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Benton Moss is a graduate of UNC-Chapel Hill and formerly played professional baseball for five years. He married into a family actively involved in real estate and the interest must’ve stuck as he’s now president of a full-service real estate company. He currently runs two different businesses, one in property management and the other in HVAC and Plumbing. Both work commercially and residentially. Today, he’ll discuss multiple topics with John, such as how the development process works, how you scale in the industry, how you develop an existing asset versus a blank slate, and SO much more.
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Episode 42 Transcript
Brandon Niro: Welcome back to owned and operated where we dive deep into the businesses we own, the businesses we are acquiring, and we also bring on guests to talk about their operating struggles. If you like what you hear today, follow John and Brandon on Twitter. That's John at Wilson companies in Brandon at Brandon Nairo.
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Announcer: Benton Moss is a graduate from UNC Chapel Hill and formerly played professional baseball for five years. He married into a family actively involved in real estate and the interest must have stuck as he's now president of a full service real estate company. He currently runs two different businesses, one being in property management and the other being in HVAC and plumbing, both working commercially and residentially.
Announcer: Today he'll be discussing multiple topics with John, such as how the development process works, how you scale in the industry, developing an existing asset versus a blank slate, and so much more. Enjoy.
John Wilson: It's no secret that Brandon and I have cleaned up a lot of poop in our career. Unfortunately, we don't clean up crappy bookkeeping. That's where today's sponsor comes in. Apple tree business services handles bookkeeping, payroll, and taxes for small businesses. Apple tree business services is the go to choice for growing service companies so they can manage cashflow, know their numbers and save on taxes.
John Wilson: The US based team has taken care of small business bookkeeping and taxes since 2005. Find them online at AppletreeBusiness. com or email Patrick at AppletreeBusiness. com. Welcome back to Owned and Operated. Today I have Benton Moss on with me. Hey, Benton.
Benton Moss: John, good to be here, man.
John Wilson: Yeah, this will be fun. I get to be on the opposite side of the interrogation this time.
John Wilson: Benton and Victor had me on their podcast, Circle of Competence. Thanks. It had to be like nine months ago.
Benton Moss: It feels like last week, to be honest with you, but time flies, man. Yeah. I think it's probably at least nine months. I'd have to go back and check.
John Wilson: Okay. All right. Yeah, same, but yeah, so this is my turn to turn the mic back around, which I always enjoy doing to other folks that run podcasts just cause they know the other side and it's fun to grill them.
John Wilson: But how about you give us a little bit of a primer on what you're up to, what you've been up to for the past year and. Where you been?
Benton Moss: Sure thing. Just first off, I'm humbled that you even asked me to sit on the other side because I've, Victor and I've had the distinct pleasure of interviewing you, obviously, and a number of other great guests.
Benton Moss: And so I feel as Warren Buffett would say, he likes to search for six inch turtles. I'm probably the six inch turtle relative to some of the guests you've had here. So appreciate you asking me on, but I'd say before you get to maybe the last year, I'll just give just a brief overview of maybe the last.
Benton Moss: Five ish or so, so graduated from UNC Chapel Hill go heels were recording this, maybe a week or so after the terrible national championship game. So pretty sad still from that, but graduated in 2015 played baseball. There ended up going to play professionally with Tampa Bay Rays organization for about five years and took a real interest in investing and particularly in real estate.
Benton Moss: While I was playing just so happens was very blessed to marry into a family that actually was active in real estate at the time. So I would call my father in law one of my biggest sort of business mentors. So he helped us, start searching for some investment properties and maybe five years ago, much easier to pick up single family rental deals than it is today.
Benton Moss: It's very difficult really to find anything. I would say pencils out to be a true deal. You have to either develop a deal or you have to do some sort of value add to the property. But anyway, so we started acquiring just some single families back in the day and five years ago or so, it kept rolling that forward.
Benton Moss: I ended up retiring in 2019 and went into real estate development with a shop out of Raleigh, North Carolina called Kane Realty. They're a great place to start. Wonderful development firm. I really got to cut my teeth and see a lot of the inner workings of what, a vertically, what I would consider almost vertically integrated development shop looks like, they do commercial and residential leasing, property management, construction management, and development.
Benton Moss: So they just, they make money on these deals, five different ways. And it's just a phenomenal shop up in Raleigh, they've developed, I don't know, close to Two million plus square feet mixed use retail and commercial and office and residential. So I worked there for about a year and a half. And my wife and I had a child and we decided we wanted to be closer to family.
Benton Moss: And so about a year ago, I purchased a property management company back in my hometown in Rocky Mount, North Carolina. It also had a. Home services business HVAC and plumbing that was a subsidiary of that has continued to grow and it's its own business in and of itself at this point. So right now I run two different businesses.
Benton Moss: One's a residential and commercial property management company and the other is a residential and commercial HVAC and plumbing services company. Last five years, my wife and I have been in close to 28 states, including, all the baseball travels and whatnot.
John Wilson: Yeah, that is a lot. There's a lot going on there.
John Wilson: So like 28 states, was that just, that was games. That was all that stuff.
