Renan Cortez: $8M Restoration Business, 100% Seller Financing, Zero Down

Hey, everybody. Welcome to another episode of Still Searching with Jed Morris, and today my guest is Renaan Cortez. He's an Army veteran. He bought a company, experienced an epic failure, and now he's out to help other people not have the same experiences that he had. So, welcome, Renaan. Thank you. Epic failure. Yes, epic success, epic failure, whole circle, and yes, I am here to help others, just as you are. This is a great environment to be in. That's why I'm excited that you're here, because I talk to people all the time about business failure, and nine times out of 10, those of us who experience it, we can't talk about it publicly, because we have a settlement, there's a lawsuit, there's a nondisclosure, nondisparagement agreement involved, and so I'm able to tell these stories, but the names are redacted, and a few of the details are changed that way we don't out people who aren't allowed to talk about it. But I say that to say that it's rare that I actually get somebody like you who's able to say, "Hey, this happened to me. I'm a real person right here, raising my hand," and that's huge.

We need you to be able to see that these are real people and it's impacting actual people. No, absolutely. Yeah, so let's dive right into it, man. So you're an army veteran. Yes, sir. Yeah, 12 years, right out of New York. I really didn't have any guidance growing up. I grew up in Queens, New York, tried to go to college, wasn't good at that, joined the army, started out as a combat medic, but in the military got a lot of discipline, a lot of mentorship, a lot of development. A couple of people that believed in me gave me the opportunity because they saw something, and I've had one hell of a life and career since then. I mean, these people have really set me off, and my goal in life right now, and you're going to hear as we talk is always to pay that back, pay that forward somehow, some way. But that's how it started, yeah. And it's such a relatable story for a lot of veterans. I feel like our stories are very similar. I was in 10 years, you're in 12. I was not good at the whole college thing either,

needed the discipline. I did very well, but so what year did you get out of the army? So I joined '96, got out in 2008, January 2008. So you're one of the few that actually experienced it, the pre-9/11 days, and then also got to experience the war on terror. Oh yeah. Yeah. And in the late 90s, my worst deployment was Panama, right? Yeah, I was a combat medic in a military police company. And so our sister companies were going to Haiti, they were going to Bosnia, Serbia, that was popping off. And then it came time for us, we're like, "Where are you guys going?" They're like, "Oh, Panama." But I mean, it was still, it was still a pretty cool deployment, but did a lot of cool things down there. I turned 21 in Panama, so that's always fun. There you go. There you go. So then what made you want to get out of the army at 12 years? Because I know for me, once you get that 10-year mark, it's like, "All right, am I going to stay for another 10 and retire, or am I going to get out now?" That's kind of the crux of it. And you and I both made the same decision to get out. So what was the

turning point for you? Yeah. So in the beginning, I said I was a combat medic. I got tired of sleeping in the rain mud up at Fort Lewis. And I figured, "All right, what is the hardest military school for enlisted people that you have?" Because I didn't have a college degree at the time. And they said cardiology specialists, cardiovascular specialists, and respiratory therapists. I chose cardiology. All right. Before that, proceeding that, when I was a combat medic, just an infantry guy, this is what really set it off for me. In Fort Lewis, they had a program where they took the infantry medics because we all go through the same AIT or training, advanced training after basic. But then they split off medics into the hospital and into regular units, field units. They do this Freaky Friday program where they take infantry medics, put them in the hospital for a month, hospital medics, put them in the field for a month, we get to see how each other lives. So now we have a bunch of infantry medics sitting in the hospital with this. And the leader there was Sergeant First Class John Feltas. And he started off by

reading a passage from "Chicken Soup from the Soul" for the soul and talking about goals and dreams and all this hoo-ha. And we're sitting there. Boo! What are you talking about? Shout out. Get out of here with that ropey dope stuff, right? Anyway, we go, we do our rotation. And every day, he was so positive and just like your goals, if you think you can do. And on the final, final day, I remember this man. I went to him, I said, all right, Sergeant Feltas, all the hokey-dokey stuff, put it aside. Do you really believe in this? He's like, I 100% do. I used to have eight cards, now I'm down to four. I succeeded in these goals. If you put your mind to it, you can't. So you're saying, I'm just the dumb crap. Do you curse on this podcast? I don't want to. I'm just sometimes on my slip. I'm sorry. We're veterans. All right. All right. That's why I'm using all these weird words like hokey-dope. But anyway, I'm like, I'm a dumb shit, combat medic, infantry guy. You're saying I could be a doctor if I want. Right. Because you could do, he looked me dead

in my eyes. You could do whatever you want if you put your mind to it and effort. I was like, wow. And he, I felt that he felt it 100%. So now he's the first. He believed in you enough to where you're able to borrow his belief to believe in yourself. That was it. That was it. He sparked something. That was it. So the very next day, I'm here for Lewis. I go to Pierce College, which is the two year college. I'm sitting there in the admin office and I'm speaking to the admin. I'm like, I need to enroll in class. There's, you know, which classes do I need to be a doctor? And so there's anatomy and physiology. There's one for nursing, one for pre-med, for doctors. Right. All right. Put me in that one. They're like, you don't have the prereqs for that. You don't understand. Sergeant Felts has told me I could do whatever I want if I put my mind to it. So I need to be in that course. And she was like, that's not how it works. I was a PFC at the time. It's not how it works. Private Cortez. So now this other gentleman, Michael Kennedy, professor or doctor, Michael Kennedy, guy had an earring currently here, converse shoes, walking by the desk. Like, what's going on? And she's like, well, Private Cortez is, you know,

he's having a hard time not understanding prereqs. And he asked me, why do you think you could do that? I'm like, well, I was told by somebody far smarter than me that I could do anything if I put my mind to it. And there was something there where he's like, well, as if so happens, I'm the professor for that course. Allow him in. I'll keep my eye on you. We'll see what's up. So I got into the course. Nice. 4.0. I found out that I was really good at school. Because actually, this is kind of funny. I need to put this back up on the wall. This is a letter from Queens College before I joined the Army, because I tried to go to college. And it says, you are being dismissed from Queens College because of X, Y, and Z, you know, academic standards, you know, attendance and all this other stuff. And I usually have this hanging right next to my MBA from University of Maryland. Love that you framed that. Yeah. I mean, I kept it for a reason. Actually, no, I framed it for a reason. I got this my mom passed three years ago.

And as I was going through her stuff, she still had this. I guess it was a reminder for her of where I came from and where I got in life. So this is very important to me. And it means a lot, because this shows that this is not who you are. You could change and become something else if you pay it forward. It's, yeah, this is a very powerful thing. So I put usually put this next to the MBA and the degree from the certificate from Columbia for mergers and acquisitions because anything is possible if you put your mind to it. So I'm really good at school now. Like, oh crap. So I now I'm going forward, I'm cardiovascular specialist. And I end up top of that class. And they said, all right, you could choose any duty station you want that has a cardiology lab. And my question was, where is the medical school for the army? It's in DC, it's in Maryland, Naval, Bethesda. So I choose Walter Reed. And they're like, wait a minute, you could go to Hawaii, you could go to Germany, you could go to all these other cool places you want to go to DC. That's where the medical school is. All right. So I end up at Walter Reed startup as a tech.

Great career. Once again, I end up as NCOIC or for those who aren't in the military, it's, you know, the manager of the entire cast lab and entire cardiology service. So I'm doing big things there. I got my pre med degree, University of Maryland. So things are just rocking and rolling. Married, I have kids didn't want to commit to all that time in medical school. So after 12 years of the army, I had a choice. I was like, stay in because oh, that was a big thing. I had direct patient care. We did procedures, cardiology procedures, being an E six staff sergeant or becoming an E seven sergeant first class. I was on that transition where I would have to be more administrative basically stay in my uniform, have a clipboard and make sure everybody's doing their thing versus scrubbing in having direct patient care, doing the stuff that I love to do. So it was either go to medical school and stay in the military, stay right where I was, go up the enlisted ranks, become more admin or get out and start my civilian career. And I got picked up by Metronic.

And that is they are the number one medical device company for pacemakers. I started out as a clinical specialist and that's why I got out of military. So that's a long winded answer on why I got out, but that's those are the things that led me to getting out. Yes. Yeah, no, that's a good as a good story, though, because it's very, very relatable to a lot of veterans. It's that place where, you know, a lot of us, we, you know, if we're lucky enough to have a mentor or somebody who can help spark that drive and you're like, you know, the thing is that you did not end up going to medical school. But if you had not had that as a goal or as a dream, then you would not have gotten you to where you needed to be to where you're like, okay, this is actually what I want to do, going forward. And that's huge. That's what it's really huge. And so you get out, you join Metronic, you're doing medical device sales, right? And that's in 2008, correct? Yes. Yeah. How long did you end up doing that? So seven years with Metronic, and I went from being a clinical specialist, and I found that was really good at that as well, just naturally, because I was taking care of the patients. And I remember when I got out of the army, so this is another important piece. Getting

out of the military, they all told me, all right, Sergeant Cortez, you're going into industry, remember where you came from, don't ever sell your soul. I didn't understand what that meant. I'm like, okay, cool. 16 years later, I figured it out. But in the beginning, I got out, all I wanted to do was be a good civilian, understand the culture, understand corporate, and be a good clinical specialist. And just by having strong cardiology, wherewithal and knowledge, I grew within that space pretty fast. Doctors wanted to do cases with me, I started getting business, they made me a sales rep, and then I just started climbing that ladder. Now I'm understanding the corporate culture. And so that takes me up to seven years. And I had to make a big pivot. So I'm in DC, I'm originally from New York. You know, my mom, my family, my brother, my sister, their kids, my, you know, my nephew, nieces and nephews, they all live in New York. It got tiring that for four and a half hour drive up and down for holidays, where do we stay, my family's getting bigger.

