A (2:57)

Interesting.

B (2:57)

And. And I'm seeing this behind the scenes.

A (2:59)

Yeah.

B (3:00)

And I'm like, this is insane. And I'm like, is this, how do you do this? So I'm watching them do it. A lot of them are, yeah, they have, they have money, but a lot of times they're using other people's money.

A (3:11)

Sure.

B (3:11)

They are getting institutions to loan them money. And I'm like, I got to figure out how to do this, but on a much more manageable scale for me.

A (3:19)

Yeah.

B (3:19)

And that's. So I was only there for about two years and during that two years I'm kind of watching this happen. I start reading books. There's a great book called Buy Then Build by Walker Dibel and kind of kind of outlays the way to do it if you don't have a bunch of money. And that's kind of how I started doing it. Started an 18 month journey and by the end of it I was able to get my first acquisition done.

A (3:41)

So the thing out of my, like the thing that caught my ear immediately what you talked about is they were using other people's money. Yeah. I come from the real estate space. That is my main strategy in business. Right. I own different stuff now because I've been in business so long. But that is the normal world we live in. Right. Whether it be banks, which is just your traditional bank hard money lending, private money lending, doing syndications. Real estate in general is known to be using other people's money. It is interesting to hear this side of it where you are finding other companies use other people's money by other companies. So talk a little bit about that, are they using more? The, the traditional bank, Are they using more? In our world, we have, like, hard money lending companies. The reason why they're hard money is because they're expensive.

B (4:27)

Yeah.

A (4:28)

Fast and nimble and easy to fund. Are they using private, Are they raising fund like a PPM to go acquire these type of companies? How does that kind of structure work at the, at the larger scale? Right. Like you said, they're, they're buying 10, $20 million companies. How do they structure that? Or is it just more bank financing?

B (4:45)

Yeah. So. Yes. So the larger you are and the higher your net worth is, the more options you have when it comes to financing these deals. So a lot of these guys already had big, big real estate portfolios because they, they made all this money and they're parking it in different assets. Right. And they'll be able to lend against those assets. And so when you do that, you're going to get better rates because there's collateral. Right. And so a lot of times, if they're looking for a 5 million or $10 million to go and acquire a 30 or $40 million business, they're going to look at their, their current portfolio and say, hey, I have these three businesses. Here's my balance sheet. Here's these three apartment complexes that I own. Going to use that as collateral. Give me $10 million at whatever interest rate. Right. That's, that's going to be definitely cheaper than most people are going to get. Like, you know, if you're just working your typical 9 to 5 and you want to get a business loan.

A (5:31)

Yeah.

B (5:32)

And so they're using those assets to get the money to be able to go and purchase more. Now, if you don't have the level of assets that they have, and you're just starting out, there is a program, and I talk a lot about it on my social media and a lot of my students are utilizing.

A (5:46)

Make sure you're following this man right now. Make sure you go follow Ben Kelly.

B (5:49)

And that is called the SBA 7A loan. Okay. Right. And it's, it's a specific acquisition loan. So the program was made for just the average Joe and Jane to go out and buy business.

A (6:00)

Okay.

B (6:01)

So you actually can't get these loans if your net worth's too high. So, yeah, if you have too much money, they might give you one.

A (6:06)

Yeah.

B (6:07)

And so it's only for people like typically 5 million or less in net worth.

A (6:10)

Okay.

B (6:11)

And this loan is able to give you up to 90%, sometimes up to 95% leverage on the Deal on the purchase price of the pro of the business that you want to buy. And so when we're talking about other people's money, most people in the space are utilizing that program to get a deal done.

A (6:27)

SBA 7 SBA.

B (6:29)

7A.

A (6:30)

7A.

B (6:30)

That's the acquisition. SBA has a bunch of different types of loans.

A (6:33)

Yeah.

B (6:33)

7A is the acquisition one.

A (6:35)

So what does someone need to qualify? Let's say we're speaking to the fledgling entrepreneur. They own a. Whatever type of business and they do want to go like, what are typical qualification metrics that a newer entrepreneur, they don't have the big net worth. What do they usually need? Is it just credit court, credit score based? Is it bank account is a combination of both? Is it, you know, P L driven based around the company? Is it all of this? Right. Or yeah, you know, how do they look at that?

B (7:04)

Yeah. So it's, it's gonna be. So there's two. There's the business side of it. Right. So the actual deal you're bringing to the bank is going to be a large part of whether they're going to finance it or not. But you're also a pretty significant portion of that calculation. So if you're looking at kind of your own personal scorecard, they want to see credit score above 600. Okay. Okay. Now can we get a deal below that? Yes. If you have a lot of assets. Because they're looking for collateral.

A (7:28)

Yeah.

B (7:28)

So 600 or more. They're going to want to see some collateral whether it's a home that you own, whether it's money in your 401k account, whether it's gold, crypto, whatever the case may be. They want collateral. And now the, the amount of collateral really depends on the deal. If the deal. Because you might buy a business that comes with real estate.

A (7:48)

Yeah.

B (7:48)

It might have trucks, it might have heavy equipment. And right there you may have 75% of the deals already collateralized by the assets of the business.