Benton Moss: Yeah. Just travel. I played in the New York pin league, played in the Florida state league, played in the, what's called the Southern league. So it's double a down in Alabama, Tennessee, Mississippi, Louisiana. Yeah. I think I said Tennessee, so North Carolina, Virginia, all the way up to New York, and over to, actually to Ohio, and over to Ohio yeah, a lot of states, a lot of travel, a lot of baseball, for about five years.
John Wilson: Yeah, I just met someone else that was in, I think they were in minor leagues, was this minor leagues?
Benton Moss: It was, yes.
John Wilson: And it's a wild journey, I think baseball especially, because it seems like you guys go somewhere, and maybe correct me if I'm wrong. But you guys go somewhere and you stay there for a week or 10 days.
John Wilson: Cause you have to play seven games or 10 games versus basketball, where it seems like you only go somewhere once and then, you go home.
Benton Moss: Yeah. Then you bounce. It's actually nice and double a, if I remember right, we would go and stay for five days before that. You would go for three days. So the first day you would drive in, you'd play that night.
Benton Moss: You'd stay that night, play the second day. Then on the third day, it was what's called getaway day. So you would leave, right. And go to your next stop. And that was, you weren't there long enough to really settle in, but five days, like a 10 day road trip was, it was fun depending on the place you were really going, right?
Benton Moss: If you're going to Birmingham, Alabama, it's fun. You're going to Jackson, Mississippi was okay. If you were going to Jackson, Tennessee was not okay. Basically your choices for, breakfast, lunch and dinner were like wobble house and some random burger place for five days. So it's definitely a unique journey, for sure.
John Wilson: Are you still friends with a lot of the guys you played with?
Benton Moss: I am. Yeah. Several of my best friends have been fortunate enough to make it to the big leagues actually last year. Got to go out to Miami to see one of my buddies who debuted last year for the Marlins, one of my best friends from Carolina.
Benton Moss: Yeah. So I've gotten to see that a couple of times, which is just special to celebrate. Somebody. Filling their childhood dream, right? Fortunately, I didn't quite get there. I retired. I had a back injury that just kept plaguing me. So it was time, if you're single and you can grind it out for a long time, great, it's tough when you're, when you want to have a family and kind of settle down, so it's not, that lifestyle is not conducive to that.
Benton Moss: So it was time to move on, but yeah, it's been great. I keep up with a lot of good friends that are either in triple eight at this point, some are out of the game at this point. And a few have made it. So
John Wilson: yeah, that's awesome. That's awesome. Can you walk me through? I don't know basically anything about development.
John Wilson: So explain this to me like I'm a five year old or maybe an eight year old.
Benton Moss: You acquire the land. You get it entitled. I should say you control the land. So maybe that's acquiring or optioning. You get entitled. You get the plans ready, you get the budget ready, you build it, you lease it, you refi, or you sell it.
Benton Moss: That's pretty much, high level what it is like to go through, entire development process. Now, if you're going to break that down, some of these bigger developments can take four to five years just to get to, Permitting and construction, then construction is going to take you another 18 months.
Benton Moss: Then from there, you got to go into lease up and that can take six to 12 months, depending on the mixture of commercial with residential. Like one of the projects I worked on the residential leased up in six months or less. It was crazy, but the commercial was super slow because we were in the middle of the pandemic.
Benton Moss: So nobody knew what was going to happen to retail office is still a head scratcher. Who's going to offices nowadays. Yeah. It just depends on the type, but basically, development is trying to figure out what can fit on a parcel or what amount of money and what kind of yield can you get out of it, right?
Benton Moss: And ultimately, it's the yield that kind of determines will the deal go through and can you get it financed or not, right?
John Wilson: What's the hurdle?
Benton Moss: It depends. It depends on the size of the deal, like some of the deals we were underwriting and Moses Kagan, if you're interested in development, he's written a lot of this down on Twitter and over the years in this blog, I highly recommend checking out the stuff he's written, but we were underwriting to like a six and a quarter, probably two years ago.
Benton Moss: It's probably compressed from there. At this point, cap rate, sorry. This is cap
John Wilson: rate? Okay, gotcha.
Benton Moss: Yeah so no, it would be a yield on cost. So let's just say you spend 100 million, your net operating income, so that's an unleveraged basis, after all expenses paid before, debt service would be 6. 25 million, right?
Benton Moss: So it would be unlevered, basically if you're buying a 100 million bond, it's going to give you a six and a quarter yield unleveraged, right? And there's two types of developers. The most common is the merchant developer, who's just going to build it, lease it up, and then sell it for, for whatever, for hopefully the highest amount of money they can possibly get.
Benton Moss: And there's a spread between obviously what they sell it for and what they developed it for. And then the much smaller Sort of subsection of developers are just the build to hold. They have a lot more patient money. A lot of times they're looking for bigger spreads between the yield on costs and what they can actually finance it at.
Benton Moss: A lot of times the merchant developers are just looking to get it out of the ground, get it leased up, get it sold as quickly as possible and just try and turn their capital. And that's, generally dictated by like the investors. They're in the deal. So my cane, they have a lot of institutional investors, so they're expecting to get their money back.
Benton Moss: Therefore, they would tend to sell their projects after about three or four years.
John Wilson: These are like long term, seems like a feast or famine type thing. Like you're struggling through it, you have a liquidity event, you go to the next one.