So I made the decision, time is getting short. I need to get closer to home. I tried to find the job with Metronic in New Jersey. These jobs are very hard to come by. So Abbott, which is the number two company in the space, they offer, of course, they took the opportunity to pull me on over. So I did six years with them in New Jersey. Missed Metronic, I love the culture there, but I got hired by Abbott. Not all companies are the same. It's a great company. And that's where I won President's Club. So President's Club, for those who may not know, that's where you're at the top of the top of the sales community, where you're a high performer for at least two years in a row. And then they take like the top five sales reps in the company and you win President's Club. That's what it's called. Best of the best. It's the best of the best. And it's like winning the Super Bowl. A lot of reps, they strive for that and never reach it. So it's kind

of funny because there's a lot of companies that have like President's Club, Top Club, you know, all this other. I believe that in the medical device world, in these companies, in Metronic, Abbott, Boston Scientific, to win that award is like even harder. You know, it's just, it's top of the, not only are you the top company, but now you're the top of sales of that company. And so for me, it was like, I never thought in my wildest dreams, I would ever win. But I did. And so what was that like when you, when you worked that hard, and finally, when the, when that award, you're like, you're the top of the top, what was that actually like? So it was surreal. And now, so for me personally, I'm a very genuine, transparent person. My time in corporate, I would go to these national sales meetings and I didn't see, so I'm Ronan Cortez. I didn't see a lot of Cortez's, Rodriguez, Hernandez, you know, walk across that stage. It just, it just wasn't there. So for me, to have my name up there, and then it exactly happened, you know, a lot of people that identified with me, they were like, how'd you do it? And now I felt the responsibility of, oh, wow, this is an opportunity to kind of,

once, you know, pay forward, share what I know, and kind of do that. So that was really cool. It was a weird feeling. I didn't think I would feel that, but that was a cool feeling. But then extreme sadness happened, which was very weird, because now this is 16 years into it, right? Seven years with Metronik. Yeah, I'm sorry, corporate for 16, but seven years with Metronik, six years with Abbott. So 13 years into it, Win Presidents Club, I gave everything in order to get the business, like dinners, you know, happy hours, all that. I went for my army weight of 205, 210, and I'm sitting there at almost 300 pounds. I had to go shopping for clothes to go to Cabo, and I just felt uncomfortable. And so I'm sitting there at a resort that goes for like 12 to 1300 dollars per night, you know, full on just, they're throwing everything at us in a good way. And I was the saddest I ever was, because I'm sitting back. And I finally realized what they meant by

don't sell your soul to industry, because I made that company millions and millions of dollars, and I made a good salary. And I got to go to that trip. But then I'm like, if I would have just done that for myself, I could go to Cabo whenever the hell I want. And I would probably need more fit, and my mental health would be better. And then I didn't understand why I was feeling that way. And then I heard while I was there of all times, I heard a podcast with Tyson Fury, and he spoke about how when he won the heavyweight championship, he trained his whole life to win. He won. He felt like he didn't have a purpose. And he wanted to drive his Ferrari into a brick wall. And he says it vividly. He's like, man, I was driving, I revved it up, I was going, and then an angel appeared on my shoulder and said, Tyson, don't do it. And so he pulled over and stopped. And that was a wake up moment for him. And it's just like all of it happened. And I started thinking, well, what the hell is my purpose? Because is it to do this? Because

this didn't feel like what I thought it would. And then I started reflecting on how I even got there in the first place. And then Sergeant Feltz has popped in my head, Michael Kennedy, the gentleman that hired me into Metronic, Marine officer, John Dove, gave me a shot in corporate America. Those are the people that affected me tremendously. And I decided I want to do that for others. So that's when I was like, okay, things are going to change. I'm going to figure something out to be able to pay it forward. So that's, yeah, that's a very pivotal point for me. Yeah, it's funny, because a lot of us, especially those of us who end up getting into entrepreneurship, we have that moment where it's like, and you hear about it, you hear about it with other people, but it's different when you experience it yourself. You're like, oh, yeah, that there really is that peak of the mountain and you get all the way up there, then like, wait, what am I doing here? You know, it's like, I should be so much happier than I am. Why am I sad? Why do I feel like I gave away the best years of my life to do something that I'm not proud of? You know, why did I do all those, all those dinners, all those late nights, all the time away from family? And I got a little

bit of salary and I look back and like, man, I was, the salary was not worth it. That's right. Some people never come to that. And that's fine. That is absolutely fine. I was fortunate enough, maybe fortunate, maybe unfortunate. I don't know. I think fortunate. Has that epiphany? Yeah. But when you have an epiphany like that, it's not something that you can just have and then like, continue living your life. It's like, you can't go back. You can't undo that. What kind of, what kind of action do you take coming out of Cabo? You're like, I'm on top of the world, but now I've got, I've taken the red pill and I can't go back. What do I do? What did you do? Yeah. So like I said, I reflected and at that time, I started thinking what's going on in the world around this, right? So my heritage, I'm half Filipino, half Puerto Rican. At the time, the island had just gotten through a massive hurricane, no electricity. It was just a tough, tough time. And so I'm like, all right, let's start there. I'm not a millionaire by no means,

but I could go to the island. I could do something, because at that, I mean, we had like Lin-Manuel Miranda sending millions of dollars of aid on containers and all kinds of stuff. And I was like, all right, this is an opportunity to at least give back somehow, some way. So I fly there and so this is just a weird pivot. This is like, but it's an essential story. I'm there and I ran into a guy that I did jiu-jitsu with in Maryland. He relocated there, sold his cannabis farm in Maryland and now lives in Puerto Rico. And we just started talking about things. We're like, hey, this is the wild west of cannabis here. You want to start a plant from soup to nuts cultivating, growing cultivating, manufacturing all the way through vertically integrated. And so he's like, you want to start a business. That's the red pill. Yeah. So I was like, this is it. I, you know, I have, in my mind, I was, I just won president's club. I'm a badass with business, right? So I put this whole thing together. I was going to the

island networking, getting all the right things in motion. And then I had a really good business plan and I went to go, I needed money. So I started reaching out to people that had money. This is, oh man, I want to say 2020-ish, 2021. We're on that timeframe. It's pandemicy and you're taking advantage. Yeah. Yeah. That's exactly. So I put this whole business plan together and now I start talking to people with money, you know, friends, family. And, you know, I had some family members that knew some people that are in the investment world. And I remember them saying something like, so what's your IRR? You know, what's the ROI? What's your NPV? You know, what's your exit strategy? I'm like, I don't know what any of those terms mean. They're like, wait a minute. How dare you ask me for money and you don't even know, you are so green behind the ear, you know, wet behind the ears. Absolutely not. So I started googling these terms, like, you know, because I didn't, I felt

embarrassed. And then I was like, I wish there was a place where I could learn all these concepts. Oh, guess what? It's called an MBA, right? Yeah. So I use, I use my GI Bill and I enroll in University of Maryland. And of course, day one, they're talking about the time value of money, NPV, IRR, like, oh, well, yeah, now I, you know, so I do this, I'm in my second year of my MBA. And funny enough, I had kudos to the University of Maryland, because we had a capstone project. Everybody was doing fake projects. My project was the cannabis project. Yeah, I'm gonna watch this business. Yeah. And they were like, this is what it's about. So they put so much resources behind, so many resources behind me. They got some of the top cultivators in the world to come meet with me. I got the real numbers. It was awesome. I was ready to go. I was polished. I had a business plan. It was, I had a team. You know what? Let's take a moment to shout out the staff at University of Maryland. Yes. Was it the Robert Smith School of Business? Robert H. Smith. Yes. That's awesome. Because, you know, a lot of, a lot of the programs, you know, the top programs, they get all the, the

cloud and the notoriety. But for them to be able to recognize that, hey, here's a guy who's actually committed doing the thing. And we're just going to give them a bunch of resources and really get help them out as much as we possibly can. That's great. That, that speaks volumes for the, for the admin and the staff at that time and the, and the instructors and professors there. And it's kind of funny because right before that happened, I got a little overwhelmed with all the school and classwork and everything. And I almost dropped out of the program. And it was my, the people, once again, community, the people around me were like, "Renan, cut it out. Let's go. This is your dream. This is the cannabis play. Let's go." So they, they boosted me back up. The professors were super understanding and I, I, I finished strong, really strong with that group. Did you finish out your MBA in 23 then? Yeah, something like that. Yeah, I don't know. So, yeah, so I'm 49. I finished like 45-ish, 46-ish, something like that. Yeah. Yeah. All right. So you got this plan. You're ready to go. You understand your MTV's. You're ready to launch the company. Right. And now I need money and I'm ready to pitch again because now I know I have

