quickly counted the machines in the background and realized that if each one did a few loads/day it would be a much bigger business than the deal featured.
I found codie's videos and it got me interested being a business owner....the message i got from her was it's less risky to buy a business that's already doing well....then i found your video and i'm SO GLAD i did...i had a feeling it sounded too good to be true...i appreciate your frankness ....my next step to focus on is lower my debt, get my score back up, then i'll look into a business acquisition ...maybe ice machines for a hands off approach for the first go?
Glad to have you in my audience Jimmy. There is a new video out today about how to decide what kind of business to pursue. Yes- Build your personal/financial foundation first.
Sheesh, this was hard to watch. Codie seems so likeable and no doubt her content is enticing, so seeing one of her "deals" torn to shreds is quite interesting. Anyhow, thanks for sharing some insight on what proper financial performance due diligence actually looks like.
Maybe for your next video you should have a graphic artist flash all your numbers on the screen in bright neon so you can get crazy video views too haha.
Cheers!
I think it's the difference between education and entertainment. It's fun and exciting to watch her videos, I admit that. Maybe I'll get some sound effects. hmmm.
Very good video! It's great to have an expert dissect/analyze another expert's claim. Please do more of this type of video.
I'd love to. Thanks for taking the time to let us know you enjoyed it.
Your analysis is extremely pertinent
Thanks
Good take on this! You can always spot individuals who are in the trenches, as there are some who sell the dream but don't fully disclose the nightmares. You also have to mention the working capital aspect, this business probably needs $10-15k in liquid funds. I think we will enter the golden era of a buyers market for solid businesses. With the baby boomers looking to retire, they will flood the market. Many of these owners don't know how to sell their business or have a succession plan. You will see many seller-financed deals, but the challenge is that people think owning a business is easy and passive.
I'm not so sure about a buyer's market. Many of those Boomer businesses are not worth owning. I'm seeing more and more like I describe in this video: ruclips.net/video/uCSTCS2z3tk/видео.html
You are amazing thank you!
You're so welcome!
David I'm an 18 year old looking to jump into SMB M&A intelligently and content like this is EXACTLY what I need. Keep the rational analysis coming you're doing god's work.
Thanks man.
Wow! The fact that you are 18 and looking at this tells me you are destined for something great. Stay on the education trail as that is the best investment.
Subscribed!
Thanks Lewis.
Thank you for your video - just saved me from a big mistake. Will subscribe to you and start watching your videos
Welcome aboard!
Same, David is far more pragmatic. Not as glamorous, but this keeps me from losing my shirt!
Thank you for your perspective. I have been following Codie for awhile now.i would love to see you guys have a discussion about acquiring small/ boring to medium size businesses.
Sure, ask her to invite me to her channel. I'd love to go.
You've got my subscribe. Thanks for valuable content. I've been watching Codie Sanchez and she is indeed, a phenomenal presenter...but they are indeed all hype and with no real breakdown of the mechanics. I think if I need a quick boost of feel good "pep" she's someone to go to, but for real value and content, you are definitely a gem. I'll be watching more of your vids. Thanks David!
Thanks Bora. Welcome.
David. It was Codie’s videos that led me to your channel. Her encouragement to motivate people to buy boring businesses is intriguing. However, she’s more headlines than fine print, and the numbers she throws out there lack any context nor do they add up. I appreciate your videos and just downloaded your book, 21 Stupid Things People Do When Trying To Buy a Business. You’re my go-to-person now for advice. I plan to buy a business within the next 6-9 months and I will be reaching out to you at that time. Thanks!
Thanks M. Looking forward to speaking with you. See my services for buyers at www.BusinessBuyerAdvantage.com Cheers.
You just crushed my dream :-( I was the EXACT person who needed to hear this
Protect this man at all cost
You think I need a bodyguard?
@@DavidCBarnett the fake guru industry is too lucrative. You're out here killing their golden goose. Thanks for all that you do btw🙏🙏.
Great video, thank you. I was concerned by Codie's cheerleading persona; and her numbers seemed superficial. Appreciate you doing an in depth analysis. Glad the algorithm brought me to you!