Benton Moss: Yes, except so for pure developers. Yes. That's why they are always developing because if they're not developing, they're not making any money.
Benton Moss: What I always liked about Cain's model, which is and we'll get into this later in the podcast, but it's why I wanted to buy a property management company first is they just like everybody else who was in real estate, certainly had their bumps along the way in 2008, 2009, but They were able to, stay afloat because they've got a lot of other fee streams coming in, right?
Benton Moss: Leasing fees for commercial spaces, property management fees, which are extremely stable, right? Occupancy in multifamily buildings probably dip to maybe mid 80s. 85 percent of the building is still leased. So those people have to live somewhere. And so those property management fees are some of the most stable recurring revenues out there in real estate.
Benton Moss: So they just, they have a lot of different fee streams that sort of kept them afloat. They weren't just dependent on their construction management, their development fees. Yes, you're right. The good times is good. And when nobody's digging dirt, nobody's getting paid. So
John Wilson: yeah. So for, I don't know much about the industry.
John Wilson: So for perspective, 2 million square footage, a lot of development, middle of the road, like how do they scale in the industry?
Benton Moss: Yeah, probably a better way to put it is they developed close to 150 acres worth of mixed use development. Yeah. Probably somewhere close to 4, 000 apartment units. Let's just put it this way.
Benton Moss: A target is maybe 50, 000 square feet. So it's 20 targets and a million square feet. So it's a lot of space. It's a lot of space. They've got a marquee development called North hills and North hills, East and North Raleigh that they've been working on for 10, 20 years at this point and constantly like adding things to it.
Benton Moss: So it's a district now. They've it's almost like Buckhead. It's probably smaller than Buckhead, but like it's just his own district. So it's a really interesting concept to study if you're interested in development.
John Wilson: I always thought development was like just totally fascinating. We do it on a small scale here, but there's a few local developers that they do what you just described.
John Wilson: They create a district where they take this either underutilized or completely unbuilt section. They, invest a hundred million dollars, just that. And then it just like transforms. So it's a Of other people's money. Yeah. Yes But I think it's just it's fascinating like the idea of reshaping A community and I always thought it would be fun, but I don't think i'm cut out for that
Benton Moss: I love development.
Benton Moss: It's amazing to see like what you can take either a Existing asset right repurpose it spend a bunch of money and really bring it back to its sort of Historic former glory right or just a new blank slate. You're building something ground up. I think it's awesome I always want to be, quote unquote, a developer in the development business, but it takes a long time to either amass the capital to do it yourself or to get a track record to do it yourself.
Benton Moss: So a lot of times these developers will have either another company or something that they're doing that they can feed that feast or famine type of business, right? So that business model is not nearly as stable as some of the other businesses that I'm sure we'll talk about in a little bit, which is why I didn't, just leave that job and try and go out on my own to be like a developer because It could be two years before you see any fees on any of these developments, right?
Benton Moss: Whether it's property management fee, developers fee, project management fee, you name it. I'm working on two developments that will hopefully come to fruition in downtown Rocky Mount in my hometown right now. And I haven't gotten paid a dime because, the buildings are controlled by us, but they're not financed.
Benton Moss: And I'm basically putting in sweat equity right now, right? So until we actually start removing dirt and, rehabbing these buildings, like I'm not getting paid. Nobody's getting paid. So it can take a while to get to that portion of the deal where the building is actually paying out either to developers or investors.
Benton Moss: So it helps to have, another source of income, which in Kane and some of these other bigger developers cases, it's property management, it's leasing, sometimes it's brokerage as well. That's one of the things that really initially interested me in real estate in general is just how many different ways you can make money in real estate.
John Wilson: Yeah, I think that's the fascinating thing about real estate in general. Yeah. Is there's, I don't know, like I've had probably five real estate guys on the podcast and each one of them make money in completely different ways, but I think the cool thing about every single one of them so far is they have what you're describing with Cain, they all have four to 10 different streams of revenue coming in.
John Wilson: They've built these, immovable businesses and it all started with something random. My sister is a high performing real estate agent, which even on that side of the real estate game. There's 15 businesses that you can launch off of just being a real estate agent. Totally. It's totally amazing.
John Wilson: Yeah. So you're actively working on two projects now. Is that with Kane? Or is that like your own stuff that you're developing as you go?
Benton Moss: So I left Kane. At the end of 2020 beginning 2021. These are projects that I've been working on with some partners of mine. We have a joint venture agreement, and they are, again, long term redevelopment adaptive reuse projects so get the guy's name Jonathan.
Benton Moss: Bletchford or Blanchford Blanchfield. I can't remember his last name, but he's active on Twitter and has been on several of the podcasts, most notably Chris powers. And it's basically same thing he's doing there. Historic tax credit projects where we basically apply to rehabilitate these buildings to their former sort of historic look, if you will, exterior wise and the state and federal or state and federal historic tax credits, they will basically grant you, but then you can sell to these high net worth individuals, basically that.
Benton Moss: In complicated ways work against their taxable income, and you use that pot of money as part of your equity stack in the overall capital stack of the budget. Anyways, but yeah, so there are two mixed use projects in downtown our downtown has experienced a lot of blight and this disinvestment over the past like 3030 plus years, and people have always been talking about, how can we get downtown, moving again.