the vernacular down. So my entrepreneurship professor, she says that I really think you should connect with this person named Cody Sanchez. I'm like, who the hell is this? Who's that guy? Who's that guy? Yeah. He's like, no, no, no. It's not a guy. It's a female. She married to a Navy SEAL. So she loves veterans. You know, Hispanic female loves the Latin community. She has a cannabis fund for, you know, from, you know, she worked well in the sex, private equity. Like, all right, cool. So I go home. This is a Tuesday. I Google, well, I get her on LinkedIn and I connect with her on LinkedIn. And this is before she blew up, right? This is, she was kind of like, she had just moved from California to Austin. Okay. So she's just now getting on the rise. She's there, right? She's on the trajectory, but she, you know, on LinkedIn, it says, you know, that she's doing a happy hour that Thursday in Austin for all the business owners in Austin, you know, she's a great networker. So I'm like, oh, wow, I know where she's going to be. And I know what time. So I sent her an email with my picture. I'm like, look, I'm doing a cannabis thing. You know, I would love for you to

look at this, blah, blah, blah, blah, blah. I live in New Jersey, but I'm heading down to see you on Thursday. I fly down on Thursday. And she recognizes me because I put my picture in the, in the, on the email and she goes, you're that crazy son of a bitch that got on a plane from New Jersey to come to a happy hour in Austin, just to talk to me. I'm like, yeah, she goes, you're going to get some time. So she recognized that and that was cool. That was super cool. But she did her happy hour. She goes, hang back, network, you know, do all that good stuff. And then after she finished doing her thing, and we were doing the networking piece, she came over, we're talking, I met her husband, Chris Petkis, maybe seal, found out he does jiu-jitsu and right off the bat, pick him up. Hey, Cody's like, she was upset. She was like, what the hell are you doing? Put him, and then Chris was like, no, this is how jiu-jitsu grows. Say hi, you know, it's okay. And I still have that picture to this day of just us three, because that was the day that I met her and it did change everything. That was the beginning of the change for me. So I get down there and she's like, I'm going to be

very honest, the amount of diligence I have to do. You have a smaller operation, we look at bigger operations. And she was very nice about it, gave me real good feedback. I'm like, thank you, no problem. Fast forward five months, she does her first main street over Wall Street, what big seminar. And I saw the guest list and I was like, I'm going to go. I'm going to go to that, because I know where there's going to be rich people talking on stage that I can talk about cannabis, because I was very much, you know, I believe I've worked for that cannabis thing. So I was going to pitch it. I get there. And I'm sitting at this table with this lady, this older woman sitting to my left. And she's like, what are you doing here? I'm like, well, I have a cannabis play and I'm going to talk to everybody on that stage and see if they're interested. I'm like, what are you doing here? She goes, well, we're about buying businesses. That's what this whole group is. I'm like, what do you mean? She goes, I bought a pool business. And I'm going to ask all. Yeah, I'm just my gutery. I'm like, you're a pool lady. What are you talking about? What are you talking about? And she goes, well, I bought a pool business. And then I bought another one,

another one, then I bought my competitor. So we do about 20 million of revenues now. Yeah, my job now. Yeah, exactly. And so I was like, you know what? And so I have a picture with her, her and I, because I'm like, I have to take a picture to remember this. So we took a picture. Then I'm talking to everybody else at the table and they were either in search of or they knew about ETA and I, foreign concept to me, didn't even know that a common person could do this. But I'm sitting down over the course of two and a half days, I did pitch everybody that I, you know, they were like, this is, you know, you have your stuff together. But have you considered some of the stuff we're talking? Somewhere during those two and a half days, it just hit. I'm like, you know what? This is where this is where it is. Start with cash flowing business. Now I got, now I'm going to learn how to do this. So I joined the community. That's why I'm very big on community. I joined actually a few communities. And you just have to find the right one that's kind of right for you and what feels good, right? Yeah, exactly. So, you know, so I was part of a couple of

different communities. And then this one just, I just seem to vibe with. And I remember early on, on the calls, I didn't understand what the hell they were talking about. Because even though we learned EBITDA in our MBA, we didn't put it into practice as we do as ETA searchers, right? Right. So, you know, they're talking ETA, EBITDA, SDE, multipliers, and all this other stuff. So, when I get into something, I get into it. So I started getting on biz by cell. I started making my own financial spreadsheets on what's good, better, best, and started really understanding the markets, the different sectors. IBIS reports were freaking fantastic for me because I knew, you know, it just so everything starts clicking. And within the first year of that, I found a dry cleaner, dry cleaning business. And were you looking for something in particular or just looking for a good deal? Nothing in particular. I was just looking at multiple sectors, a lot of service based stuff, because, you know, a lot of the technology things I'm not

big into, even though I'm strong with medical device sales, that that's why I don't do it, because I know the regulations of the FDA and all that. It's just too much. But you still have 16 years of being a salesman. If people don't realize that being a salesman is being a business owner, so you've got that still down. That's right. And part of the whole President's Club thing, I was a national corporate sales coach. So I would go region to region and talk to the sales reps and get them to understand how to negotiate, how to have the conversations, how to listen more than you speak, you know, and just a little different tactics on doing that. So, yes, it's one of my superpowers. Now, I come across this dry cleaner, and it clears about 250,000. I was going to buy it for 700. And, you know, that was kind of my deal box, 250 EBITDA, SDE, and above. I find it on BISBI sellable places, talked to it, and it took about 10 months. But I got an approved for an SBA loan at 6.25% because those are the rates back then, right?

And, you know, everything I had working capital, everything was going to be fine. At the same time, I also had a VA and a group of VAs that were doing off market deal search for me. And they found this restoration company, and it was 2 million in EBITDA. They wanted to sell for around 8 million. And I was like, you know what? It costs nothing to go meet this person, see this person. I want to see what an $8 million business looks like. Just like some people get curious, they want to see what a $20 million mansion looks like in an open house. It's free. Go take a look, right? Now, $8 million revenue or $8 million EBITDA? Purchase, acquire. $2 million in EBITDA. And so they made the connection. There was no broker involved with this. And we just kind of hit it off. You know, I went in, I started doing diligence on it. I'm looking at everything, and I saw nothing but upside. Because it was very mom and pop. And I saw how we could professionalize

it. And then, you know, I would say three months into it, I got, I started talking. I was like, then, all right, let me back up. I went to go look at it, not with the intent that I was going to buy it. I just wanted to see what it looked like. Once I saw the gross profit margins, the net profit margins, I'm like, oh, this is something actually really nice. Now it becomes, how do I buy this? And for anybody who's wondering, like right off the bat, I did not walk into that thing and say, look, my name is Renan, and I'm going to 100% sell or finance your business. That doesn't happen, right? I was just, because, and if they say, well, can you afford to do this? Like, you know, there's several vehicles I could do. I could get private equity. I could get a loan. But before we even get there, let's find out if we're a good fit. Let's find out if this is even a thing we want to do. That's how I always mitigate it. Because before we start talking numbers in terms, dude, I don't even know if I want to buy it. You don't even know if you want to sell it to me. Let's go through the diligence. Yeah, let's get to know each other a little bit, and then we'll see where we go. And that's it. So that's, yeah. As you're moving into it, what types of diligence did you do?

So, you know, right off the bat, you know, three years of tax returns, balance sheet, PNL, income statements, all that, right? So I would take it down, look at it, see what was good, what was bad. I knew people in the space. I said, hey, do these numbers look good? Does this correlate with things that you've seen in construction? Do these numbers, you know, this payroll, insurance, all this other stuff? And it all checked out like, yeah, this is on par with the restoration community. This looks right. I'm like, okay, so you could. You relied on, so for you, you didn't bring in like a Q of E, but you relied on people who maybe who were CPAs or understood the finances of that industry, and you just kind of took a look at it. I paid for a Q of E. So this is, this is how I did it. Yeah. So I went, but now I'm getting serious about this. I'm like, oh, I think I want to do this. I reached into my network because my superpower, like I said, negotiation, sales, networking, business acumen, things like that. I don't know anything about construction or construction accounting. So I reached into my network and there was a guy that I did my MBA with.

Nicholas Dunn, if you're listening, Nick was a buddy. And he knows this stuff cold. So he reviewed everything. We had a good feeling about it. But to put the final stamp, we've got a third party quality of earnings paid for it. They took about three weeks. And during those three weeks, I was like, look, I want to buy this business. I think we could do it. I don't know if I qualify for a loan. Meanwhile, I knew I didn't qualify for a $8 million loan. But I was like, look, if we could creatively figure this out, let's talk about it. And then if the quality of earnings comes back at the EBITDA amount that we think it is, then it's a deal. Like, well, how do you want to do this? I said, like, you're already, you're already certain that you would not qualify for an SBA loan? Well, because the SBA loan limits were like $5 million. And so anything higher than that is, is, it requires higher down payments. And I only had 70,000 kind of put aside for the the dry cleaner. I didn't have, you know, 800,000 to put down for an $8 million business, right?

And I didn't have the time I didn't have the contacts for private equity. I didn't have the people that would invest in that because my network was very, very small. So you're thinking, how do we make this happen? How do we make this happen? So I put together the dumbest Excel spreadsheet calculator, very functional, though, but it looks like something from the Commodore 64 days. And basically, it just gives me all the information. And it's not a lot of meters and gadgets. It's basically, how much am I buying this for? How much EBITDA is there? How much meat is on the bone? And how are we going to pay for it? What terms are we going to use to amortize this? Subtract the note from the EBITDA and make sure that everything makes sense. And you're feeling pretty confident about the EBITDA because you've got the QV. There you go. So I'm like, if all this works. So now the final part is finding a creative financing structure that works. So we're sitting at a diner and I'm like, all right, let's just pretend. Let's say we could do this seller financing thing. You're like, okay, just humor me. All right.