You're very welcome Steve!
Please make more videos like this because it saves us from being mislead. The truth is on your side.
The subject was suggested by an audience member. If you come across something like this just send it to me and I'll consider it for a video.
Liked 👍 Thanks
Great investigation work analysis 👏
No money deals are sometimes sketchy after looking under the hood
Lol nice paint job but engine shot
Thanks again
Thanks Owen
Thank you
You're welcome
Hey David, Great info. Just an FYI, the "nice" laundromat Codie is in is called "Riverside Washateria" located in Austin and is owned by The Folde. Interesting she is using footage from what appears to be an interview with the owner of The Folde.
Thanks Jordan. It just shows that this is a 'show.' It's all about production and entertainment.
I watched Codie's video and got interested in small businesses. And I'm glad I wasn't naive enough to just believe everything these gurus say. Thanks for the knowledge, will sub!!
Thanks Ant!
Thanx David. This is an eye opening video. I was almost to do the payment for the full Course Which is over $8000. She is not alone on the show off business videos. There are many who are doing this just to sell their courses. We are always blinded by how they sweeten the videos. We need to wake up.
Yes, it's best to get advice from people with experience and very little esthetic sense. Like someone who might actually build a blog using a free tool like Blogger. Ahem, just saying... www.DavidCBarnett.com
@@DavidCBarnett haha “just saying cough here’s my link”…love it! you deserve a lot more attention and following, you’re way more legit and not all smoke and mirrors like this Codie girl is. I happened to run into her content for the first time yesterday and was horrified at how many people are super into her version or narrative of “becoming a millionaire”…except for one problem, it’s not real, she has lied about most everything she’s done in the past (she was NOT an investment banker for Goldman, she was some lowest-level-tier sales associate and even that was for a year and some change…on her resume she wrote 7 years which someone called her out publicly on Twitter and she replied saying it was a typo….riiiight a typo on a document she shares at every platform every conference every public speaking gig crap she’s ever participated in)…Anyhoos you’re the real deal and I hope more people find to your page and refer to you when considering making all these big biz deals/decisions/investments…that is their hard earned cash and it’s frustrating to watch some online grifter aka conman (or woman!) convincing them to buy their snake oil courses for 10k each and carelessly selling the idea of “easy hustle get rich quick” to these people making them take out loans for a hundred grand making deals and buying businesses without a single clue how they operate them and most importantly whether they’ll ever even be profitable…
Keep up the good work and keep exposing these grifters by sharing the REAL analysis behind their glammed up make-believe version
Thank you for this video, I was so excited to start buying business following her advice and quickly learned the way she lays out the deals - numbers don't add up.
Glad it was helpful!
David thank you for all the details you provided. Many of us are looking for ways to make extra money on the side and possibly strike out on our own. It’s hard to believe that people are still selling snake oil in this age of the internet. I don’t have the financial knowledge or the time to get to the details you provided. Many many thanks God Bless you 🙏
Glad to be of service.
Codie is a trailblazer, I have watched many of her videos and was not even aware she was selling a course! I love to listen to her, I love her enthusiasm! I must admit I was not looking for a course to buy, I would never buy a course on how to buy anything! With all the free information available online! No way! Not to mention if you don't already have what it takes to do your due diligence, or have what it takes to work your a** off to build a business that you are planning to buy for no money down! I'm sorry but I think you should stick to your 9 to 5. With that said I really enjoyed this video it's a perfect example of what I said in this rant, it was free and it was very informative! My advice is to listen to all the free information you can and take all the resonating information you gather from all that and apply it to the business you're thinking about buying!
Yes, check out the rest of this channel for more informative videos. Cheers
26:06 in 2023 Codie’s course is now $8k for the chosen few (scarcity) and her channel now has over 830k subscribers.
Glad I found your channel after I went down the C.S. rabbit hole.
She is good at marketing, that's for sure.