Benton Moss: Nobody's really done much about it. There's been a couple of people, one project in particular that has recently entered into the lease up phase. And it's a beautiful project on main street, but 40 years ago, the main street of Rocky Mount was packed. Cars everywhere people walking around and now it's just a little bit of a ghost town But you know as I say about developers, they're mavericks.
Benton Moss: So if you build it, they will come that's the thesis as simple as it gets
John Wilson: Yeah, our downtown's the same a lot of disinvestment. Where are you based out of
Benton Moss: akron? Okay.
John Wilson: Yeah, so it's just within the past maybe five years that they've started to really Poor money in a lot of outside development. They just did 3000 apartments downtown, which that's a lot like Akron and Akron's population is like 200, 000 and so like 3000.
John Wilson: It's a chunk and there was no apartments downtown at all. So they just added 3000 luxury units. They added a bunch of new corporate stuff. Or not corporate, but like commercial ground space for the mixed use. So it's going to be interesting to see how it all turns out. They're wrapping up. They're on like year four of the project.
John Wilson: So they're leasing up all the residential and they're working on the retail.
Benton Moss: Has the residential leased up pretty strongly?
John Wilson: I don't know. I don't know the figures. I'd be fascinated in knowing there's a ton of interest, but right now I think they're big struggle like back in the 70s, downtown Akron was like crazy.
John Wilson: It was like, you don't go there at night, right? And it's kept that reputation for 50 years. So now this is basically the first. This is like the first institutional investment into our downtown in 50 years. So they're struggling to change the perception that, you know, for half a century. So I believe the residential is coming along, but I think what they're starting to struggle with is they've moved all these people down there, but because it's been like a place you avoid for 50 years, there's not really many bars or restaurants or other things to do there.
John Wilson: Commercial. Yeah. I think until they. Fill up or at least start to fill up the retail side, they're going to struggle to max out the residential.
Benton Moss: That is the struggle of revitalizing an area is the chicken and the egg, right? Like you need beds and heads. Yeah, which comes first. Yeah, which comes first, right?
Benton Moss: Like the food and beverage is not going to come. Before you get folks who are living there, but the people that are going to be living there want to see what else is there. Exactly. And so it's, there's no doubt about it. It's a struggle. There's probably easier development money to be made elsewhere, but, beyond just the money, I think the mission is totally worth it.
Benton Moss: I personally, and I'm sure there are great people out there that have better opinions than mine, but I personally think that there are a lot of downtowns, just like Akron. Just like Rocky Mount, just like Wilson, North Carolina, that have experienced the same sort of downward trajectory, disinvestment, crime, blight, et cetera.
Benton Moss: People move out, they go to the bigger cities. This is just me. I'm probably wrong. I really do think that. 2020 and the pandemic was a sort of canary in the coal mine that you don't have to live in New York. You don't have to live in LA. You don't have to live in California to have a great life, a great job.
Benton Moss: Your quality of life can be way higher in a downtown Akron setting than it can be in Silicon Valley. Just me. I live in a small town and I'm probably wrong. What do I know? But I personally think,
John Wilson: I think you're right on Akron for a brief moment in 21 was the hottest real estate market in the States because the population is so small.
John Wilson: You have basically all of the, this is turning into an Akron promo, but you have all the, basically the big city benefits. And for really big city, like international airports, you're only 30 minutes from Cleveland, which Cleveland has received like tens of billions of dollars of redevelopment money in the past decade.
John Wilson: Like they've reshaped Cleveland in the past 10 years, which is just totally crazy to me. But Akron has seen a big population jump in just the past year. Because, Hey, this is basically a big city. You're right next to a giant city. You have all the benefits, but houses are still 80 grand. There's literally no traffic.
John Wilson: There's good paying jobs. There's tons of hospitals. It's a stable area. So I agree. I think there's a bunch of communities like that sub a million population in the counties that are starting to really.
Benton Moss: Totally. Yeah. They're starting to boom. Look at like Boise, Idaho, right? All the California.
Benton Moss: Yeah. And there's 50, 000 people, but. I guess you touched on it, but like New York City, if they lose 200, 000 people, that's a drop in the bucket. But if 20, 000 of those people, which I don't know if it's 20, 000, but it's probably close to it. 20, 000 of those go to the coast of North Carolina and go down to Wilmington.
Benton Moss: Wilmington's population is, 200, 000 people. And so that's a tidal wave for 200, 000 people, New York. Their real estate market, they're not going to feel it. And I think at the edges, like you're really seeing these huge mega cities, little chips fall off on the edges.
Benton Moss: And they're going to the Clevelands and then you're having people from Cleveland move out to Akron. And you're seeing some of this like waterfall effect. I see it in a lot of our sports. Small towns in Eastern North Carolina, where the pricing is ridiculous. And you look at the census and you're like, wait a second.
Benton Moss: In the last 10 years, they lost population, but it doesn't really match up with reality. I shouldn't say it didn't match up with reality. It's just the data hasn't really.
John Wilson: The census was 2010 to
Benton Moss: 2020, right? But those two years, Akron and Cleveland are the same thing.
John Wilson: We've lost like a 10th of a percent.