Let's say I could pay you back in two years, three years. Let's put that in there. So we put in an interest rate. I told them. So part of it also is being transparent, genuine, a little bit of education. I'm like, look, I have an SBA loan right here for 6.25%. That's the going rate. Let's say I do 7% with you. Give you a little bit more than that. I feel like, okay, 7%. Let's say I pay back in three years. So I put it in. Man, that note was skype. Basically, it went from 2 million of EBITDA to clearing 100,000 for the year. And so then the guy was like, there's zero chance I feel good at night knowing that you're possibly going to clear 100 because I won't even protect you on the downside. I was like, I am so glad you said that because now we're talking. So you're like, hey, instead of me just trying to throw stuff at you, how about we sit down and work through this together so you can see the numbers. I can see the numbers. We find something we both agree on. That's right. That's why I built that calculator also. So we're not

sitting there and putting things in a calculator. It's just plug it in. Boom. It spits out the answer. So you guys are working together. What kind of structure did you end up coming up with? So then I pushed it all the way out to 20 years. And then he goes, well, I don't want to be on the hook for 20 years. So we went back and forth 7, 15. We landed at 12 years. 7% at 12 years. I showed him how it amortized over it. I said, so now we're at a point where either I could pay you 8 million or I could pay you 11.3. And he was like, I'm like, interest, instead of me paying Chase Bank or Wells Fargo, that interest, I will pay you that interest. And now you get it in smaller chunks better. You can treat it, your annual taxes better instead of getting one lump sum. There's a lot of things you could do. It gives you a lot of flexibility. It's almost like an annuity. It's just cashflow coming in. And he liked that. And then he said, well, do you have anything you could put down? I was like, actually, 70,000, that's really it. But that's, and he goes, it's material

for you, right? Well, what is it? How do you know this is risky? I'm like, well, that risk is being mitigated by that extra 3 million. And so now my question to you, so I kind of played the reverse uno card. I'm like, do you think the revenues are strong enough to support this? I mean, I think it's 2 million, you say it's 2 million, the quality of earnings in your heart to heart. He goes, oh, absolutely. Okay. And then that was it. So he was like, now what do we do? I'll send it to my lawyer. So I still, I had to scan of it. It's a page and a half. It has like ketchup stains because we were at a diner eating french fries and everything. So there's a little bit of diner stains on it. I scanned it, sent it to my attorney and he turned it to a 74 page APA with all the reps and warrants and all that. And yeah. And then November 19th, 2022, I signed for it. I quit corporate a week before that. And then I took the month of December off to cool off and then got at it in January. Wow. Man, that's quite a pivot. So you go from maybe bootstrapping this cannabis company out of

nothing and somehow that pivots into, okay, I'm going to buy a company and now I'm going to somehow find this $8 million restoration business and I structure a seller financing deal where you put what, 70,000 down? No, I didn't put anything down. You put nothing down and then you structured the whole thing over 12 years. And did he include working capital in the company then? Yes. Yeah. So it was $8 million. So that was the sales part for that. But then I will say there was $1.8 million in the accounts receivables that he included and the additional $600,000. So I basically financed that. So the total deal, $8.6 million, but it came with $1.8 million. Fine by me. You know, that was some good working capital to get us going. And then obviously you guys, you and the seller, you had built a pretty good relationship at this point. That's why he felt comfortable doing it. Was there any agreement that he was going to stay and kind of help you get the transition? And what was that like? Yes. He offered his services

and everything. But what we found is, I mean, he like said, and Kerry, if you're watching this, I'm sorry, I have to say this, man, because he had all his accounts receivables for like the last 10 years on 9,500 rows on one Excel spreadsheet. And basically on the bottom of that, it was like equals some, I was like, holy shit, what is this? I was like, you can at least split it out by year. He's like, no, don't know how to do that on Excel. But he ran a multimillion dollar business on that. So those are those are the things where I'm like, wow, he's able to do it with that. And like every job was in a green folder and there were green folders all over the off. I have pictures of that too. It's amazing. I was like, no cloud based system, no ERP, you know, I was no project management. But he so he spent a lot of time, which is why he wanted to sell the business. So one of the one of the first things we did was professionalize and we could talk about that

and, you know, post that position, you own the company. Yeah. So unfortunately, you know, I thought about the dry cleaning business. I'm like, this is a company here with levels of management, 35 employees, I actually got the deal done. I have this where it's five employees, if one or two get sick, then I'm going to be the one that's ironing, hanging up the clothes at the register. And that's the whole thing of buying a business versus buying a job. Yeah. So I was like, look, if you can do it, if you have the means, I always tend to go bigger. Because if you go smaller, you do tend to kind of buy a job. Unless you're, it's a bolt onto something that's preexisting, that you could incorporate and integrate. But if it's your first one, you're probably going to buy a job if it's a smaller, that's my opinion on it. And that's fine. That's kind of what this is. And a lot of times you're going to be an owner-operate. You've got to be able to roll up your sleeves and get in the job. Because as you said, and this is usually what happens, you know, at some point, like you're going to have to step in there and do the work. So taking a step back from that,

so that comment right there, no matter what you do, you better be prepared to get in there, understand that, because one of the things that really bothers me the most when I talk to people, they say, oh yeah, I'm going to buy this business HVAC, do you have an HVAC background? No. No. But this guy, he only does four hours a week. Okay. He does. He just spent the last 30 years building it up. He knows it like the back of his hand. That's why he can't. You don't think that you're going to go in there and do four hours a week. Absolutely not. You're going to have to eat, breathe, sleep, just understand that stuff. And then you can think about that. But Exactly. And by the way, who's going to hold the license? We didn't even talk about that. That's right. That's right. Yeah. So for this, it's actually, the licensing is very light in restoration. It's not a, it's good and bad that it's not a big barrier to entry. So you're talking about WRT, all these licenses, mold licenses, and we had plenty of guys in the company that held those. And then I eventually got it, my business partner got it. So that kind of protected us as

well. Right. So you own this company now. You've got a good relationship with the seller. You dive in the company, you learn, you get licensed. So you're learning, you're learning on the job. What was that? What was that like? How did it go for like that first 12 months? The first 12 months, I worked more hours than I can remember in my corporate career. I'm that serious. I was sitting and I sat there with Nick and it would be dark outside and we're sitting at our desks like kind of looking across at each other like, Hey man, we're working a lot, but it was a different kind of work. It was our business, our building. It felt different and it felt cool, but we knew the task at hand and we knew what we had to do. Building something for yourself. That's it. And so it just felt better. And it felt, also we had the ability, like if on that Wednesday I had to do something with the family, it wasn't, oh, I need to put in PTO, maybe I could get off. No, I'm going to go do that. And then I'll just, yeah. So that,

that first year I've lost about 40 to 50 pounds. I was happier. It just, and then I just got, healthier after, and everybody noticed that even Cody, she's like, oh, you're looking spelt. Cause I just, it just changed everything for me. This was the beginning of, because truth be told, this was cool. This was cool for financial freedom, corporate freedom, but this was going to help facilitate the bigger thing, the academy that I mentioned, right? Because this is, that's my purpose on how to give back, but I didn't want to, I wanted to subsidize it and just have it and give a resource. I wanted to go so far as to, let's say somebody came into the program, had a great idea and either wanted to start a business or buy a business. I would use my earnings from the portfolio to then invest in them. That's, that's the kind of idea that I wanted. So, so I say all that, but there was a moment after we closed and we're doing the business

and the worst thing that could have happened is in January, I had a million dollar month. I went skiing for a week with a mastermind and I'm like, I just bought this business. I'm going to leave for a week. My biz partner, he's going to hold things down, but we're about to test this whole thing out. And we had a deep freeze in New Jersey. A lot of business came in. We had a million dollar month. I'm like, oh, we're not, it was too easy from the beginning. But, but then that's when I got the idea. I'm like, holy shit, I just bought a company with no money. If I had money, a good source of capital, imagine what I could do. I could build a portfolio because I only wanted to buy one business, but then that's when the idea of going, you know, buying additional businesses. So I didn't want to embarrass myself like I did the first time around, you know, when I got my MBA. So I enrolled in Columbia for mergers and acquisitions. Cause now if I'm going to go head to head with Alpine, Sequoia, you know, a bunch of other private equity firms, I don't want to be told, well, you didn't value this, right? Because

you didn't use the Hamada equation or I wanted to know that I, that I, you know, so I went there. And the funniest thing ever is they basically taught you how to buy a company on the back of a napkin. It was like the craziest thing. And I saw it firsthand, people trading five, 10 million dollars across the table on a pitch deck, on because of a relationship, because the team was a good team. It was the most amazing thing I've ever seen. And it really opened my eyes to things. And I was like, Oh my God, these people are doing it. Yeah, they pull back the curtain and you're like, Oh, there's no, they're there. That's it. That's it. So that made me even more committed to learn and understand this space and share it with others, because I have seen some of the top. And so now I built this thesis at Columbia. And I was like, if I get up to this certain kicker and this point, you know, I have these, these companies, and I exit at this point. So I had a one and a half billion dollar exit setup. All the professors were like, that's it. That's exactly it.