A (7:55)

Random question. Can you write those? Is that a tax write off still?

B (7:57)

Yes.

A (7:58)

I know in my world I can go buy an oil rig or a, you know, whatever. That's a tax write off to me.

B (8:03)

Totally.

A (8:03)

In this acquisition of a company that has those type of assets, is that also a tax write off?

B (8:08)

So. Yes. Like for instance, I just bought two semi trucks this past year. Okay.

A (8:13)

Right.

B (8:13)

And I have a company that manages them. And, and they pay out weekly cash flow. Both of those are 100% write off. Right. From the depreciation. So there's some businesses like that, trucking companies, other things, when you're buying certain assets, you can fully depreciate in the first year and kind of write those off.

A (8:27)

That's great.

B (8:28)

Okay. But not every company. Right. So, so anyway, the, the way you structure those deals is they're, they're looking at you, but at the end of the day that, that deal still has to pencil where they want to see above a 1.5 debt service coverage ratio on that business and they'll do lower. But again, there has to be way more collateral. Right. Because the risk is going to increase. They want to see more collateral.

A (8:51)

That's right.

B (8:51)

Yeah.

A (8:51)

So it, in some sense, what you're saying is very familiar to me.

B (8:55)

Yes.

A (8:55)

With real estate, there's not a lot of difference. So in your business you're not, right now you're not going after 10 or 20 million dollars.

B (9:03)

Okay.

A (9:03)

What is your ideal avatar of something that you, Ben Kelly, would like to go acquire?

B (9:07)

Yeah. So I'll give an example. So right now I'm focused on all of my acquisitions are on accounting firms. And we're doing a roll up in the accounting firm space. So the typical deal is going to be between one and two and a half, $3 million. Right. Now, the reason why I focus on accounting firms and this is free for all you out there and it's, it's a great, in my mind, it's a great deal because the typical business acquisition is going to be a small business is going to trade a 2 to 4x multiple of the SDE or cash flow. Okay. And so between 2 and 4x, the difference between the 2 and 4x is really if it's, if it's owner operated and the owner's working 60 hours a week running it and you're basically just replacing them, that's going to be more like a 2x business.

A (9:51)

Right.

B (9:51)

If it's a 4x, that means that they have a team that's managing all the day to day. The owner's kind of semi absentee. He's just maybe working on some high level strategic stuff that'd be more like a forex.

A (10:00)

Yeah.

B (10:00)

Right. But there might be the same business, same size revenue, same everything, but the price to be wildly different on how it's run. So when we're looking at this, an accounting firm, they don't trade at 2-4x cash flow, at least not where I'm buying it. They trade at 1x the previous year's revenue. And so if they did $1 million of revenue, it's going to sell for $1 million. Now the cool thing about accounting firms is that the cash flow typically where typical small business is 20%, 25% profit margin, a $1 million accounting firm is probably doing around 40% profit margins. Yeah.

A (10:34)

Because that's probably a solopreneur. Right.

B (10:36)

So if you're at a million dollars, typically you have multiple accountants at that point. You do, yes. Usually you have, you, you usually have a head, the owner, he usually has another accountant, CPA working with them. And then they have support staff. A couple, maybe a couple easy.

A (10:51)

And that's a million. And so that million based on cash flow brings in net 400 grand around, give or take. Yep. And typically that business owners taking that as income.

B (11:00)

Correct?

A (11:01)

Okay, yep. And then you would come in and say, hey Mr. Accountant, I'm interested in acquiring you.

B (11:07)

Yep.

A (11:08)

You would give them what would you give them? The 4x?

B (11:11)

No.

A (11:11)

What would be your offer?

B (11:12)

I'm going to Give them the 1x the previous year's revenue. Okay. Right. Now if they're a really great accounting firm and in the accounting firm space, if you're mostly online based, where people don't have to walk in and like, you know, the classic can't do their receipts and everything else, if everything is done online through the portal and they have zero where they can be 100% remote, now that is, that's going to trade more like a 3 to 4x.

A (11:33)

Okay.

B (11:33)

Right. Because now that's seen as an even higher than that because it's subscription. Basically the way that those models work is recurring revenue, especially if you're doing bookkeeping.

A (11:43)

I love that.

B (11:43)

And yeah, so those trade at a much higher multiple. If you're just talking about a typical tax firm that we all think about, where 70% of the revenue comes in Q1 in taxes, those are going to trade at 1 extra previous year's revenue. But if you take those and you put them all together and our goal is to get to around 10 million in EBITDA. That's, that's the goal. And right now we're, we're at around 3 million EBITDA. So when we hit the 10 now you have enough interested buyers that will pay you anywhere between a 10 and a 12X on that EBITDA.

A (12:13)

Right. So then you get the $100 million exit.

B (12:15)

Correct.

A (12:16)

Because you have a 10 million, it.

B (12:17)

Only took you about 20 million to get there.

A (12:18)

That's amazing. Yeah, I mean that the appeal of this always to me, like sometimes I'm like, why am I in real estate? This Is because I understand what you guys are doing.

B (12:28)

You know, it's very similar.