John Wilson: Over the course of that 10 year period. Whereas like Cincinnati Columbus, double digit growth in that same period. But Hey, anything before 2020 doesn't matter. All right. We dove into development pretty hard. Let's dive into what you've been up to for the past year, right? The. Property management company, plumbing and HVAC.
John Wilson: Let's talk about it.
Benton Moss: So I think a good way maybe to frame it is I think after I left Kane, I just realized, how great of a business model they had because they had such a great staff where they could have property management, leasing, development, construction management. I would love to that would be an awesome, audacious goal to try and create a business model where you can develop, you can own, You can manage and you can maintain real assets.
Benton Moss: That's like division, right? That's what I'm aiming for. And Rome wasn't built in a day and we've got a long ways to go. But I think that concept of basically running a few different business lines out of one office and crossing those business lines over can be really efficient from a back office standpoint.
Benton Moss: But there's just so many different ways to skin the cat in real estate, right? So anyways, fast forward to a year ago, I met a guy who At the time, I think he was 68. He's now 69. He's actually still working at the company, believe it or not. I know a lot of sellers typically leave, but we just, we met, we had several lunches at the country club and really got on well.
Benton Moss: Anyways, we came to an agreement where I would buy his company out. And that company was started as a property management company, actually a hundred years ago this year. It was started originally in 1922 and the name of it Simmons and Harris. So there was an originally a guy named. I can't remember his first name, but last name Simmons, other guys, last name Harris.
Benton Moss: And that name is continued for a hundred years, about 40 to 50 years ago, close to 50 years ago, they started a, like an internal maintenance division. And so they ended up hiring three or four guys, but they ended up training to be plumbers and HVAC technicians just to maintain their portfolio quickly.
Benton Moss: They realized, holy cow, there's a lot of demand for a professional services company. So not only were they taking work orders for maintenance requests for their portfolio, they started taking outside maintenance requests as well. So from like just normal residential customers and owners of businesses, commercial establishments, et cetera.
Benton Moss: So quickly they outgrew and eventually started to out price their property management book of business to where, today I would say maybe 15 percent of our revenue comes from the property management. Side in terms of maintenance and then the other 85 percent is just third party and it's owner occupants of residential homes or commercial businesses.
Benton Moss: So we're split probably 5050 HVAC and plumbing a de minimis amount of electrical like small services. Think like it's not contracting. Think you need a bunch of receptacles replaced or you've got some electrical issues with your panel, we can go out and diagnose it. So we have a limited electrical license as well.
Benton Moss: The property management company. We've got six folks in the office and then on the. Maintenance side, Metro maintenance. We've got two folks in the office as well who take those repair requests and customer phone calls. And then we've got another nine technicians that, they meet at the office every morning and then we dispatch the work orders and then they go forth.
Benton Moss: So yeah, it's been a big learning experience the last year. I think actually, John and I, we talked right before I was about to take over the business and John gave me some great advice. He said, I'll never forget this, John. You said, don't wear anything but jeans. You don't want to show up in penny loafers in your Ferrari.
Benton Moss: Just wear, normal jeans and talk like them and walk like them and take an interest in them, which, obviously it's seems pretty common sense, but I did it and I've really enjoyed, getting to know all the, especially to the technicians and obviously the office folks are amazing as well.
Benton Moss: I think every single one of our people are top notch, but, when I was talking to John, I was pretty worried these technicians are well sought after and they have skills that can go anywhere. So what's going to keep them. Working for us and, and he had some great advice, just, spend time with them, develop relationships try and get out there, maybe once a week, maybe a little less than that, but try and, go set an HVAC unit or last week, actually we were in a crawl space, had to replace a furnace, so that was fun.
Benton Moss: But yeah, it's been a huge learning experience for me, but I really enjoyed it. I guess that's probably a good overview.
John Wilson: Yeah. That's a great overview and I'm glad that you wore jeans. That's that was the right decision.
Benton Moss: Yeah. In fact, the office policy used to be no jeans and I quickly instituted, only jeans.
John Wilson: That's funny. Yeah. We're probably on the opposite side of the spectrum where we went from all jeans to like more of a strict dress code, but I think it changes as the organization develops. Sure. Sure. Sure. Yeah, that is good. That's funny. So you're running three different businesses. I'm adding in development here.
John Wilson: So what is division of time usually look like in a 40 hour a week? What's percentages?
Benton Moss: First off, it's not a 40 hour week. Second off, that's one thing that, I think for a lot of folks who want to own a small business, it's not going to be a 40 hour week. And I think that's the biggest thing that like, just candidly, my wife and I have had to really sit down and divide out, okay, like I need X number of hours to get all my stuff done.
Benton Moss: And then after that, I'm all yours. Are you on board with this? And that's something that I think Chris Powers has said this a lot. You need to make sure your spouse is on board. And I think we've obviously she's on board and we're all good, that's something that everyone needs to measure before they jump into small business.
Benton Moss: In terms of time management, development probably takes five to 10 hours a week because it's project based and really it's it's You're moving the ball into different people's courts, right? So the two projects I'm working on right now, most of the balls are either in the contractor's court price things, or in the architect's court, because we're getting close to construction drawings.
Benton Moss: So there's some other coordination, but a lot of it's emails and it's asynchronous. And John, as for a plumbing or an HVAC business, like That is not asynchronous. You have to catch the calls. You have to do the work, right? We're fortunate. We have a great team who answer all the calls and they route things to where they need to go.