They connected me with a couple of people. I got into family office club. Now my network is booming. I'm meeting all kinds, you know, Mitsy Purdue, Mark Cuban, just a lot of cool people in this room over, I would say a year, year and a half. I had exhibit booths up. I started my own fund, you know, Seneca Adventure Group, it was a Reg B506C. It was 100 million dollar raise. And then the other thing that probably was the worst thing that ever happened was I got a term sheet for $207 million. I'm like, oh, and it was notarized, executed by the family office, by our team. I had a chief operating officer, CFO, biz dev, chief commercial officer, EA's. It was, it was some of the best times of my life. It was awesome. I'm like, ah, you're on top of the book. That's it. And then last year happened. Last year happened. Yeah. And then last year happened. And let's, all right. So let's take a pause. So we're getting into last year. So this restoration

business you bought, how long did you end up owning it? Three years. Three years. And so when you met, when you say last year, that's the third year of owning the business. Correct. So that was the beginning of the last year. Correct. Yeah. So it's doing great. You know, revenues are growing. You and your partner, Nick, you're doing fantastic. You're growing this business in Jersey. And now you're like, man, you're like, hey, I'm doing this for real. You know, I'm an operator, butt's in the seat. And now I'm like, you know, making these big connections. I'm going to Columbia. I'm realizing that, you know, I can now raise a lot more capital than I thought before. And I'm going to go and do this for real. So you're, you're ready to go. But then what happens with the business? Right. So now revenues are starting to decline. I mean, it was a tough year for restoration anyway, but revenues are declining and we're not understanding why. 24. Yes. So it starts going down and, you know, we're not quite understanding what's going on. We also invested a lot of the revenues back into it. We moved location to a better professional building. We got a new fleet

vehicle. So we refreshed all of our sprinters and turned them into pro masters and then enterprise fleet management. We brought ADP on board. You know, so it was a lot of things that you would expect at a larger company. We got cloud based systems for project management, you know, all the things. So you're investing in the company to make it better, but that also brings in debt because you're investing in the company. That's right. That's right. So, you know, we're like, as long as we do the same or a little bit better than year over year, we could afford all this stuff, but now the revenues are going down a little bit. It starts getting a little scary, like what's going on. So we sit back brainstorm and we create a couple of different divisions within the company, because that's one of the beauties of a private company. You could pivot as necessary. You know, insurance companies changed their policies. You know, they made it harder for people to put in a claim and we're very heavily insurance based business. So we started going more commercial, getting contracts from commercial builders, contract labor, punch lists, post construction

cleanup, things like that. Sure. And that kind of helped us break even. You know, we went from like six million in revenues down to like two million and that got like, what the hell? Yeah, that was like, what's going on here? And then by doing all the pivots, we maintain about three, little over three, but that overhead is a huge drop. That's still a break even, but that drop, I'm like, that's not organic loss. What's going on? What's happening? So I bring the older previous owners and I'm like, look, this is what's going on. What's these people that used to give business to us, we're not getting it anymore and all this. And there was just like a weird disconnect. And payroll is 80 grand every two weeks. And some weeks we didn't have the payroll. So I dipped into my money, started paying that. And I did more of that and more of that and ended up taking a MCA loan, which, and we could talk about that. There's pros, very little pros, if you do it right.

But a lot of cons with it is very predatory. There is utilization, but I don't recommend it, unless you know what you're doing with it. And I think I know how to do it, but I would still avoid it at all costs. I took a $600,000 MCA loan. That caused a payment of 12 grand every week on top of all the other OPEX. And that just started straining, stressing, marketing. We're putting $6,000 into market. There was a lot of money going out. You're bleeding. We're bleeding. It's one of those things where it's like, you know, the old story, like a frog in the boiling water. At first, it's not boiling. So you're just like, oh, it's fine. I can do a little fix here. I can pivot my revenues here. And then you're a little low on payroll when we go, no problem. I'll backstop that with mine. And then, like you said, by the end of it, you're backstopping all of payroll. That's it. That's it. What is happening? This is way more than organic. What's happening here? That's what we didn't know. We had no clue. And the previous owners,

like, oh, it'll come back. It's ebbs and flows. It'll come back. This is what it does. And so we never ebbed and flow like that before. You would have seen it in the QV. That's right. I know. I know. And I think, you know, because every year, like clockwork, there was always like a big commercial loss that brought in like a million, two million in revenue, or, you know, something pretty, pretty big. And none of that had happened. And they also, this is a little bit of foreshadowing. They also had another LLC where they were in a similar space, not in the mitigation space, but in just like general contracting, construction space. The previous owners were. Yeah. Yeah. Did you have a, did you have a non-compete clause or something like that? Oh, yeah. Yeah, of course, absolutely. They're not directly competing in restoration. They're doing something similar but different. And so you're like, you knew that, but it wasn't like a, you're like, it is when it is fine. They're not, that's not the problem. And then I always suspected something and it's funny because Nick is like, they can't, they can't be doing the mitigation because they have a non-compete. I'm like, hey, people aren't supposed to kill people with guns,

but that, that shit happens all the time. So what's on paper is one thing and what's reality. There's a million ways you can hide it, slice it, dice it. You know, if people want to do it, it'll be done. And it just, it's a pain in the butt. You have to be very diligent. So what did you figure out? I read at this point, I had to put all the private equity stuff on pause, right? Cause that was my job. I was going out, I had five other companies on LOI. I mean, we were ready to do this deal. I had the term sheet. And then right at that same time, the, it was election year and they pulled the term sheet back. They said, look, we can't do this this year. We have to put it towards other things. So no money was coming in for that. Cause we're like, if we could at least get that, we could fix a couple of things. You know, money doesn't fix everything, but it helps fix his money things. It's funny things. But all right. So the silver lining in that is by not having that influx of capital, we knew how to run a business when we

had money, AR, you know, when we were doing good the last year, year and a half, we learned how to run a business with very limited resources. And we would sit back once again at the desk, look at each other and be like, this is economically impossible. What we're doing right now that we're able to survive this long without going bankrupt. This is amazing. But we kept pivoting. We kept fighting. You were getting contracts. And we did arrive and things are, when things are up into the right, it's easy to be the owner. But when you're getting kicked in the teeth every single month, over and over and over, how you respond, that, that tells everything. That, and that, it gets hard. That, that put me in a space that I never thought I'd be in, man. It was dark because I didn't know where to pivot. And it was a community that, that kind of helped me because there were people in the space that I got to talk to. And some of them are like, hey, man. And so I kind of figured this out a little very late in the process. They were like, business is a living organism. Sometimes it expands. Sometimes it has to contract. It is not static.

It is not your responsibility to put your family at risk to keep that business alive. If the business has to die, the business has to die. That's, you know, kind of like Drago. If he dies, he dies. Yeah, yeah, yeah. And it's tough because I'm very empathetic and I see people that have mortgages and kids to feed and spouses. I'm like, shh, you know, but so do I. So there, that's something that you need to be aware of and understand that you have a gear to, if you have to, let people go or tell them, hey, we're not going to have payroll this week. What are you going to do? You know, either you could work for free until we could get out of this thing that we're in, and then we'll make it right. I would understand if you leave and put in for unemployment. And that's eventually what we had to do. We had to let some people go. It's a really tough situation because, you know, I remember reading Corporate Turnaround Art Street by Jeff Sands, and he talks about how like when a business is, you know, is failing, you

know, it's like, it's like a patient in an operating room. And as the owner, you're the surgeon, and you have to have the courage to be able to amputate a leg to save the patient. And a lot of people don't have that level of courage. I certainly didn't when I was at the one in the seat. And you realize, like you said, it's like, you don't want to hurt anybody. You didn't buy this company to like lay people off. But then at the same time, if the business fails, everybody loses their job. And so it's a very tough space to be. To your credit, and to what kind of like why we connected, these aren't the stories that I heard on LinkedIn. These aren't the stories I saw on Instagram. The stories of, they always have the cute thing of, what do you do if payrolls do three in the morning, all that bullshit. But did it, this story, I mean, it's always a reality. They do say it's a reality, right? But I think a little bit more awareness around this needs to be out there. That's kind of why we exist, I think, to kind of put that in the forefront and have that discussion,

because that's what saved me was talking to other people that have been there, done that, give me good credit. They were like, look, your house is your house. So what? And one guy, you know, the guy that's making millions now, he was like, dude, I had like a 7000 square foot house, sold that freaking thing. My family and I, we downsized to X amount, whatever. And now, guess what? We're back on top. I don't want a bigger house. We're perfectly fine right where we are. We're good. It's because, and you, yeah, so I had to come to grips with a lot of that stuff of, hey, we might have to lose the house. We're going to lose the cars. We're going to do this. I don't know if you could go to college, you know, just a lot of things. And that got hard, because to use the medical thing, you know, my whole career, medical cardiology, people say, oh, that patient will be all right. Guess what? Sometimes the patient's not. Sometimes they die right there on the table. And so everybody around me, they were being very positive, very