Love David ❤️ he's a great hustler 💪 👏 👍
Thanks Nonny
Do not be naive - what a lot of celeb course creators in this space don't tell you is that YOU WILL BE OPERATING THE BUSINESS until you have a solid, trust-worthy person to do it - and it's not a 9-5, it's more like 14+ hour days, especially if you have to clean up the mess and install new training and systems.
Don't you know? Business owners only work half days.....
It's up to you to decide which 12 hours that will be... every. single. day.
;)
This was just what I needed to see. And Codie actually replied to you! You might want to update your description to say that she responded. I think the issue here is that she buys businesses to grow then sell them quickly, not to keep them. I don't think that's clear in all her marketing, it seems like she wants to buy then keep tons of these businesses, and encourages others to do so, when the real money she makes is from buy->build->resell. What I don't get is how she supposedly has $55 million net worth but is buying such a tiny business. Also I noticed that you responded to every single (politically correct) comment for your video. Shows that you really care about your viewers.
I came across Codie via Linkedin and happened to jump on a webinar a few days ago that her and her partner at Unconventional Acquisitions put on for their Mastermind program. Information was interesting and enticing until the end (the hook). Cost of the program if you buy now was $6k (that was with a 1k off if you buy today). Thanks for your real life approach David
You should attend the bossup conference later this month, you'd really enjoy it. hopin.com/events/bossup-virtual-micro-m-a-conference
@@DavidCBarnett Thanks David. Registered.
Commenting again today. I like Codie's content, and most of it isn't wrong. It's just missing detail. Someone could potentially be successful in her program but it's a lot for someone to take on who isn't sure if they can do it, or if to your point they are broke. I especially like how she talks about how folks who are truely rich do it quietly. They don't actually want folks having the knowledge they have to keep it at an elite few. Your like the grounding force that keeps her content in check. Thanks!
Thank you.
I thank Codie for getting me interested in alternative forms of businesses as an alternative working for a company, and also for discovering your channel 🙏 I'm still getting my head around your terms but will be doing a deeper diver on your channel to learn.
Codie probably gets her income from her youtube views and sponsorships in adddition to her courses.
Likely, yes, there are a lot of views there.
As you’re alluding to, depreciation isn’t gradual. Machines break at the most inconvenient times and cost more than expected. These businesses need considerable money available unexpected costs.
To be honest, I do enjoy Codie’s videos and they attracted me here.
True about the machines. Several others have commented that she's helping to grow my channel as well. Glad to see you here Ben.
Just watched Mr. Garnett’s video and just wanted to say thank you. I have been investigating Miss Sanchez as a potential business opportunity with her advice and now see that she has willfully mislead people who are just looking to improve their lot in life.
Thanks for the comment. Glad I could help
Codie has taken her video down. I discovered David last week, and Codie a few days afterwards. I've binged watch David's content, and plan to sign up for the courses. I was looking for alternate opinion to David's, (checks and balances). It would appear, I need to keep looking. Keep up the awesome real world content David. You'll be bigger than everyone soon.
No way. I'm always in a calorie deficit. I'll be thinner than everyone soon. ;)
@@DavidCBarnett lol, fantastic! I've been watching your previous videos in your courses and you have dropped at least 50lbs.
Seems like the money she looses on the laundry business comes back in from selling courses. Always be suspicious if a deal sounds too good to be true and involves you buying a course :D
Good analysis. There is a guy in the UK who's made tons of money off selling courses and he purportes to be a big daycare investor. The whole chain of daycares just went under. I'll be bringing you all that story as it unfolds.
@@DavidCBarnett I also wonder how one runs such an investment business and finds time to produce quality youtube content. Seems like youtube comes first and the "investment" ist only the content. There is a guy doing the same with real estate. he makes 10 k a month with real estate and 70k from youtube :D
Codie is mostly hype she gets you excited but completely sweeps aside the risk that you incur
I can see why you say this.
David,
This is a good analysis, but my only thought is that it appears to me like it's at least possible that a portion of the expenses are double counted in here.
Reason I think this is possible is because at 5:30 in her video, it's simply broken down into "revenues" and "profit" but at 3:55 it's lined up as you have it "bills" and "expenses". Those are two very different things.