Benton Moss: And then, so I'd say on the development side, it's very little right now, just because that's the season that we're in, it's a lot of just. project management emails, a couple calls a week, maybe like we have a standing Tuesday morning call with my partners that we had today. That's really it.
Benton Moss: So it's not terrible. The property management side probably takes 70 percent of my time, I would say, just because there's a lot of, it's a lot of administrative Tasks that you have to make sure that you're getting done on a monthly basis, right? So late fees and court papers and lease renewals, rent increases, closing out books at the end of the month, making sure all the checks get in the right envelopes and the invoices go to the right owner.
Benton Moss: Just so many different administrative tasks, right? And then on top of that, you've always got. Changes that are going on with a certain owner account or a certain tenant or a certain property, right? At any one point, we manage over 1300 units right now. We're acquiring another book of business that'll put us closer to 2500 units.
Benton Moss: At any point, we've got like 20 turnovers going on at one time. Like we've got one guy whose only job is to, I wouldn't say his only job, but the main. Yeah. Brunt of his job is inspecting and making sure that these units get turned over into a rent ready condition based on what the owner wants to do.
Benton Moss: And then the other, probably 25 percent of my time is spent on the Metro maintenance side, mostly because our guys are so good. We catch the calls, we dispatch the work orders and occasionally I have to handle a customer issue. Most of my time is on like bids proposals, that type stuff, and making sure that we're, bidding things appropriately.
Benton Moss: I really want to grow our commercial sort of our contracting side. So I'm planning on hiring. There's another service company slash contractor that's actually shutting the doors and the guys like 69 had all his licenses and said, you know what, I don't want to sell it because That would mean that I have to stick around for another year.
Benton Moss: So he's just shutting the doors. So all this work is going to go somewhere. And so I'm trying to round up, some of his employees and we've, come to an agreement on salary benefits, all that stuff. I would really like to grow our commercial plumbing and HVAC proposal division, if you will, more of like the contracting arm, I'd say most of our work is service based.
Benton Moss: So think like things that can get done within half a day max, not so much Hey, I've got this building. Can you bid? On the plumbing trade, or can you bid on, 17 rooftop units, that type deal. So I'd say on average, I probably working, I'd say probably between 55 and 60 hours a week, but I'm still getting home at, my wife is probably going to laugh, six o'clock ish every night, I think is generally what I'm trying to set, Two to three hours of solid family time.
Benton Moss: It's been a little tougher lately, just given some of the stuff I have going on. But yeah, if you're going to be a business owner, you're basically always going to be on and you have to pick and choose your battles, but just prioritize things that are number one. And for me, like family and faith are very important.
Benton Moss: I try and just really make sure that I carve out the time that I need for those. But it keeps him busy. That's for sure.
John Wilson: No, it totally does. And I think the, I'll insert that the timing gets weird. As the team grows and expands, how your time gets spent just looks so different. So it might not be a clean 40 or 50 hours a week or whatever.
John Wilson: We just had a weekend trip. I got back from yesterday and it was 4 days. We have another one coming up. We have 3 coming up. And it's all work related. My typical hours in the office is probably lower than most owners you'll meet just because the team is so big. I'm a distraction if I'm here, but my time doing other things that still drive us forward in some way have now taken very odd.
John Wilson: It's a lot of dinners or it's a lot of like performance reward trips for our team or trainings or whatever it is. So just as the company's developed, it's switched from this yeah, like what you just described, 55, 60 hours in the week to now. That time is definitely still there. It's just when it happens is very weird because it's based on, Hey, we have two dinners this week that we have to be out.
John Wilson: We're taking people out or again, like a performance trip that we just got back from. So
Benton Moss: yeah, it
John Wilson: changes a lot.
Benton Moss: If you don't mind me asking, how many folks do you guys employ, both on the technician side, but then also total in the office too?
John Wilson: We're at 121.
Benton Moss: So it's quite a bit different. If we, and I think we're going to end up hiring four, if not five new folks on the services side, we'll be at probably 22.
Benton Moss: And I've seen that as we're expanding the property management and the services division, like we're getting into this point where we're having to divide up. Roles and responsibilities a little bit more because it used to be, anybody can be cross trained and everybody can answer a phone and everybody can put in a rent payment.
Benton Moss: Everybody can do this batch of work order. Now it's okay no. That's going to get way too complicated. I need one person to do this one person to do that. And I can see like the structure starting to settle into place a little bit. So I can imagine like 120, You've got three assistants, one to get you coffee, one to get you dinner, and, one to manage your calendar.
John Wilson: Yeah, something like that. Not quite that. But I think it's around your size that you start to deal with specialization, which is what you're describing.
Benton Moss: Yeah.
John Wilson: Like you have, it's most apparent in the field. Okay. Because you have electrical. You said you only have one guy that does electrical. That's a great example for that.
Benton Moss: Yeah, we got two licensed electricians, but they're also licensed HVAC guys, so they we work it in when we need to, but that's another division that I would love to have a dedicated person for,
John Wilson: so what starts to happen, it starts first in the field and then in the office, but you end up having one guy.