A (12:29)

It's very similar. So you're going after the exit. Your pitch to said owner, stay in the game with me for three to five years. I'll buy you now, I'll give you the million dollars or 400 grand or whatever the case is. Stay in the game between us, we'll run it up to a 4x EBITDA and we'll have a pay and we'll have exit. Is that typically what?

B (12:53)

Very, very close. So typically we're asking the sellers, we're not giving them equity in the deal. So we're buying a hundred percent of the company. We're going to be doing at least 20% seller financing. So. And we. We're asking them to stay on for at least two tax seasons. Okay, so that's the goal. Stay around for two tax seasons. That gives. One of the downsides of the accounting space is that there's a shortage of CPAs that are graduating because no one wants to become CPA.

A (13:20)

That's right.

B (13:20)

And so every CPA, you know, is like 60 plus years old. There's very, very little new blood coming into it. So to hire someone to replace him in two years, it takes time and it takes a lot of incentive. And so because the big four, you know, you got your KPMGs or Deloitte's, they're going out there, they're offering these guys coming out of college six figure salaries to join. Now they work them like workhorses and work them to death. But you're really trying to go after those entrepreneurial accountants and saying, okay, you're coming out of school, get them nice and young. If you come over and work for our firm for the next few years, you're going to get equity. We can offer them equity coming on. Right. And we're going to be exiting, let's say in three to five years from now. And you're going to be able to get a piece of that, that multiple arbitrage. When, when we.

A (14:05)

So they do get an upside on the.

B (14:06)

Yes, for the ones that. Come on.

A (14:07)

Yeah.

B (14:08)

The ones that are selling, we're not giving them anything. Do you.

A (14:11)

So you ask them to. Two years. Do you pay them for the two years?

B (14:14)

Yes.

A (14:14)

Go ahead.

B (14:15)

Yes.

A (14:16)

So in an ideal sense, you're really looking for the people that are tired. Yeah, I mean, at the end of the day we all get tired. I mean, you have a burnout in the right day. You call me at one point. Yeah, I'm Going to buy, you know, y. These individuals really have a way out. Finally, it's interesting to talk about like no new cps. There's not a lot of fresh blood, do you see? And obviously the key trigger word is AI. Do you see this really playing a big effect? Because I think there's a lot of people who would they think, and I don't know if I have the answer either, but they think there's a lot of industries that are somewhat insulated and or protected. To me, accounting is kind of a spreadsheet math problem which tends to lean itself I believe to like technology and AI to be able to do that. Do you see AI playing a big role in, in replacing accountants?

B (15:10)

Yep, I do. Now it's the degree is the matter of how much. Right. So as far as like bookkeeping goes and in a large part of even figuring out like what's your tax liability you have at the end of the year, I think AI is going to play a huge role in that.

A (15:26)

Huge.

B (15:27)

Now the part that I. Unless new legislation is passed, which eventually there will be a lot of, it's the liability side of it.

A (15:34)

Right.

B (15:34)

So right now you can have AI do your taxes and then sign off on it and then there.

A (15:42)

Right.

B (15:43)

There's no liability. Yeah.

A (15:44)

Who's coming after a bot?

B (15:45)

Correct. And so the CPA starts to sign off saying, you know, my Bob Smith did my taxes and he's writing his name next to it. So if I get audited or something happens, I can say, well hey, he was a cpa, he did all this. And there's a. He has some level of responsibility for that product. There's going to have to be legislation that has to pass and it probably will eventually where that would have to be addressed before the whole human element can really be taken away from it. Now in the meanwhile. Absolutely. And I think the smartest accountants out there are utilizing AI to be able to get the grunt work out of the way. Because these guys, it's a sweatshop for during tax season. I mean I'm sure when you talk to your accountant, he's literally working a hundred hour weeks and as soon as they're done, I mean they take like a vacation because they're about to jump.

A (16:31)

Off a bridge and deserve. Right. I mean especially the solopreneur owner, operator. Oh my God.

B (16:36)

Oh yeah.

A (16:36)

Insane.

B (16:37)

It's insane. And so those guys 100% should be utilizing AI and they can. And they're going to make their lives much easier. They're going to get out a Better product, they're going to get it faster. It's going to be better customer service. So I think the play here is being able to take all these firms that we're buying because none of them are using AI. Putting them all together, utilizing now AI to really reduce a lot of the unnecessary expenses. There's going to be a lot of extra. There's going to be roles that just kind of get eliminated because there's no need for them anymore. And you're going to make that way more profitable, better communication with clients, and really you're just going to have your top level, more strategy, customer facing. Because at the end of the day, this is people's money.

A (17:21)

Yeah.

B (17:22)

And after their family, like, money is the second thing closest to them. And the person who kind of helps you with that money is also in your inner circle. People tell their accountants things that they don't tell anybody else. Right. And so they still want that person to talk to.

A (17:38)

Yeah.

B (17:38)

And to be like, you know, and have that relationship with where they can come up. If it's just a bot, there's still that. It hasn't crossed that, that barrier yet.

