Episode 5 of the Owner Occupied podcast with Peter Lohmann and Russell Lowery. In this episode we discuss:
-A property management acquisition deal that fell through for Peter
-Russell has 2 potential deals, he talks about the risk with each one
-What multiple should you pay for a small business? What are the various considerations that go into a multiple
-Why did Peter lose his property management acquisition deal? What happened, why, could the outcome have been different?
-The risks of buying a small business
(00:00) Intro
(02:17) Background of the property management acquisition deal
(04:10) Why I think we lost the deal
(06:18) Discussion of multiples to pay for SMB
(09:52) What would it mean for my business to manage 1000 doors
(14:12) If I had paid top dollar, would I have made money?
(16:30) Tips for buying a bolt-on business
(18:25) The psychology of doing a deal is intoxicating
(20:24) Clawback provisions in purchase agreements
(21:51) The seller must be motivated for a deal to work
(26:27) How banks evaluate distressed businesses
(27:52) What do I look at during due diligence
(32:43) What about the seller's employees
(35:55) The value of documenting key processes
(37:40) Buying a small engineering company
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Russell Lowery is a political puzzle solver. He runs a California based public affairs company highviewstrat.com. You can also connect with him on Twitter: twitter.com/russelllowery10
Learn more about Peter & how to connect with him here: peterlohmann.com
RL Property Management manages Columbus area rental properties: rlpmg.com