John Wilson: Who's the drain expert, like one total specialist, you have one guy who's the HVAC expert or the salesperson or whatever it is. And you start to build these like very specific roles as you go. And then as the field grows and the office grows with it, then you end up with the same thing, highly specialized people inside each one.
John Wilson: So maybe, three people that all they do is lease two people that all they do is administer fees and bookkeeping. And you just keep that going until. The team is at scale.
Benton Moss: Yeah, it just fills out.
John Wilson: Yeah, you're on that precipice. It always seems to happen around 25 to 30 that you haven't you start having to specialize and it goes from being a team of generalists to like generalists and specialists and even now we still have some generalists like people that Knock out a whole area of responsibility like I handle marketing or something like that But in finance, there's seven people on our finance team So each specific, like who opens the mail?
John Wilson: That's a job, right? That's someone's job.
Benton Moss: Yeah. So people get a lot of things, but yeah, I'm sure you guys get a lot of mail too. I'm baffled at the amount of mail that we get and we're not Nowhere close to where you guys are.
John Wilson: Yeah, but it ends up getting very specific which is good and bad You just have to make sure your training's there.
John Wilson: So this sort of leads into my next question You said you were acquiring another property management company and you were about to almost or close to double your units under management How do you think that's gonna change your day to day? You just walked through what your day to day is now.
John Wilson: Like what's it look like in three months?
Benton Moss: Yeah. And that's a good question. Fortunately, so two of their main employees will stay on with, or through the transition and then also become, our employees after that. So they're well aware of the transaction. They're on board with everything. And then.
Benton Moss: After that, we're going to start transitioning into more specific roles. So like we'll have one person who their job from the first through the, call it the seventh or eighth, maybe it's just to sit down, take all the payments and key in, the rent payments we'll have one person throughout the entire month, whose role is to basically route all maintenance requests that get put on her desk to our vendors, make sure they get done and then make sure the vendors get paid because when you have 2, 500 units, you're getting three to 400 maintenance requests a month.
Benton Moss: If not, in some months, it can be 500. It's dependent on, the season, whether it's, winter or summer, you get it. It's a little bit more seasonal, but I think the first three months will be pretty hectic because we're not going to be specialized. And so the two employees that will come on board will be working very closely with their landlords.
Benton Moss: Their landlords will be learning our systems. Our folks in our team will be learning their. Book a business. And so there will be this mixing and matching process, right? As their landlord learn how our system works, which is not very different than how theirs is. They're just really getting acclimated to our people.
Benton Moss: It won't look that much different day to day, my time, other than Helping transition our company from what I would call maybe a cross trained model to more of a specialized role and responsibility model. And that's, probably hopefully the first 90 days will be 80 percent of the way there.
Benton Moss: I've already started prepping our staff, which Even before this acquisition, things have lined up like certain, I send work orders to one person right now already, I send payments to one person already, anything that needs to be scanned in and digitally filed, I give it to one person already. So it's not really something that's a huge change.
Benton Moss: It's already been transitioning that way, and I'm hoping, fingers crossed that it will be relatively smooth in that transition. I wouldn't say that anything will change. I may have to add another meeting or two just to make sure that, I don't like meetings, but I do think that they're valuable just to get everybody together maybe once a week just to hash out any issues, particularly on the vacancy list or any maintenance issues that are thorny.
Benton Moss: So if anything, the hours may be a little bit longer, but I think once we get everything integrated, I actually think it will be smoother post acquisition once we get everything integrated and everybody's a little bit more specialized than it has been recently.
John Wilson: What is average sale per unit per month?
John Wilson: Like what's the value of a unit
Benton Moss: now? Are you talking like management fees? So it varies. And one of the efforts that I have really been trying to focus on is any new units slash new owners that we agree to take on. We thoroughly vet them. One of the things that I've made the mistake of doing is saying yes to an owner who turns out to be a little bit more difficult to deal with.
Benton Moss: They have bad properties. They don't want to maintain their property. We're not making that much money on it anyways. And it just sucks up a bunch of balls and just the headache. You're really not making that much. There's not enough that they could pay you. To take those units and manage them. I would say average rent per month is probably in the eight 50 range, somewhere in there, probably 50 bucks, somewhere in there.
Benton Moss: So that's management fees. On top of that, you also get, most agents will charge late fees. So if a tenant is late. With their rent, they negotiate in the contract with the owner that the agent gets to keep the late fees just for the hassle of having to basically chase down, we collect application fees because we have to run all credit checks, criminal backgrounds, screen their income, that type stuff.
Benton Moss: So we collect those and that's a small profit center, if you will, just to compensate us for the additional administrative work that needs to go on with those efforts. But the vast majority of the revenue is management fees on the property management side.
John Wilson: What's the average ticket for the home service company?
Benton Moss: Probably 450. It varies from month to month. Some months it comes in 350. Sometimes it comes in at 5. 50, just depends on how many work orders we're doing, or doing more sewer lines, or doing more, replacing a water line to a toilet, right? Like it varies from month to month.
John Wilson: How many people work enterprise wide?
John Wilson: Like on the development, on the home service, on the property management?
Benton Moss: So we are at 18 right now. If we hire another, those four that I spoke about potentially five will be at 22, 23. It's actually just me on the development side, because again, I don't spend that much time on it. There are a couple other people that I'm a JV partner with that are not associated with the property management and the maintenance, the property management and the maintenance arm.