optimistic. You'll figure it out. Sometimes you don't. Sometimes you bite, you bite the big one, and you have to make a move. Yeah. Yeah. So that's the reality of it. You know, sometimes you just have to. And you have to go in there knowing that this is a very real possibility. It sounds like, I mean, you were very fortunate to have a community around you to kind of hold, help you and hold you together. You obviously had your family there. And from what you've told me, the passenger wife was really supportive. Yes. It's so important. I became non-functional, anxious, because then I put my house on the market a little over a year ago, because I could, it's crazy. I've always had a credit score of 800 plus. You know, I was fortunate to have good corporate job and all that other stuff. And now I'm sitting here with debt up to my eyeballs, taking out loan after loan, credit score 500 something, can't even unlock the equity of my house. So I have to sell it in order to live. And then in my mind, I'm like, the playbook is, if I ever, you know, failed at this, I would just

go back to corporate. Well, guess what? Corporate doesn't want a late 40s guy that went for entrepreneurship and now is trying to come back. So that journey at the key lesson, that is a key lesson because a lot of people don't realize it. They're like, Oh, well, this doesn't work. I'll go back to my corporate job. And sometimes that's true. But like you just said, like, like you are at the top of your career field, like you won that president's award. Like, yeah. So if anybody was going to be, you know, rehireable in their corporate career, it would be you and just crickets. The problem I ran into, I was either overqualified for a lot of the jobs because I was ready to accept anything. I just wanted to put food on the table. I was either overqualified or they had somebody internal. And to be perfectly honest, at the salary point that I was looking for that where I came from, they're very, very few jobs, you have to know someone to know someone to know someone. And so I got to the almost to the finish line on a couple of companies. And then I went back to my metronic guys. I said, Hey, I need some help. And all of them, they were all rooting for me in this

entrepreneurship thing. They were like, dude, what's happening? Tell talk to me. I've told them everything. And, you know, by the grace of God, a lot of good things aligned. And I ended up, but before that, before that even became a possibility, I was sitting here at this very desk, not knowing my next step, man, scared to death, looking at pictures of my kids, the pain. I mean, every day, the pain, the anxiety, the non, I was just like shaking. Like, my family was here packing up the house and I'm watching them and I couldn't do anything. I felt like I worked my entire life. And because of a decision I made, we were about to lose everything. So I'm sitting there and the most irrational thing ever, I was ready to kill myself, man, right here at this desk. I had my MMP, Smith is what I said, MMP 45 chamber. I'm doing that because I was like getting ready to psych myself up to just, and I was doing just it. And I was crying. I'm looking at my, my kids. I'm

like, it's such a cowardly thing. But the pain I felt it was just, you don't know you're going to do it until you like right there. Yeah. And at that moment, see this is my phone is just like right here on the charger. My buddy Marine sniper from back in the day, he calls me. I had a choice. Do I answer or not? So I answer. I'm like, Hey, man, what's up? He goes Cortez, what are you up to? I said, Well, Jamie, this is what I'm about to do without skipping a beat. No, you're not Cortez. You're going to go ahead. You're going to put it back in your safe. We're going to sit down and we're going to talk. And I listened to him because he's a guy got out of the military. He built his he's a construction engineer built his own company had did really good and went bankrupt. Wife to kids lost their house lost everything. Could never tell it the way he lives now. Bigger house than he's ever had. Now it's all not about it's not all about material things, but you just kind of you do judge to a certain extent. You're like, Oh, this guy's doing well. He had it. He's done the thing. And so he calls me. He goes, I know you are on a path that's

crazier than anything I've ever done. So the pressure must be that much harder. I need to check on you. This is me checking on you and I'm glad that I did that phone call lasted a minute and 45 seconds. And then my very next phone call is to my brother NYC. He's a NYPD. I told him come by take all the firearms because I'm not feeling right. I'm scared. And he did. He came right down an hour, half later took it and kept it for about two months until I figured things out. And that was the real thing of it. That's another reason, you know, community. And I was not everybody's like, Oh, you should have called me. No, no, no, no, no, no, no. When you get like that, nobody calls. Nobody's gonna. Yeah. I can't. Yeah. You're not. I was not going to make the phone call. Thankfully, the phone call came to me. And I answered, I was not going to make the phone call. It snapped me out of it. Then I got my brother and then my brother, God bless him. And like, he lives in New York. I live in New Jersey. For the next couple of weeks,

he was at my house every day. If not every other day, just to sit with me, sit out back. I started smoking all of a sudden, I don't smoke. I'm like smoking, smoking, smoking. I was drinking a bottle of vodka. And he would just sit there and just watch me drink and smoke and tell me things are going to be all right. He goes, Hey, we'll get a trailer. You live in my driveway. You know, there was options. It felt colder because just a couple of years prior, my mom passed. And so she was always my safety net. If anything ever happened, I could go live there. That doesn't exist anymore. So it was just a cold world. It just felt bad. But yeah, so then things, I hold on, hold on just for a second. Yeah, dude. Yeah. That's huge. That's huge. Like, you know, I talk to people about this all the time because, you know, the vast majority of people, they don't talk about business failure. And, and a lot of times they can't. And then I also tell people, like, look, of the 40 plus people at this point that I've talked to have experienced this kind of failure, five of them have verbally expressed to me that there was a point where they

they were like, they were like you, they were right on the edge. They had already made the decision today is the day I'm killing myself. It is over. And I know that if if five people have verbally told me that and you're number six, then there's just as many who had the same feelings, the same thoughts and didn't tell me. And it is so important that we have these kinds of conversations because there are other people out there right now who are experiencing this today. You know, they're, they're, they're looking down that dark tunnel abyss of what failure feels like to them. They're seeing all of their, you know, their assets, their money, everything they've worked on their entire lives, their entire careers, you know, going down the drain and they feel like the failure to their family, to their spouse or their kids. It's huge. It's so important to be able to see people like you who is like, who has the courage to not only, you know, put the gun down and move forward, but then the courage to hop on a podcast and say, Hey, that was me. Oh, this is this is

a year later. So I feel if you would have, this was six months ago, I was still quiet. There was no way I was, I went dark. I went dark and didn't talk to anybody. And just in the last three months, I felt another sense of purpose again. I'm back on track. So yeah, so that's, I'm feeling like myself again. And this is myself, my authentic self, I like sharing, because if it can help somebody else, then let's go, it makes me uncomfortable. I don't like saying this. I don't like putting this out into the world. You know, my family is going to see it, whoever's going to see it, but they were there. They saw it happen. It's not like it didn't happen, right? So if somebody can see that it resonates, then yeah, then it's true. I've accomplished the mission. If I could see somebody who has the courage and the self confidence to actually talk about what real failure looks like, and then how that impacts them in and share that in a way to help somebody else, like, I want my kids to see that. You know, I want my family, I want my peers to see that. You know, that's real strength right there. All right. All right. So the business is

heading under, did you ever actually find out why revenue was dropping so bad? Yeah. So, you know, this is kind of crazy. Now we're getting to the point where I have my house listed, you know, because at that point I'm deaf, blind and dumb. I don't know what's going on. I can't, I'm very incoherent about a lot of things. All I know is I need to get a job. And a lot of my interviews, I think that when you go in with that energy of needing something, people are just like, there's something weird. I don't know what's up with you. So I went back and I put all my, I just went for it. I was like, I talked to my guys back in Metronik that I've known forever in a day. They're still with the company. And they said, dude, as luck would have it, because I was ready to move back to Maryland, join my old team. And they said, is New Brunswick, New Jersey close to you? I'm like, that's in my backyard. Why? Tell things happening. There's going to be an opportunity there. A very good opportunity. And I was like, oh, God, yes. I met with the manager here. And then the manager here, he was

like, look, man, I don't know you, but you have a lot of good people vouching for you. So, you know, welcome aboard. And so a lot of my guys, they were like, Renan, don't screw me over. Don't come back, hang out for six months, get stable, and then go back and do the stuff. I was like, as a military veteran, army guy, you have my word, my integrity. I am not going to do it because, and so here we are a year later. I'm doing fantastic. I mean, I'm good at this. I took a territory that was performing about 60, 65% of plan. And we're doing like 120 quarter over quarter. It's like night and day, you know, because I'm, I am a veteran at this job. We have a good team, good culture, all that good stuff. So a lot of PTSD this last year, because anytime I like, it was weird every payday, I felt like it wasn't going to come because I hadn't gotten paid in like a year. You got so used to it. I didn't believe that it was going to come or if I knew my

commission was coming, I'm like, I don't know if it's going to be there. But so it took some time, right, to feel normal again and be like, okay. So three months ago, and it took this entire time to also renegotiate back on how I'm going to get rid of this company, you know, because the default is the previous owners take it back. So now I can concentrate on that we're going back and forth. We're doing a lot of these things. And the general manager that I hired, you know, we were still talking she's like, since they took the company back, all kinds of business has come back with it stuff we haven't seen in a year or two. You son of a bitch, what it comes down to is they wanted the other divisions that we set up because they were very lucrative contracts. And they basically defaulted us so they could take command and control that because that was the default. So I actually had an activity driving down like they were interfering to drive down your

revenue so you can default they were doing a no. Yeah, yeah, they and I'm like that's short so short-sighted because your payment is predicated on the revenues. And I actually had another aha moment yesterday, like I mentioned, I was I spoke at that event, 51 vets, and I'm sitting next to the Harvard gentleman. And he actually brought up a very good point that I hadn't thought of. Yes, I did 100% seller financing. It was all great. It was all, you know, whatever. But that caused the temptation to default and take it back because if it was a bank, they have zero reason to default because if they default, I mean, they got the money, they just go, right? You know, there's no reason to take it back. But because that was an option. And, you know, I guess one of the brothers, his mind changed, his wife didn't have a job anymore, he wanted some money. And he saw that we were doing well on the commercial contracts. Like,

