bradleyjohnson32

The Skinny on Qualified Opportunity Zones – EP.25

Summary

In today’s episode we’re talking all about qualified opportunity zones — these things are amazing. They’re portions of the country that are economically disadvantaged, and if you invest in those areas you get incredibly favorable tax treatment.

First, we take you through the history of qualified opportunity zones (which has a pretty interesting history in itself!) — then we get to the really exciting part: the incredible tax breaks to be had by investing in these zones and how to go about it. And then, to wrap it all up with a bow, we take you through a real world example to illustrate how it’s done.

Key Takeaways:

[:12] All about today’s episode!

[:55] The history of qualified opportunity zones and how they came about.

[3:31] What an opportunity fund is.

[5:42] What a qualified opportunity zone is.

[7:35] The exciting stuff: the tax benefits from investing in a qualified opportunity zone via an opportunity fund.

[11:51] A quick recap on all the amazing tax benefits.

[12:24] Brad takes us through a real world example.

[16:48] Our final warnings on qualified opportunity zones: make sure it is still a good deal — a bad investment with a good tax treatment is still a bad investment.

[18:57] One last thing you need to remember: you do have to do this through a qualified opportunity fund.

[19:56] Does this all make sense in the private equity world?

[20:41] A final note about qualified opportunity zones on the real estate side.

Resources on Opportunity Zones:

https://www.cdfifund.gov/pages/opportunity-zones.aspx

Opportunity Zones: The Map Comes Into Focus

How to Source Off-Market Deals – EP.23

What an Off-Market Deal is and How to Find Them

Summary

Today we’re talking about how to source off-market deals!

It’s easy enough to go on LoopNet or MLS Deal Finder but anybody can get those deals, so we want to share some solid trade secrets with you all today and help you find those sweet, sweet off-market deals.

In a prior episode, we’ve gone into the differences between off-market and on-market deals, but today we want you to join us to get right into the nitty-gritty of how you can actually findthese off-market deals.

Key Takeaways:

[:12] Our topic today: how to source off-market deals.

[:26] What we mean by how to source an off-market deal.

[1:06] What is an off-market deal?

[2:39] Brad talks about how to find off-market deals in a real estate firm.

[14:10] How to find off-market deals on the private equity side.

[21:10] Concluding this week’s episode and where to find more resources!

Mentioned in this Episode:

LoopNet

MLS Deal Finder

First American Title

LinkedIn

Broker Deals VS. Off-Market Deals – EP. 11

 

Additional Resources For Finding Off Market Deals:

Property Address Databases:

CoreLogic

 

Locating seller resources:

  • Got a name and address, but the person no longer lives there? You can also use the Personator to track down their new location.
  • Need to find the owner of a property? Try the Property Lookup tool.

Mass Mailer Company:

Postcard Mania

 

 

 

 

Brent Beshore – Contrarian Private Equity Investing – EP.20

Today on The Alternative Investor we have our first guest on the show: Brent Beshore! Brent is the CEO and founder of Adventur.es — a private equity firm in Columbia, Missouri. Adventur.es has a unique investment approach: they seek boring businesses. They explain this perfectly themselves:

“Boring businesses endure because they consistently solve a meaningful problem and were patiently built over decades,” “Truth be told, our responsibility is not just to seek and sustain boring businesses, but to be boring ourselves. Boring is reliable, faithful, and predictable. Boring is sustainable. We are committed to doing what we say we would, when we said we’d do it.”

This episode, Brent, Brad, and I discuss the workings of Brent’s firm, how they go about securing deals, their due diligence process, what deals they look for, and how he deals with a variety of situations within the firm. He also gives his views on growth, what industries he won’t touch, and what he thinks about current asset pricing.

Adventur.es has some pretty contrary views and approaches to traditional private equity firms so it was an extremely interesting interview that we recommend you all tune in to this week!

 

Key Takeaways:

[:10] Our guest, Brent Beshore, introduces himself and tells us a little about his background and how he got to where he is today.

[2:28] How Brent started up his private equity firm, Adventur.es, and what they’re all about.

[8:09] About the makeup of Aventur.es’ portfolio: what kind of companies they currently have, what they like, and what they’re looking for.

[11:05] How did Adventur.es get comfortable with some of the more cyclical deals (especially with the pool companies).