~45k in "bills" and "expenses" from her balance sheet seems like an awful lot for such a small laundromat to not include some of these expenses you've listed, such as maintenance. We don't actually have a great idea what's included there. Expenses she lists at ~7k could be labor (doesn't take long to change quarters in such a small laundromat), and "bills" could include maintenance.
And additionally as you know, depreciation is a non-cash expense, so depending on equipment age, jumping from cashflow to real earnings like that is certainly a fair way to present the data, because people at home don't think about that stuff, but it also may not tell the whole story if the machines are all, lets say, two years old.
If these are double counted, and the machines are two years old, if she cashflows this for two or three years and bought four more and had one manager run them all, it would cashflow enough to make it all make sense, although I'm certainly in agreeance with you that this isn't some sort of unicorn deal.
Anyway, good analysis, just an alternate "devils advocate" hypothesis.
Could be. I think one of the big takeaways is that this video is about getting people excited and really doesn't offer the level of detail to fully understand what is going on. I also find it intersting that she sold the business shortly after buying it instead of keeping this 'cash cow' and enjoying the cash flow. This makes me think it's not as good as portrayed.
I enjoy how you breakdown the financial aspects of the deal because I think people understand that almost everything works in theory or have worked for 1 person in a specific situation but don’t really understand how the numbers and financial side works as well as other aspects that you breakdown in great detail but my next question would be how do we get access to your spreadsheets so that I can start analyzing and breaking down deals and does your course do a walk through of the process
If you want to improve your skills to break down deals and make cash flow forecasts, I'd recommend the cash flow forecasting program at www.BizPlanSchool.com
Hi David, loved the analysis, i work in the finance industry. If you look at this deal in terms of free cash flow generated by the business then it does make sense( future growth capex for new machines are factored in - which involves again taking on some debt to buy new machines) . The free cash flow generated by her laundry is positive(including labour cost assumptions). I've no idea how she is gonna make the debt repayments maybe refinance everything at the end of the year or take on long term interest only debt because there's no way that 125k in debt can have an amortization period of only 5 years, i think like around 10-12 years repayment would work out in order to have a positive cash flow. Even am under the same conclusion,i think this is like acquiring a job. In the long run when debt is repaid and profits r increasing only then it's going to be a good business.
The problem is the machines are not new. If you tried to amortize the deal over 10 years, you'd still be paying for the old machines when you have to start paying for new ones.
here from the Ali Abdaal comments section (pod in which Codie is featured)
interested in tuning into this to get an alternative (what seems like numbers-driven) perspective
Thanks for coming by!
Oh, perfect! I got into my current research spree looking at buying businesses (ideally with few hours needed, like laundromats) from exactly that Codie Sanchez video! But those videos are not detailed enough on how the deals actually work, and I also noticed that the actual down payment does not seem to actually be $0 in those videos like the title always claims. Now I wonder what an actual good deal on a laundromat looks like, assuming one is willing to do it as a side hustle (I would love to buy a job if it can make me more money without requiring _too_ many extra hours), what the real barrier to entry is in terms of down payment (is $25K realistic or would that only work for actually unprofitable businesses?), and if it would even be worth it compared to other uses of the same money.
The videos always reference $0 down because that's what people are searching. It's all about getting views.
Rule of thumb, in US, you need about 50% of the SDE of the business you'd like to buy in cash, anywhere else about 75%.
Hi David, thank you for putting this video together. I completely agree with your assessment, but I am trying to understand your calculation. One question I had is that you included the Depreciation in EBITDA cash flow and then again to calculate the real earnings, is this an oversight as if feels like it is double counted?
yeah, if you look at other comments it's an error I made. Cash flow is still negative, however so I just left the video up.
@@DavidCBarnett Thank you, completely understand. I just wanted to make sure I understood the math. I really appreciate how you explain the why behind the numbers.
Great video, we need this so everyone doesn’t jump in over their heads, I was on the Codie kool-aid haha
Glad it was helpful!
Facts!!!
Thanks Abdulla
As david rightly says - Buying a profitable business that generates cash flow that you can pay yourself and save takes time and effort (including coming up with money down).
