Andrew Prat

@blueprintsmb22 When people say “$1M SDE at 5x” do they mean on TTM or on last years taxes?

Still can't believe the bid for small businesses. Talked to a smart finance guy close to LOI on a $1mm+ SDE business under 5x with tons of hair. Despite putting in a decent equity check with a seller note, the DSCR will still be under 2x. He admits the margin for error is low but finding anything below 6x is hard right now

@Matt_Titan_ EBIT is cash though

Hard truths about private equity that operators need to hear: 1/ "Roll-ups" are not strategy. They're just buying revenue with debt and hoping the synergies show up. 2/ The 100-day plan is a fantasy. The first 100 days are spent figuring out what you actually bought. 3/ Your operating partner has never run a P&L of any size. They were an associate two jobs ago. 4/ EBITDA is not cash. The number you bought on and the number that pays the debt are different numbers. 5/ "Add-backs" are how a $2M EBITDA business gets sold as $4M. Half the industry is built on this. 6/ The portfolio company CEO has a 3-year clock from the day they're hired. Everybody knows it. Nobody says it. 7/ The best PE returns came from buying cheap in the 2010s and riding multiple expansion. That game is over and most firms haven't admitted it yet. Fight me.

@BobbyBizScout What’s one that you WOULD buy again

I've owned businesses in many different industries. Oil, real estate, farming... The only one I'd never buy again is a restaurant. • Margins are brutal • Employees steal from you • Highest turnover of any industry • One of the most operationally complex to run There's a reason they only sell at 1.5 to 3x SDE... at best.

@GenZMultifamily What’s gross rent on these?

Like it or not, this is the ideal first rental property. 4 Units All 2 beds, outdated but great shape Off street parking and good size lot I prefer post 1970 but if it’s got good bones, that's really all that matters. You'll find these everywhere out there, good and bad neighborhoods. Keep it simple. These are the Midwest bread and butter.

@realEstateTrent In my poor college days I didn’t think I had options for that. I didn’t know a lender could come through for me. But hindsight 20/20. I should have bought the great deals with high leverage. Nevertheless the experience laid the groundwork for my future real estate investments

@drawSMBequity if you are able to find great deals then buy then youself no?

“Bring me an offer, I’m not giving you any info” is clown talk

@realEstateTrent Essentially what you’re doing for your fund but I would turn around and mark up the price and sell it to a local investor or flipper Basically an independent acquisitions analyst for-hire Most people think of whole salers as scammy or bottom feeders

@drawSMBequity I’ve never understood what a wholesaler was

@realEstateTrent I guess just personal experience. Even in my first week as a wholesaler I was able to find the square footage on listing sites or tax records before making a call. That was 12 years ago with less info online.

@drawSMBequity Who taught you this

@GenZMultifamily West side Costa Mesa 🤧

The difference in purchasing power across the country is wild. $2 million in Costa Mesa-A nice 1,964 sqft 3/2 house $2 million in Indiana- 70 acre compound I know I know Orange County is much more desirable, just crazy to see what's out there

@TheSalonDon The doctor gets paid if they prescribe more. Dirty industry

OBGYN just told my wife to go on SSRIs during pregnancy I asked if there’s studies she can show to make us comfortable She said she doesn’t sit around reading medical literature but 70% of her patients are on them while pregnant We have a health crisis in America

@itsEthanKeiser @TurnTaySJW @Mericamemed Remember the guy that pretended to be Ronaldo to sleep with girls and then the girls successfully sued him?

@drawSMBequity @TurnTaySJW @Mericamemed i don’t sleep with guys

@itsEthanKeiser @TurnTaySJW @Mericamemed Do you actually sleep with the girls

@TurnTaySJW @Mericamemed i’m the creator of the app and yes this is an ad, but no, there is no acting. i can post more footage showing it is real.