hey, we could we could take those back. So it just it was like a weird spiral down. It was a very inorganic spiral down. And anyway, sold it back for $1. Wow, we were talking about going to, you know, court back and forth. I was like, look, if you go to litigation, nobody wins. Everybody spends money and it's, you know, and then in talking with my M&A lawyer, he's he's one of the guys that are like, Hey, man, you need to reach out to this guy, Jed, Jed Morris, he has a similar story to you. I was like, you know, Bill, you're like the third or fourth person to tell me this. And so that's when I reached out to you. So that that's why, like in the last month or so, everything has kind of come to a head because that's where I am in my journey. And there we go. Wow. Wow. Yeah, you know, that's one of those things. I talked to people and, you know, having having someone like break the non-compete clause is actually quite

common. And I tell people, look, if you're going to buy a company, and, you know, it is so important that the for you, it is so important for you as the buyer that the seller has a really good idea of what they're doing post close, right? Because you have to put yourselves in their shoes if they've been if they've been doing one thing for 30, 40 years, and that's all they ever knew how to do, and they were actually good at it. Well, then, you know, it's weird because once they once they once they're out of the business, like, even if they even if you use a loan and they get that big payday, the thing that changes is they're no longer getting that monthly SDE payment that those dividends they used to get. And so that stops. And it causes a it can cause panic in the mind, right? Because maybe I've got two, three, $5 million in the bank, but I'm not getting that, you know, I'm used to getting like 400 grand a month, like I'm used to pulling in some cash and having all these perks and all this stuff and knowing that it's consistent. And so now I'm thinking, well, sure, I may have some money in the bank, but what happens if that is that enough to last me forever? Is that enough? Like, what do I do? And sometimes, you know, a seller will

compete with you because they don't, you know, they're scared. They don't have anything else they can do. They're like, all right, well, I've only ever been a plumber, I'm going to be a plumber again. You know, I got to feed my family. That's what it was. Come to find out some of those commercial contracts we won that we had to pivot and create those divisions where we actually outbid them. I didn't realize that we were beating them with some of these builders. And so they knew we were beating them. And so that's, there was a little bit of that. They were like, Oh, these guys are beating us. It gets convoluted. 100% seller financing. Because like you said, with the seller financing, they didn't even have that large slump of money in the bank. They were literally just getting the payments from you. And so there's zero incentive for them not to like, I know it was very short-sighted. So I think they just wanted the contracts. They were like, we're going to get the company back. We're going to get the contracts. The first year, we paid them like 750 grand, almost 800 grand in payments, right? Second year, we're making payments. And then we eventually had to stop as revenue was dropping. So the seller financing saved me, I think it probably

lent to temptation for them to default and take the company back, but it also saved me from going bankrupt. All I lost was the company. I lost the company. All right, cool. But I had the ability to stop payment and not have any backlash, you know, legal. Right. Yeah. Let's also be clear, because some people, and you're absolutely right. And, but sometimes, especially a first time buyer will look at that and say, all right, well, if it fails, then I didn't lose anything. Like I lost my down payment or whatever. But I didn't lose nothing personal. I didn't sign a personal guarantee. But like we just talked about, yeah, you didn't lose anything because of business, but you lost your health, your mental health. You nearly lost your life. I know. Oh, I know. I know. I tried to see this overlining in it, but that's why I have to reframe it. And actually, one very, very, very powerful book that I read in Reaction to All That is Failing Forward. And basically, it's the whole thing of people think you have success. And on the opposite

side is failure. Failure is actually on your way to success. The opposite of success is doing absolutely nothing. Status quo, just sitting there. So that's true failure, doing nothing to achieve your goals. You're going to have failure on your way to success. You just have to understand that. And in the book, John C. Maxwell, he says that depression, anxiety, and suicide all time high because people are preparing for the success they're going to have, not for the failures that are imminent. So this is a very, very important topic that you have to reframe what failure truly is, how to cope with it, how to deal with it, have a community around yourself, and then get past it, learn from it, and continue on to success. That's my biggest takeaway. And also, if I'm going to buy a business, make sure that they don't have an existing LLC, anything remote to what they're currently doing. That's a deal breaker right there. Because even you said, like, you had a good, you had a good relationship with the seller. Like, you guys really kind of hit it off. And it still

happened. And so you can never mitigate all the risks completely. And I said this to the vets yesterday. Even the best laid plans, something, you could stay in corporate and what happens, you know, they lose a round of funding, and now they have to do a reduction in force, you lose your job, right? You could be a government worker, government shutdown, now you're not getting paid. Best, you just have to know how to pivot, have the ability to pivot and figure a way, figure it out. So that's basically entrepreneurship in a nutshell, figuring out a daily problem that you have to figure out. And absolutely. So, all right, so you sell the business back to the previous owners for a dollar, you're like, you know what, we're not we're not doing litigation, we're not doing it. And I think that was actually very wise on your part, because a lot of people do jump to litigation. What you don't realize is like, this is civil court, 70, like, there's no guarantee you're going to win. Let's, that's exactly right. And then it is absolutely going to be expensive. And then,

even while you're going through the process of paying all this money to get through civil court, you still have to deal with the negative outcome of whatever reason you're in court with to begin with. And then even if you do win, which is not guaranteed, even if you win, something like 70% of civil judgments never go paid. That's right. So what did we even do here? And I think that's, yeah, that's what I highlighted. The same thing, man. I negotiated where they paid off the rest of the liabilities on the company. And the funny thing is, they didn't even take the EIN. So I still have the EIN with what it looks like really good history of revenue and income because there's no liabilities on it right now. There's no overhead. You did an asset sale to them for a dollar, just transferred all the assets of the business over to their business. So you, you still own the shell of this company. Yes, I do. And so I'm using that shell right now to actually, so I boosted up my credit score. I'm using that shell of credit history to get a line of credit to get a couple of plumbing franchises. So that's where I am now. I'm still, I'm back in corporate. I'm doing that.

And recent development over the last two days, I mentioned I had five companies with LOI ready to go, two of them I still talk to. And I met a private equity firm yesterday that is talking about helping us do this deal. And I will say, even if I get back into this, I'm going to partner up with people because I made a commitment not to leave corporate. So I'm here for another two years, but along the way, I will place a good CEO. That means that my profit share is not going to be extremely high, but I'm building something. I'm building something so that when I am done with corporate, I could slip into that and then fully realize the fruits of my labor, you know? Well, and you're capable of doing that because now you have the experience. Oh, yeah. All right. I don't want to get too far off on a side note, but you did mention your partner Nicholas. And so I don't want you to speak for him if it's not the right, if it's not your place. But how did he handle all of that? Because you guys are in this together. Yeah. I mean, he went through it also. His wife got a job to kind of hold him down. My wife

did not. I'm the only earner in the house. But his wife went out. He ended up selling his house. He liquidated. He's a lot younger than me, which kind of lent to him being a little bit more flexible. Like I have my kids going to certain schools in the neighborhood and all that. And it's a bigger change. He has younger kids. And so what he did is he sold and he rented in a very similar area. And he made a pretty good nut for selling his house because he had good equity and he was like, yeah, you know what? Kind of silver lining. This led me to making money off of the house. So he did that. He found a job and he has a good resume himself. Like I said, a lot younger. So he's doing that. And I talked to him. I'm like, Hey, would you ever do this again? He goes, this sucked. But under the right circumstances, 100%. So one of those companies are the $12 million company is the one that I would do with him. It's out there in Pennsylvania. We get that across the finish line. We're back in the saddle.

That's wild. Yeah, it bonds. Yeah, that's incredible. It really does. And, you know, like we said at the beginning of this conversation, there's absolutely a ton of risk there. Of course, there is, especially when it's your first time and you don't know what you're doing. But now you've been through the rigor to say the least. You know what you're doing. You've experienced the good, the bad. And now that you know what the downside looks like, and you've also seen what the upside can look like, man, you've seen what success can look like. And so when you take that red pill, it's hard to look away. It's hard to, you know, not see the world for what it is. Can't unsee it now. That's the thing. So my year back in corporate has been a blessing because it stabilized me. But it also, like when my manager says we need to meet on Friday, I'm being summoned. Oh my God, what is this? But hey, humble pie. I'm doing the thing. And so I'm performing. So thank God for that. And so nobody bothers me, you know, that I mean, look, I'm at home right now. I'm able to do this. You know, now after this, I'm putting scrubs and I'm going to

the hospital because we're probably going to go late and I'm going to get my team out. You know, so that's the trade off because I have to remind myself, like when I'm doing these late surgeries, nine o'clock at night, and I'm tired, I'm like, what would I do to stabilize my family and make sure everybody's, I'll do anything. So I have to, I have to remind myself that. And that just speaks, that just speaks to the integrity too, because like, when you were at your bottom, like, you're your friends, your contacts back there, they're like, Hey, we're going to help you out, we're going to get you in here. You know, we're putting our neck on the line for you. And you're like, Hey, I've now recovered, but you were there when, when I needed you, and I'm not going to ban you now. So I'm still in there. I'm still doing the work. That's right. That's exactly right. Incredible. Thank you, man. Man, you've got an incredible story. Absolutely incredible story. So let's, let's pivot just a little bit. Let's talk about, you know, what the next chapter looks like. You mentioned you've got a couple of companies you're looking at. But you also told me that you're trying to help other people. So what are you thinking about how you can help others

to be successful and not experience some of the same issues that you did? Yeah. So, you know, when I started this whole journey, I was, I always envisioned Syndicate Venture Academy, something kind of like, you know, the communities that you see out there. And that this was going to be my way of giving back, paying it forward, like it was done for me, if I could help be a catalyst for somebody. Over the last couple of years, because of the story, I've been on a couple of podcasts, you know, I get a ton of incoming people, hey, can I pick your brain? Can I do this? Can you help me out with this problem? And I do it. And I've spent countless hours. I used to get in trouble by my team. They're like, dude, we're over here with a $200 million term sheet. We're both about five companies and you're talking to somebody about what an LOI is. But that's where my heart is. I'm like, that's, this is important to me. But now it seems like I'm getting a lot of incoming again. And now I feel like I'm fully prepared to do this because if I would have started this when I wanted to, maybe a year and a half, two years, three years ago, let's say somebody in the court says, Renan, my company is failing.