A (17:46)

Where I would tend to agree for sure. I mean, first of all, your point about, like, the licensing and liability. What's the government gonna do? Hey, bot, you're. You're dead now. Like, what do you like the bot? Anyways? So, yeah, I, I think that for sure has some sort of installation for CPAs. Have you thought of, and maybe you're already doing this. Have you thought of starting, like, educating CPAs on how to use AI in their business? Or are you kind of saying this is my secret sauce and this is what I bring to the table for these CPAs. Yeah, I, I don't know. I mean, I think you could look at it both ways and maybe you're doing it, but, like, I think there's a world where you could be like the key educator to say, hey, solopreneurs, the, the operators, like, don't let me teach you how to embed this. So you don't need four or five people and staff. You lower your overhead. I can buy you for more. You need to implement this. And then you have someone already kind of using your strategy that you can then go make the offer. And I don't know, is that a pretty good idea?

B (18:43)

I think that's a great idea. And no, I'm not doing that. I've not thought of creating a service outside of what our initial plans are to do with their own acquisitions. Yeah, but do I think that's a viable offer. Absolutely. Yeah. I think you can easily, I think you can easily make an offer like that and just cold, you can go cold calling and cold email that offer to thousands of accountants and I promise you you're going to get a huge hit rate. So for anyone listening in the audience, like if you have the wherewithal, you're smart with AI and how to automate, that's an audience that will definitely listen to you because it would make their life so much easier. And they know it. They just don't have the time or the bandwidth to, to deal with it because they're just so stuck in the day to day of doing taxes and bookkeeping and just trying to keep ahead of their deadlines. That's, that's all they think about.

A (19:31)

Yeah, I think, you know, if someone was able to teach them, they become better acquisitions for you, wouldn't they? If someone had some level of this ingrained in their business, then you can say good job.

B (19:41)

Yeah.

A (19:42)

Because of that I can make a couple tweaks, I can create some efficiencies with it. But now I can give you a better price because you can run further faster.

B (19:50)

Yeah. If you're an accounting firm that is already utilizing AI to its max ability, you will be able to ask. It won't be just the typical multiples. You can state your price, people will buy it. Now here's the crazy thing, and this is a good and bad thing for me because I'm still probably two years away in our roll up to hit our mark and to be able to sell. Right. Because even after I get the 10 million EBITDA now I gotta take 20 separate accounting firms and make em into one company all on the same systems. And that's gonna take time as well.

A (20:20)

Yeah.

B (20:21)

So but right now multiples in this space are just going nuts. And even for small ones, even if you're doing a million in EBITDA, where typically that would be like a 4x in the accounting space I've seen people getting offers for 5, 6, 7x from private equity.

A (20:36)

How do you think?

B (20:37)

Because the same thing I'm seeing on, on the, the arbitrage and what you could do, PE groups are just all in, in the accounting space right now they see it that the most of the demographic has to sell. So there's hundreds of thousands of these coming on the market. None of them are utilizing AI, none of them are using any of these systems. And PE groups have the same idea that I do. They're just gonna take These, they're gonna package em up, they're going to. Cause it's, it's recurring revenue. It's not going anywhere. Session resistant people. Taxes aren't going anywhere. And so this is an industry where they feel safe deploying huge amounts of capital. So hopefully that gold rush is not done by the time I'm actually two years is short. Two years. It is a short cycle.

A (21:16)

If you look at what you've already done in your career. I mean, two years is a very short window that. You know, I heard something recently from a friend of mine about. There's a long story to it, but essentially long story short is whenever you are trying to build up, you need to simultaneously build down. And that is what I think most entrepreneurs like yourself, and I'm not saying you're doing this, but they forget, yes, I want to go acquire, but they forget to build the infrastructure to support the acquisitions. And I feel like I've made that mistake in 2024. I made that mistake in a very big way in my real estate company. I was running so fast that I wasn't building down at the same way I was building up. Right?

B (21:56)

Yep.

A (21:57)

And so I think some of this is people need to start to also protect their downside with, with the speed of, of what you're able to do. Because you have this right. Just make sure you're able to support what you can go acquire.

B (22:11)

Yeah, I think that point. So it's key because the best companies out there that actually have longevity and that's the thing that, you know, I was actually having this conversation with my wife like a week ago because she's always, you know, my wife is way smarter than me and she's definitely a sounding board and I'm always giving her ideas and stuff.

A (22:29)

I feel like every man says about the same.

B (22:31)

I mean it's way SM.

A (22:33)

Yeah. The reason why, yeah, I married up, man.

B (22:35)

I 100 married up. And I'm all. But she sees I'm, I'm constantly pushing.

A (22:41)

Right.

B (22:41)

And I think most entrepreneurs are like this, right. And she's like, you know, he basically was asking like, hey, you've already built, you've done well, what is it enough or this or that. And I was thinking about it because for me, at the end of the day it's, it's not. Money's not the motivation for me. Like the most important thing in my life is my faith. And then what can I do with the blessing that of the money that I'm making to bless other people? Give it out. See where it goes and grows and be able to affect people's lives. That's what motivates me. But I was thinking through it and I'm like, you know what? It's, it's. I guess there's a part of me that thinks like this is, this will come to an end if I don't continue to build and go and go and go and then something's going to happen. And you know, when blacks want a van or this or that or people are not interested in business acquisitions anymore, none of that when I think through it really makes any sense. But there's a part of me that, that gives into that.