Cheers
"If you have no money, you probably shouldn't be running a business." Just in case you're lured by the siren song of easy money. Thank you sir!
Exactamundo!
So if payments can/could be electronic in some way use of a code bought from a near by vendor maybe the economics can be skewed to the positive and maybe 2nd hand replacement parts or machines could be used as a possibility
I hope everyone knows this already but codie sanchez is an entertainer, book/dream/course seller, media star. Her true income came from those things listed previously and she used that income to venture out into other things. Simply being famous (and attractive in her case) will get you opportunities the rest of the masses never get.
Great comments. People need to think critically of everyone they're influenced by.
Codie Sanchez I watch a lot of her video and she’s good on making you believe what she all said, I reached out to her and asked her if she can coach me how to buy small business with $0 money and she responded to me she will coach me about trading crypto instead because she said to me buying and starting any kind of business actually needs some sort of money to start with and I tell her what about your RUclips videos about buying businesses with $0 money with seller financing and she did not respond 😢thanks for video.
Thanks for this Ferdinand.
Thanks for making this video. I enjoyed you breaking down the REAL deal. Not that Codie is trying to lie on purpose or scam anyone. I understand she's figured out the "Internet Marketing" aspect in order to drive traffic to her vids and program. Nothing wrong with that, but I wish she would go into greater detail in her vids explaining things. I almost bought her $1,500 course because I'm looking to start with a smaller business (non-owner operated). I assumed from her marketing that she was a guru at this. Nothing against her nor am I saying she's fake, but I'm tired of all these fake ass gurus in the "buy a business" space. I don't know who to trust. I LEGIT want to enter this space. I won't lie, I have about 25K to invest into a biz and like another 30K in Corporate Credit Cards. I do not want to touch the CC's. Do you have like a free consultation David? I'd like to check out your products.
My 'free stuff' is this youtube channel. Next would be my book called '21 Stupid Things People do When Trying to buy a business' That's like, $4. on Amazon or you can get the pdf at my blog www.DavidCBarnett.com
If you go to www.BusinessBuyerAdvantage.com you can see an intro vid where I discuss how my services work and you can learn about my online program which is $449. Hope that helps.
@@DavidCBarnett Thanks David. Thanks again. I will definitely buy the book and start there. I might just buy more than one of your books as I want to get educated the RIGHT WAY on how to buy a business. And by "Right Way", I mean REALITY and not like some of these fake pie in the sky promises that some of these YT influencers promote. Happy to see that your course is very reasonably priced. Is it updated for today's economic outlook? That's another thing that I encountered...Courses with old outdated tactics that just don't fly anymore. Because once I devour your books, I will need more. LOL.
thank you- i can't believe i was so naive
It's easy to get caught up in something you want to believe.
Am I wrong to think your EBITDA calculation is not correct?
SDE $67K
Labor $24K
----
EBITDA - $43K
Your point stands although NOI will be 0$, not negative, after depreciation it does go negative.
Yes, I made a mistake but the outcome is the same... bad deal. Some others have also pointed this out... good eye Y.
Yes I've owned laundromats and got burned bad. The equipment is typically just used and abused. The average customer is only spending a few dollars vs other businesses spending much more. Laundromats are not an easy way to go, possibly if you have years working in them, if you don't stay away.
I've met many former owners and they all say it's work. Thanks for your comment.
You would think that in this digital day and time that a coin-operated laundry mat would be considered obsolete 😩
I use a laundry mat that requires customers to load money on to a card that can only be used at that laundry mat.
The machines don't even accept coins at all
Yes, the card systems are better at beating theft, but some owners want to be able to decide how much income they declare and this is why cash systems still exist.
David, should I look at adjusted EBITDA to determine my multiple or am I using that to confirm that the SDE/EBITDA Multiple provided makes sense after debt service?
Different sizes of businesses and different industries multiply different notional cash flow levels. The answer to your question is 'it depends.'
😄😄 WOW. She is just a high earning content creator. This information is probably in her $8,000 course. MAYBE. Thank you for being honest.
Glad it was helpful!