[14:14] Does Brent believe that volatility does not equate to risk?

[17:11] How do they have the liberty with their fund where they can hold a deal indefinitely?

[18:58] Are they reinvesting dividends each year?

[19:55] Do they have discretion?

[20:16] Does Brent find that the sellers they buy deals from generally involve competitive bidding?

[24:40] How Brent keeps a sense of urgency in their operation (without the pressure of the 3-5 year time frame a traditional private equity firm generally has with businesses).

[27:37] In most cases, is Brent dealing with the CEO who’s selling the business with a management team stepping up or is he hiring other operators to come in?

[29:21] When the owner is not staying around, and a new management team is stepping up how does Brent keep those people incentivized?

[31:05] Brent’s process of finding deals.

[34:30] If a broker sent Brent a deal he would normally want to buy, but it’s part of a bigger process with multiple firms bidding on it, does he step out?

[37:52] Brent gives us a back-of-the-envelope approach to how he thinks about what is an attractive business for Adventur.es.

[42:31] How Brent thinks about due diligence and the major things that kill a deal.

[46:53] In their due diligence process, how much time is spent within the company internally and how much is spent thinking about the market and external factors?

[50:31] About Brent’s meeting with Warren Buffett.

[52:04] What kind of multiples is Brent seeing in business right now? And how does he think about what’s the best multiple to pick?

[55:11] How much is too much customer concentration?

[57:05] How much does Brent care about growth?

[58:24] Are there any industries Brent wouldn’t touch?

[59:48] How does Brent think about current asset pricing?

[1:03:22] Where to find more of Brent’s content and Adventur.es online.

 

Mentioned in this Episode:

Adventur.es

Brent Beshore’s LinkedIn

The Oracle of Omaha

Why You Should Care About Business Quality – EP.19

Summary

The Three Main Categories of High Quality Businesses — and the One Category You Do Not Want to Invest In

Today’s an exciting show — we’re talking about business quality. Who doesn’t want to buy a quality business?

Business quality is a little bit of an amorphous term, but today we focus on thoroughly explaining what it is and why you should care about it as investor. We also put together a framework of categories for high quality businesses, such as: the organic grower, the mergers and acquisition machine, and the ATM machine (yes, we know that the M in ATM is machine.) And of course, since we talk about the businesses that are the most high quality, we also had to talk about what we call “the valley of death” — the category of businesses that we would never touch.

At the end of the day, any investment you make in a business, you want to get that investment back in the form of cold, hard cash. But to do that, you have to think not just about the price, but about the quality of the business.

Key Takeaways:

[:27] About today’s topic: business quality.

[:41] Why, as an investor, should we care about business quality?

[1:59] Our first category of a high quality business: an organic grower.

[4:52] An example of an organic grower.

[6:48] The second category: a mergers and acquisition machine (“an inorganic grower.”)

[8:57] Some examples of a M&A machine.

[11:01] Our third category: an ATM machine.

[12:38] Examples of an ATM machine.

[14:18] The category of businesses that are (usually) not high quality: “the valley of death”.

[17:49] Wrapping up today’s show with our key point: “quality, quality, quality!”

Debt: If You Owe The Bank $100 Million ….. EP.18

Summary

Today we’re talking about debt! It’s an investor’s best friend … or worst enemy.

We answer all the questions you may have about debt, such as: what is debt? When do you get debt? How much debt do you put on an investment? We also address the various restrictions that come with debt, why you should get debt (and some of the great — and not so great — reasons that can come with it), how much debt to put on your deals, and some examples of how debt can change the return on a deal.

Debt can reduce the amount of cash you have to come up with to buy a deal — but it comes with some promises you have to make to the bank (and other people) that might end up coming after you one day. But, done thoughtfully, it has its place in alternative investments — so tune in to hear more of our take!

Key Takeaways:

[:11] About today’s topic: debt!

[:35] What is debt?

[1:42] Restrictions that come with debt.

[3:10] Some great reasons to get debt.

[4:58] How Brad thinks about how much debt to put on his deals.

[9:42] Brad gives an example of how debt can change the return on a deal.

[13:10] An example in real estate, with the same numbers.

[15:22] Summarizing our key points about debt.