A (23:38)

Sure.

B (23:39)

To where it's like if I stop, it's gonna, everything is gonna come crashing down. Right. Like I have to keep pushing forward. And I think to combat that is your point where the best companies are not necessarily the ones that are constantly taking you ground. Constantly just doing more and more and more. They're building their leadership underneath them. Yeah. They're able to replace themselves constantly to where they could leave be gone. And that thing is going to continue to push forward because of the legacy you've left behind. The systems, the processes, the people. Like you said, that's the part that sustains you.

A (24:17)

That's right.

B (24:18)

And that's something that I pride myself on. I have a great team and I don't operate the day to day of the businesses I buy. But I think in a more macro sense, I think that as entrepreneurs like that needs to be your priority before you can run you, you need to build that infrastructure that's going to be able to keep pace with you. Otherwise it will come crashing down on you.

A (24:40)

And I think a reminder, we have to look at ourselves in the mirror.

B (24:42)

Yeah.

A (24:43)

Because tomorrow you can get a call that might allow you to go buy seven different accounting firms. And then you got to remind yourself like, am I ready for seven more on top of what I already.

B (24:52)

Right.

A (24:52)

And that's hard for us. Dude. That is a very difficult thing. Essentially it's what happened to me in 2024. What I now how I phrase it is. Just because I could doesn't mean I should.

B (25:02)

Yeah.

A (25:02)

Right. Just because I the opportunity and I could have done it, did do it. And then I realized, oh no, my foundation is not deep enough to be able to take this on. And now I have to deal with all that.

B (25:12)

Right.

A (25:13)

And so that is the. One of the harder self actualization parts as entrepreneurs that we have to come to realize is just because you're talented, well spoken Good looking, hardworking, you know, all these attributes and then you go, I'm not going to take that on because I can. I'm going to take it on because that's the right actual move.

B (25:33)

Yep. Yeah.

A (25:34)

And being able to do stuff like that I think is, is really paramount to what this whole podcast is really about, is helping people understand these things.

B (25:42)

Yeah.

A (25:43)

So what is 2025, 2026 you just already kind of said you have a two year run. What you believe you'll be able to achieve the 10 year or a 10 million dollar EBITDA. What are you doing? Where are you going? What are you looking for? If anyone out there is interested in telling, potentially selling, obviously reach out to Ben Kelly. What you know, if you're an accountant, by all means you already know where he's at. Ben Kelly1 Instagram. Where else could they find you? What is there a website they should go to find you on Instagram? Go to LinkedIn. Where, where should they go?

B (26:13)

So on all the social media you can find me on LinkedIn. Ben Kelly on LinkedIn But Ben Kelly Co is kind of my website and that'll kind of get you in contact with me in a couple different ways. Nkelly1 on x or on ig those are big platforms. But as far as like over the next two years, so obviously I just laid out on my acquisition side of focusing on the, the accounting firm rollup. Another thing that I'm doing that's I'm actually probably launching in the next 30 days or so is I already have a newsletter called Acquisition Ace which just talks about acquisitions and I'm going to do another newsletter and it's going to be called Alternative Ace and it's where you're in a spot where now you've made, you're making cash flow whether it's from real estate businesses or maybe just a traditional way and you're retired and you have a bunch of cash and you want to do better than the 10% in the market or whatever.

A (27:04)

Yeah.

B (27:06)

And so over the last few years I've had a lot of cash coming in and I've instead of putting it into like a high yield savings account which is basically just keeping up with inflation at this point. Yeah. And you know there's, there's some deals on the real estate market but I'm like where else can I put this money to use? And so over the last couple years I've been testing with different alternative investing niches. Right. So think about, you know, we're both wearing watches.

A (27:32)

Yeah.

B (27:33)

Right. So luxury watches, that's a niche that people invest in right now.

A (27:37)

You're singing My sweet, this is my sweetheart song. Right here is the luxury watches. Go ahead.

B (27:41)

Yeah, so as an example, that's one that, that's definitely gaining some steam. There's funds out there where you could invest and you're going to make 20, 20, 25 on your money and they're just basically buying and reselling these luxury watches. People invest, you know that to be true.

A (27:55)

Is there funds out there that are doing.

B (27:56)

Oh, absolutely.

A (27:57)

No way.

B (27:57)

Oh yeah, yeah.

A (27:58)

I just always. Because I'm just a purchaser really.

B (28:00)

Yeah.

A (28:01)

So I just buy them and I watch all these people on Instagram. Like you know they're. They buy them, sell them on the gray market and all this stuff which is great. And they get side. I didn't know there's actual funds that do this.

B (28:10)

There's a couple funds out there.

A (28:12)

No kidding.

B (28:13)

One's called the watch fund but. But right now they're not taking on any new investment. So they're not open. Yeah, but there are some other funds out there and so that's an example. People buy, invest in wine, tequila, fine art. Right. Like things like that. Now outside of those which are definitely. Or exotic cars, that's another one. There's one, there's one that I like a lot where actually got based out of Miami too that is able to. He's a wholesaler basically for luxury cars.