David, is there a way to get the excel file?
How did you get the EBITDA of $29,490? I must have missed that. I assumed you would have subtracted 24k from 67K but that is 43K.
It sounded like the property was part of the overall deal. Is it possible that the discounted purchase price for the property was part of the incentive for this deal?
I didn't get that impression anywhere.
the no money down system works even here in the u.k there are people who sell courses that tell you about buying property with 0 money down
You should check out the stuff here: www.investlocalbook.com/p/buy-business-with-no-money.html The latest video there is about one of those characters in the UK.
Dumb Question David, but how do we know that the labor and depreciation , was not included in the break down from REV to SDE? 3800 a month in operational cost seems to be a lot. I love your channel by the way! I pass your name along as much as I can.
We don't know. The video is full of assumptions as the information provided was not very detailed. BUT- ask a laundry operator what their gas, water and electric consumption is each month and you'll know that these costs can be substantial as the machines use a lot of resources.
I bought a laundromat with no money down Dec/1/21 and now I’m worried I bought a lemon. I also found you through Codie and i was about to start looking for Pool routs. Any recommendations about where to go to value the laundromat?
The businesses are so equipment intensive. A big part of examining these is figuring out the remaining useful life of the machines. You need to know a new machine salesman and someone who does repairs to give you an idea of how long they'll last and what the replacement cost/timeframe might be. Be honest about your time managing it and figure out what the return on investment is. You need to be much higher than any kind of stock market or mutual fund rate of return.
Hey David, do you have any suggestions on how to find a position working with/for someone who buys and optimizes businesses? I’d like to learn and gain experience doing this with someone else while I save capital to eventually do my own businesses. I have a background of 6 years in commercial banking and 1 year in commercial real estate.
I greatly appreciate your videos!
Check out the EOS system as described in the book 'Traction.' What you're describing is making yourself into an 'integrator.' Once you learn the terminology around this, you'll find online communities and people actively looking for integrators. When I was at HoldCoConf2022 in July, the big discussion from multi-operating business owners was all around how to find good integrators.
There's the ball, run with it!
@@DavidCBarnett thank you! I’ll grab the book Traction and make it happen! 🙏🏻
David,
I loved the analysis. I tried following along with all your calculations. The only step I think I’m missing is why your ebitda-cash flow line has depreciation taken out already? Then it seems like you took it subtracted out depreciation again.
I’m trying to figure out why? Is it to back something out in SDE?
SDE is missing labor, EBITDA is missing depreciation.
@@DavidCBarnett Like Jarod, I'm lost on this point. Your EBITDA Cash Flow calculation in cell Z4 deducts labor AND depreciation from SDE You then subtract depreciation again from Net Cash Flow to get Real Earnings. This means you subtracted depreciation expense twice. Am I missing something
Great video Dave! Big red flag that she couldn't even be bothered to dance in her own laundromat.
Very true. Maybe it was too small?
It’s possible to do but it’s also the riskiest way to get in the business.
Yeah, I get a lot of PMs from laundromat owners who are amazed by some of the conversations happening online. Once you own/run one of these you know the reality that this is a tough business like any other.
How could you do this breakdown without balance sheet? How would you know if SDE is after labour and other costs? Thanks!
She told us the value of the equipment. There would be not much else on the balance sheet. She told us the 'profit' was after bills and expenses and said that 'you'd still need to run it and fix things' etc. revealing that there was no labor. Watch her video and listen carefully to everything. I did about 65 times.
@@DavidCBarnett got it!
@@DavidCBarnett Keep in Mind she never mentioned the rents and we all know this biz is paying around 2-4 k a month, the Big Water Bill, The Electric Bill, I dont see how anyone can turn profit on this biz
Did the owner subtract depreciation from the equipment price ?
Hi David, could you please explain how EBITDA cash flow is 29490? Sde - labor seems to be 43000. Could it be that depreciation is counted twice in real earnings?
See the pinned comment, yes, there is an error.
Perhaps, the laundry mat is to off-set taxes??
I don't even know what that means. You mean a person might want to lose money just to save tax? That's not a logical path.