By the way, what do I do? I don't know. I've had nothing but success. Figure it out. I don't know. Talk to somebody. Now I could say, oh, this, you could try this, you could try. And ultimately, it's not one size fits all. Everybody has a different path to how they're going to succeed. But I could offer you a couple of critical thinking skills to help figure it out. And we could workshop it together. That I, because that's all I did for the last year and a half with Nick and I, we sat back and we figured it out. And the company's still alive. The previous owners have it. They're not cruise control. They have to do some repair on it, but it's still there. And funny enough, so this is, I don't know. There's a lot of ingredients because I've also big lesson learned. I shouldn't have gone so hard in professionalizing the business year one. Maybe I should have saved a little bit of that for year two, year three, and then we would have had more cash flow to protect against. We prettied up that pig so well. Yeah, everybody wanted it

again, right? But so that's another lesson learned. But part of the plumbing scheme is where I will refer some business to that restoration company, you know, to kind of. Wow. You guys are maybe not on good, like, you know, you may friend. You're speaking. That's it. Yeah, because I haven't, I didn't pay them for an entire year. They brought some business in because look, they're very business savvy. They did good things. If we could kind of repair that, I send them business, but keep it separate. We'll see where it goes moving forward, right? Because I feel bad that I couldn't do the full eight million because they had dreams of retiring, too. I'm like, well, you guys kind of f'ed it up by doing this stuff in the first place. You know, next time. So another big point, transfer of relationships, transfer. I trusted too much that the business was just going to come from them instead of really enforcing. No, we're going to do three dinners this week to the next week. I want to meet in person. I want you to handhold and build this. It wasn't like that.

And that to me was a little weird. And that's on me because every time I took over a territory in corporate, that was the necessity. And so that's a big learning lesson on me. Yeah. I take responsibility. But you're learning. Yeah. And that's the thing. It's like, you know, you learn a lot of those issues as you're going through it. And I think that's a great way to kind of, you know, kind of wrap this up. So, you know, for the first time buyers out there, the searchers who have never bought something, but they're thinking about it. And they look at you and they say, "Hey, Renan, I see a guy who bought an $8 million business with actually no money. 100% silver finance and nothing down. I see you. I see your experience. And now you're doing well now, but you definitely hit the valley of despair there for a while. What types of, you know, core feedback advice would you have for searchers just to help make sure that they're, you know, they're thinking about this the right way? Understand your motivation. Understand your purpose. Understand your own vision. What do you want to accomplish? Why are you doing this in the first place? You know, because that needs to be

fully understood. If you're doing this to be multi-millionaire, then you got to look at certain things. If you're doing this for freedom, it's a different set of things, you know. What are your strengths and weaknesses? Who's your team? You know, my strengths, I cater to those. And my weaknesses, I brought people in that, you know, for the weaknesses that I had. Those are the things that you need to have at a bare minimum to move forward and do anything in life, I think, especially by business. No one to hold them. No one to fold them. But that doesn't come naturally sometimes. So having a good community around you and actually understand that if you have somebody in your network that's buying a business and going through it, they're not going to reach out to you. Maybe you should every now and then check in with them and not to kind of check in like, "Hey man, you're a millionaire yet? Have you three x'd it? Are you ready for x'd it?" It's because that, believe it or not, has a counter effect because what if they're having a bad cycle and now you're hitting them with, "Hey, are you getting ready to sell an exit for five x'd what

you bought it for?" That just eats at you, man. But hey, how are things going? How can I help with anything that's going on? Just can you talk for a little bit? I want to know what lessons have you learned up to this point because I guarantee you they have learned lessons and to share that would be important. Those are the kinds of conversations. Community is so important, especially as a business owner and you alluded to this, but you don't realize it until you're the guy or gal in the seat, but it's an incredibly lonely place. Luckily, you had a partner that you guys can at least talk to, but most people don't have a partner and you can't talk to your employees. You can't talk to your managers. You need to make sure that you immerse yourself in a community of other local business owners where you guys can work together and you can trade off thoughts and opinions, but at the very least, have people that you can vent to who actually understand what you're going through so you never find yourself. Like you said, you have people who actually might pick up the phone and call you at what could be the most critical point. That's right. Absolutely. Yeah. Incredible.

Last question. Knowing what you know now, would you encourage a first-time buyer to do 100% seller financing, no money down? Yes. If they could do it at 100%, yes, just do it right. Just like anything, just like if you were going to buy it with a down payment and leverage the rest, if you're going to buy it full on private equity, whatever you do, do it as correctly as possible and go in with a good team and network around you, no matter how you do it. Because I didn't fail at this because of the 100% seller financing. It was the things that happened two and a half years after that led to that. If I would have done that a little bit better, then maybe I would still own it. That's all. One thing I do highly recommend, even if you do come in with a down payment and some sort, I do highly recommend a component of seller finance to protect against the downside, put it in escrow, put it in something to protect

your downside, because have it earn out structure milestones because that gives you the power to say, "I'm not paying because you sold me this, but it's not performing to this." Right. Things like that. I spoke to a lot of attorneys on that and they all highly recommend that, not 90%, but maybe 50%, 30%, 40%. Some percentage of seller financing, so they have a little bit of skin in the game, a little bit of incentive to help you and keep it going. Then finally, with the way things are going now, because I had the opportunity to speak to a lot of banks and private equity over the past couple of days, valuations are coming down. It's harder to get capital. It's harder to get proof for a loan. Banks are becoming T-rex arms. They don't want to put the money out. Creative financing is actually at an all-time high. If you know how to do it, that bodes well for structuring a deal, a fair and equitable deal for buyer and seller. It's not like the evil thing. I didn't get over on him. He didn't get over on me. This is something we

did and it's just, is it hard? 100%. It's not a repeatable thing. I am going to try, but I'm just saying. Fair enough. I am going to try, but that being said, the 20 million and the 12 million, I'm looking for private equity for the classic equity down payment, leverage the rest, line of credit, working capital. That's how we're going to do it. Like you said, you didn't do it the right way. You didn't take shortcuts. You brought in a Q and V. You had legal representation. Like you said now, especially now going forward, I have a dynamic professional team. I'm not trying to bootstrap this from nothing all by myself. So incredible feedback. I appreciate you having me here, man. This was awesome. It's an hour 45. That's why I said that there's no structure here because how do I structure a conversation like this? How do I structure a conversation about a veteran who transitions, who goes to corporate, who does very well, has that red pill moment, dives into entrepreneurship, maybe a startup,

maybe I'm going to buy a company. Maybe I find this 100% seller finance deal. Maybe I experience the deep, dark valley of despair. And then how do I bounce back from that? I can't structure that, man. And that's the whole point here. I am so grateful that you have stepped forward and told your story. And like I said, most people can't. That's the thing. Most people can't tell their story. And the few people who can, there's so much courage there. There's so much courage to step forward. Hey, this is what I did. This is what went right. This is what went wrong. This was the impact. And this is what I would like you to know about it. Incredibly valuable, pure gold. Thank you so much, Renan. Thank you, man. Appreciate it. All right. For those of you who want to reach out to Renan, they can find you on LinkedIn, correct? Like, that's how we connected. Yeah. So Renan Quartet on LinkedIn, yeah. Civic Adventure Group is our private equity firm. And, um, Civic Adventure Academy, you know, we're going live in January. Good community. We'll see. And if you've learned anything, being a part of the community, being a part of other people

who have been there before, that can help you do what you want to do, it, yeah, I can't say enough about it. Incredible. All right. Thanks for being here, Renan. I'm looking forward to meeting you in person soon. So we'll have to make that happen. Oh, the $20 million company is out there in, um, John Wayne Airport, Newport, California. There you go. Irvine. Yeah. Yeah. Yeah. I thought you'd go out there, Huntington Beach, all that. I actually negotiated the terms on a deep sea fishing excursion with the owners. Yeah. So I've been talking to him. So, yes, we, let's set it up. I fully expect that we're going to meet in person. Fantastic. All right. Well, I'll see you soon. Thanks again for being here. And, uh, I wish you nothing but success going forward. All right, Judd. Thank you, man. Bye.