A (28:39)

Okay.

B (28:39)

Like high, like more like supercars. And so there's a bunch of people that are looking to sell. He has a bunch of buyers. He becomes the middleman and basically as the investor into the fund, you're providing the bridge capital between him acquiring that from the seller and then bringing it to the buyer. The buyer already put the deposit down non refundable. So it's already locked in.

A (29:00)

Yeah.

B (29:00)

And so he already knows he has these buyers. He already gets the inventory from the sellers and it's basically a 30 to 45 day turnover period. And so as the investor you basically you put the money up and 45 days later you're getting your money back with the return. Right. So fully paid back with that time. And people are doing it seven, eight times a year. Right. To kind of maximize the turnover of that money. Another great one that, that I've invested into, which is awesome is so you're probably know about private lending space. People do hard money loans. This is now not with real estate though. It's more in small business capital. As well as buy now, pay later but for online coaching. Right. So in the online coaching space. And so there's a company out there that. And I'll ask them. I didn't ask for the permission to talk about this publicly, so. But there's, there's an option out there where you can provide the capital as the investor that is then used for someone to join an online coaching group.

A (29:55)

Sure.

B (29:56)

And. And the, the person who. So the coach gets paid up front and now they're making payments to this person. So the investor who gave them money is now the one getting paid instead. And you're getting. If you're reinvesting it throughout the year, getting 30% on your money every year and it's. You get paid daily. So it's just like daily. Oh, yeah. Because they're.

A (30:15)

That is a big selling point for that company. We'll talk offline about that.

B (30:19)

We'll talk offline about that.

A (30:20)

Ryan Serhan, actually, and I, I just had Ryan Serhan on, if you're familiar with him.

B (30:24)

Yep.

A (30:25)

He said something and we had to talk offline about it. But I'm very intrigued about this because he did the same thing. He made it. He made an investment in this finance company for coaching.

B (30:32)

It's amazing. Yeah.

A (30:33)

And so anyways, keep going. This is the. I didn't, he didn't tell me that, that maybe it's a different company, but getting paid daily is huge.

B (30:40)

Yeah. And there's a. There's another option out there where you're getting paid every month, principal and interest, and you can roll it. So anyway, there's a couple different options in that space. And so I've been testing these things out for like the last four or.

A (30:53)

Five, like with your own money. You're throwing my own money here. You're doing this, you're doing.

B (30:57)

Right, Exactly. And usually typically I'll throw in, you know, $100,000 test or whatever the minimum is. I'm going to test it and then I'll take about six months of data back and be like, wow, that worked really well. Let me put more money in that. So I have right now personally invest in about five or six of them. And what I'm going to do with this is it's going to be. Newsletter goes to a free community. You can see all the things I've invested in, see how much money I've made. You can see that, all the receipts and free for everybody. They just look at it and it's just a one educate and to say, like, hey, there's. There's things outside the Market and traditional ways to put your money in where you can make outsized returns.

A (31:32)

Yeah.

B (31:33)

And it's cool. Like, it's much more fun when you get to invest in. If you love luxury watches and you.

A (31:38)

Put Way more fun.

B (31:39)

Way more fun. They actually, like, really are interested and care about and. And you also know the person who is dealing with your money instead of it being like some nameless, faceless Fortune 500 company that, you know, you're just hoping that they make great decisions.

A (31:53)

Yeah.

B (31:53)

Right. At that point.

A (31:54)

Disclaimer. This is not financial advice. Disclaimer.

B (31:58)

I'm not a financial advisor. Please do not take my advice to go and put your own money in anything else. So anyway, that's going to be a cool project because it's something that. It's been really good to me. And so that's going to be launching in a little bit on that as well.

A (32:14)

What's the. What's the idea behind it? So where do you think that can go? I love that. The newsletter angle.

B (32:18)

Yep.

A (32:19)

You're going to create a free community.

B (32:20)

Yep.

A (32:21)

And then what is this going to be some level of, like, we could all do this together. You end up raising a fund for this and then saying, hey, based around my experience over the last two years.

B (32:31)

Yeah, this is cool. Yeah.

A (32:33)

This is something I definitely want to talk to you about.

B (32:35)

Yeah. The play here, I think, is. Is twofold. One is it starts out with just, here's some cool things that I put money in and have made great returns. And again, not a financial advisor, but you can do it too. Go talk to them and do your own due diligence. And that's one thing. So, one, it gives people options. Because I have people who come to me that it's not the best idea for them to go buy a business. It's just not. And I have no problem telling people when they come to me and they're like, hey, here's my situation. Here's the time I have. And I'm like, yeah, this is not for you. No, I don't want to just give them nothing. Be like, hey, look, you have $20,000 that you do want to do something with. Okay, here's another option. You're totally passive. You don't do anything on your end. Here's how it works, and go check it out. Right. And so I think that's one. Now, once there is enough people in there and I'm going to be. For all my investments, I'm going to say exactly how much I put in, how much I'M making, everyone can see it. And then there might be a point in time where I say, hey, look, I'm going to do this. Right. And. And so if you want to invest alongside of me in this opportunity, we can do that. Right. And now when you do something like that, it's more of like a fund model instead of the minimum being, let's say, 100k for anyone to invest in it. Well, if I'm going to do a fund model, maybe the minimum is 10 to jump in. Right. So now I can bring more people to get into the opportunity that might be something that comes from it. And on the back end, you know, like those. I think the more that, that grows more of these alternative. Because a lot of these alternative investing ideas out there, they don't have followings. They're just a guy who had a great idea, he's been doing it for five, 10 years, has made good money. He has like five, 10 investors that he's kind of pulled in to do it. He wants to take it to the next level. Doesn't know how to go out there and kind of get it out there.