@shawngorham @SeanODowd15 @dealflow_guy Some insight please Shawn or link an explanation

@SeanODowd15 @dealflow_guy ya - call me before you YOLO and buy a business here

If you’re buying a business in California, and not from California - you need to dig in a bit deeper than normal. Specifically regulation, tax and spouses income tax. In the middle of one now, and the cost of ownership is only growing…

@darryllhamilton @GenZMultifamily @D_Atlas7445 @tcruznc You don’t own any real estate, do you Darryl

Reading comprehension must be hard for you. I said really conservative in relation to the rental income. It’s always interesting how you’ve failed to address pretty much any of my points and resort to personal attacks. Btw most guy who actually own a Rolex don’t put a picture in their profile and hide behind anonymous accounts because they can’t stand behind what they say.

Ever notice none of the “Section 8 Gurus” from Tiktok and Instagram are on here? I wonder why that is?

@patrickdichter I just read on here that if you need a QoE for a sub $5M business, you shouldn’t be buying a business

If you buy a $1M house and waive an inspection you might have a $30-50k problem at worst. If you buy a $2M business and don’t do a QOE you could have a $100k, $500k, or 1M problem. Or bankruptcy.

@darryllhamilton @GenZMultifamily @D_Atlas7445 @tcruznc Did you really just say 30% expenses on a section 8 property? And call it “really conservative”? This back and forth is useless I feel very bad for your clients

He owns about 750 homes. If the average rent is just 1200 a month gross (conservatively) take away 30% for expenses his net is 840 x 750 =630,000 in cashflow. Now that’s really conservative. But if you think he’s not a guru while making 600k a month minimum you’re just lying to yourself. He does post showing he makes more than a million net but what would you consider enough proof? He also says his portfolio is worth about 75 million. To give you an idea 75 million at a 7 cap is pretty realistic in today’s market.

@darryllhamilton @GenZMultifamily @D_Atlas7445 @tcruznc Do you have any idea how low the cash flow is on section 8 rentals in the Midwest?

Bro he only makes about 150-200k a month gross in course sales. You can also look up his properties through the LLCs he owns. The house he bought in Miami I know the agent who sold it to him and you can’t fake a 20 million dollar house and 10+ million dollar mortgage. You can’ check title on the house he bought and see it’s in his name, look at the starting debt on the deal and reverse engineer the mortgage which would be probably close to 100k a month or more all in (PITI) and the bank is not going to give you a 100k mortgage if you make 100-200k max. There are people in this world who actually have crazy wealth. I represent a lot of them but what do I know 😂

@GenZMultifamily @darryllhamilton @D_Atlas7445 @tcruznc Oh is that what he said? Well I own all the property in Manhattan outright 😎 Buy my course to find out how you can also own a metro

@drawSMBequity @darryllhamilton @D_Atlas7445 @tcruznc Idk bro lol I believe him. Last time someone said that on my posts he came and said he owns all them outright.

@GenZMultifamily @darryllhamilton @D_Atlas7445 @tcruznc No he doesn’t? He makes all of his money selling courses.

@darryllhamilton @D_Atlas7445 @tcruznc lol exactly he’s not a fake guru. He actually has what he said and makes his money doing it.

@Seth_Parker_ @ElliottEHolland A lot of people buying $300k - $600k SDE use QoE as far as I’m aware. What makes you say this?

I flew to Dallas to look at a $600K SDE security business. Hadn't even made it up the steps of the Starbucks where we were meeting and the seller hits me with: "Man, you won't believe this. Our QuickBooks has been down all morning." At the time, my day job was at a software company. I know how uptime works. QuickBooks promises 99.999% uptime. If it had actually been down all morning, it would've been on CNN. I knew immediately he was lying. But I didn't leave. I wanted to see how far he'd take it. It was worse than I thought. We go to his office. QuickBooks is "still down." He's showing me paper records, spreadsheets, nothing auditable. The office manager was in on it. I was going to fly home that night. But the seller convinced me to stay for employee meetings the next day. "They're expecting you, it'll disrupt the business if you cancel." So I sat through 4 hours of meetings the next morning. Every single employee had been coached to act like they worked at a profitable company. The business was losing money. They all knew it. The seller didn't just lie. He recruited his entire staff to lie with him. I share this because too many people want to give sellers the benefit of the doubt. "Messy financials." "Honest mistakes." "They didn't know." This guy knew. And he got everyone around him to help cover it up. This is not a game, folks.