A (34:17)

Yeah.

B (34:18)

And this is a great avenue for them to be like, come pitch it. I look at it, I have my team kind of due diligence on it. If it passes the sniff test, potentially test it out with a small investment, see how it works. Okay, here you now get to go and get access to 10,000 people who all want to put in. Right. And that'll be an access fee that they have to join to be able to have that. Right. So there's a couple different ways to do it, but as of now, there's. There's no monetization behind it. It's just. Just building it out and seeing what makes sense.

A (34:47)

So are you open to take some. Some messages and answer some questions around this? I'm sure this would be very appealing to a lot of the audience. I think that's incredible. And the reason why I say that is because a lot of times, yes, I'm in real estate, so it's easy for me to find investment, to do the investment side. Now, one of the layers of questions this would all consider to be active income in this model for them. Correct. Meaning a lot of it. Great way to invest money to get a higher return, a better return, a safer return. But it doesn't maybe counteract income. In fact, it probably increases income. So you still need to have some level of what do I do now? I made more money.

B (35:23)

Correct. So one of the ones that I actually, I mentioned the trucks before.

A (35:26)

Yeah, right.

B (35:27)

So those are one, that's one of the options inside that I'm going to put in there. So the way that those work is you are, there's a trucking management company, right. And so you buy the asset, you have the title to the truck. It's your truck, they manage it for you. They have a flat, you know, 15% fee that is going for them to manage everything. And they're going to be paying, you know, the drivers, the maintenance, everything else. It's completely passive on your end, right? I shouldn't say completely passive. I got to check in probably to see how things going. You get paid every single week, right. So the weekly cash flow is amazing.

A (36:01)

That's great.

B (36:02)

Also you get the write off against the active income of those trucks. And so it is, it is a way in which for me it's helped out because I'm able to, I'm buying, buying another few trucks here in the next couple of months to offset that active income. These trucks are, I get paid every single Monday like clockwork coming in from these trucks. And you're on the conservative end, you're making at least 50% on your money in a year sometimes like I'm on track to probably be around 75, 80% of my money. Right. And that is going to go continually as, as that truck usually lasts about three years before it needs to be replaced. And so you're typically going to be, even if you just wanted to do for your three years, you're going to make, you know, 180 plus percent on your money or you take those, some of those returns, you're putting them into buying more trucks and you're still making a extremely great return on your money with an asset that's backed, that you have title to and you're getting paid every month. Right. So it's like if you want to be able to, you get five trucks. And most Americans can live very comfortably off of the cash flow, getting paid every single week off those five trucks.

A (37:10)

Now what happens at the end of the lifespan of the truck?

B (37:13)

Great question. So let's say a truck, usually we're getting lightly used one to two year old trucks. That's a hundred thousand dollars for a semi truck after three years of hard use because those things have diesel engines, go over a million miles easy. After three years you can sell that same truck for about $30,000.

A (37:29)

So you have to account for. In your case, I'm doing rough math. Yep, you threw a hundred grand at it. You're getting around 75% return on your money. So you made 75 grand that year.

B (37:38)

Yep.

A (37:39)

So when you sell, you can almost say that first year earnings, which is. Yes, your investment. You get your 30 grand back plus your first year. You made 70 grand. 75. You're made whole year. Two and three are gravy, correct?

B (37:56)

Yes, exactly. Yeah, it's great. Now this model is not new. This, this. There's hundreds of companies that do this. The one that I was able to do this with, where I like them and why the. The returns are been so well is because they did a great job in minimizing their. Their labor costs because they. All their dispatch, everything is. Is outsourced. Right. We're most dispatched in the United States for it is all local and they're paying local rates and everything else like that. When you're able to put that somewhere else outside the US for 20% of the cost. Yeah. Then you can pass it on to investors. Right. So that is, that is kind of their sauce. And they have great systems and processes, amazing contracts like Amazon, Walmart Found mobile. And because they're able to scale that fleet very quickly, can take on very large contracts and do that. So that one has been really good also. That's. They'll be in there with how much I've invested and all the payments I get and everything else like that.

A (38:59)

Yeah. So I just do the math a little bit because I start to think this is why. Anyways, I love entrepreneurship. You go buy five trucks. Yeah, I'm just gonna use 100. I mean, he's all very rough numbers.

B (39:08)

Yep.

A (39:09)

You throw 500 grand at it, you have five trucks. Let's just say you're at a 50 return, which is more typical. So every year you make 50 grand times five. You're making 250 grand a year. You gotta assess about a year and a half of the three years is gonna cover your exit costs. Meaning when you sell these trucks that year and a half get you made whole, then you still have a year and a half of earnings, which is, give or take 75 grand times five. I mean like you said 350 grand a year.

B (39:37)

Yeah.

A (39:38)

Most of America now you need the 100, you need the 500 grand to get going at that. But I'm just doing some rough math of like. And you just rinse and repeat. And as long as nothing changes, which we all know, that's the only constant is everything changes.

B (39:50)

Yep.

A (39:51)

But for a very long time, you have 350 grand of income coming in Every single year. And you're not taxed on it because of the tax deduction of the trucks.

B (40:00)

Correct.

A (40:00)

I mean, that's essentially effectively making almost 700 grand a year.

B (40:04)

Yeah. If we're counting right off on the trucks and everything else like that.

A (40:07)

That is insane.

B (40:08)

Yeah.

A (40:09)

This is the beautiful part of, of entrepreneurship and.

B (40:12)

Yeah, this is.

A (40:13)

Dude, this is wild. What else, what else do you want to let the audience know about what Ben Kelly's up to? I think this is really cool. I think all of you should be reaching out to Ben. Whether it's X, whether it's Instagram. Ben Kelly 1. You have a website.

B (40:26)

Yep.

A (40:27)

Ben Kelly.

B (40:28)

Yep.

A (40:29)

Yep. What else, what else can we talk about that I think is, is prevalent to what you're doing and, and the angle you're going.

B (40:35)

Yeah. So, like, again, I, I think it's, it, it's easy to get caught up in, you know, especially as an entrepreneur. Like I said before, you're constantly growing, constantly chasing the next big thing, constantly. If you're, if you get better and better at it, learn from your mistakes, you should be making more money over time as you continually get better at it. I think the most important thing, though is what, what does that mean to you? Right. Some people, and we all can name a bunch of names that go out there, they kill it. They do amazing work and they grow companies, they make a bunch of money, and yet they're kind of miserable. They're just not people that you want to really be around. And they might be super talented, smart, and, you know, amazing go getter, but you wouldn't want their life.

A (41:21)

Right.

B (41:21)

And so I think at the end of the day, it's really important to focus on the foundation of who you are first. Because I'm sure with you, and I know with me, I've made mistakes, I've lost money, I've been under a lot of stress. Sometimes like two deals that are supposed to close and this falls through. We gotta, we have five days to figure this out. And, and you're gonna be pressure tested constantly as an entrepreneur. There's gonna be super high highs and there's gonna be super low lows. Yeah. And if you don't have the fortitude and the foundation to take a super low low. Everyone can take a high. Right. But if you can't take a low.

A (41:57)

Yeah.

B (41:57)

Then it's, it's. You're not gonna be a. In a better place and you're going to have your family broken apart, relationships broken apart. And so for me, as I mentioned, Before I'm the man of faith, this most important thing in my life, if I didn't have that, I know without a shot of a doubt I would not be sitting here today. I would be somewhere else in a much worse situation, doing way worse in every feasible way. And so I think for me, I talk about in my community, everything else, my faith and how it's changed me. And obviously we have people of all walks of life in my group, but it's. I would be remiss if I didn't tell people, focus on, for me, it's, it's my faith. I'm a Christian in Jesus Christ and focus on that which is going to give you a solid foundation. Also why you're doing this. This is going to give you a sense of purpose. At the end of the day, if it's just to make money, that that is not enough. It's not enough. You have to have something else that's, that's a higher calling than that. And so folk find that and focus on it and get to a part where you're able to surrender to that higher calling. And your relationships, your work ethic, why you do what you do is going to have a higher purpose. Therefore it's going to have longevity. Therefore it's going to be able to build your network and you're going to be able to meet people like I'm sitting across from Joseph right now because of that. And so you'll be a person that's worth knowing. It's not just about the money you have in your bank account. At the end of the day, no one's going to care. Right? But they do care about your legacy that you're going to leave behind and the relationships you do. And so for me, the more that I like, I make a promise if I'm going to sit across from someone like yourself or if I'm going to put content out there, or if I'm going to do anything that's going to give me any kind of views or clicks. I want it to be something that's, that I'm proud of and it's something that's putting out a message that is getting to the heart of why I'm doing what I'm doing. So that, that's probably what I would put there.

A (43:52)

I love that, brother. That is a great way to put an exclamation point on this episode, dude.

B (43:56)

Thanks, man.

A (43:57)

Everybody, Ben Kelly, make sure you are following him. Make sure you're a part of his world. Dynamic. Great individual right here, dude. I appreciate you coming to the show. If you're an entrepreneur, you're looking for different opportunities, looking for tax write offs, you're looking for more income. This guy has a couple ideas that I think are pretty brilliant. In fact, I'm going to be talking more about this. So if this was pretty cool and you think someone should hear this, share this with two more people that you know, some friends of yours and we'll see you on the next episode. Entrepreneur DNA.