Benton Moss: That's just me. I own and control those. This is a separate outside joint venture. So just to clarify,
John Wilson: What I mean is how many people are working alongside you with hands in all three of those projects? So like just me just you okay.
Benton Moss: Yes So the ideal model is to you know develop an asset take that asset that we just developed and move it into our property management arm and then when a tenant calls and They have a stopped up drain line to use our maintenance company to go in on stop the drain line, right?
Benton Moss: So you develop it you manage it? Had partial or whole ownership. I don't have nearly the amount of capital to develop these buildings of my own, hence the JV partners. And then ultimately the investors that, we hope will back us, but then you also get to maintain those assets and manage them as well.
John Wilson: Gotcha. Yes. That was my next question is what's this look like at scale. So do you think you'll ever get to the point where your trade companies are large enough that they can actually take part in the development?
Benton Moss: I'm afraid to admit it, but that's the ultimate goal. It's to have a vertically integrated company where, for example, like right now I'm actually, I'm literally studying for my general contractor's license.
Benton Moss: I would love to have my general contractor's license, my plumbing license, my mechanical license. I don't know that I'll ever have the hours to get my electrical, but man, that would be awesome. To have a contracting business, as part of the development arm and then, okay, you have a building you want to build that you're an owner and you've also got a mechanic on a plumbing arm that can.
Benton Moss: Project manage that portion of it, saving yourself overhead or combining the overhead and some of the fees that you would get charged by those subs anyways. Yes, absolutely. But from here to there, there are many steps and I'm not naive to think that's going to happen, the next year, even the next 10 years.
Benton Moss: I think what you find with a lot of these bigger developers that have a construction arm, they don't normally have a mechanical or a plumbing arm because it's just too many moving parts. But that's not to say it couldn't be done. It just requires coordination, right? A lot of these developers that have a general contracting license and they will self what's called self performing.
Benton Moss: So they'll self perform the contracting portion of the development. Cause you've also got architectural, legal, financial. You've got all kinds of different things that need to be done to make this building, get built. But typically they will sub out the trades just because it's, again, they're not in the business of keeping an electrician or an HVAC guy or a plumbing guy busy.
Benton Moss: They just, for example, 2008 hits. What happens, right? At least in a services business. Toilets always break. HVAC systems always break. Things are always leaking. Stuff has got to get fixed, right? Stuff doesn't always have to get developed. So that's that's the downside, right? To the project.
Benton Moss: The contracting side of it, I would consider to be more of a contractor, it ebbs and flows the economy, right?
John Wilson: Yeah, that makes a lot of sense. I always thought it would be fun to basically do what you're describing. I always thought that part would be cool. Maybe I'll just have to fly you up here for a week and, you can see the plumbing company and you can show me how to develop. Cause we have, we are at the scale that we could support it. And it's just we don't even know the right steps. Like we have 40 electricians, we have 40 plumbers, we have 30 some HVAC guys. Like we could do it. It might even help the company during slow times, keep us busy.
John Wilson: So we're sitting here and you probably got
Benton Moss: the capital to float some of that stuff, whereas I definitely don't. If I had two of my HVAC techs going and working on this building for three weeks. How many service calls will we miss, right? Whereas you, I think if your development load or your development capacity stays well below what your service capacity and contracting capacity is, you'd probably be fine, right?
Benton Moss: So you do a couple buildings a year and You could self perform a lot of that work.
John Wilson: Yeah, I agree. I just never know what to do. I wasn't raised in the real estate side of things. Like I was raised in the plumbing, like the contracting side of things, but I always thought it'd be fun. Like we've talked about, we've spun this idea out so many different times Hey, what if we went and built a hundred car washes over the next five years?
John Wilson: Cause we have electrical. We have like our electrical company builds 20 car washes a year right now. So like we already get what are you waiting
Benton Moss: for
John Wilson: man? Those things sell for
Benton Moss: three caps. It's ridiculous
John Wilson: I don't know how to develop like I don't even understand the beginning of the process for how to Go locate land like none of that makes sense to me, but it'd be sweet I think that'd be fun or we talked about creating a house flipping company that all we do is churn out houses because we have All the mechanicals we could go hire a pram carpenter And just you know You So we have a lot of ideas, but we've never done any of them because we don't understand the development side.
Benton Moss: Gosh, what I would give to just, man, step in that business for a week. Come on up. That's also, you have the resources. Hey, we'll talk offline. Okay. You have the resources to make it happen. There's no question. There's no question.
John Wilson: All right, shit. I hope my team doesn't hear this. I'm going to get in trouble.
Benton Moss: Let's go. Let's go. I think we just started your development. I'm pretty sure we just
John Wilson: started a development
Benton Moss: company. I'm pretty sure.
John Wilson: Yeah, that would be sweet. Yeah. I think what you'll find soon too, this is the. Ancillary benefit of even doing something like this is outside of the, Hey, how can we just generate like a stream of wealth or equity or whatever for ourselves?
John Wilson: Yeah. It becomes a huge tool in the form of the academy because how do you train new techs? So I have 80, I have 85 technicians. And there is not enough technicians in the markets that we serve to ever fully satisfy our growth. That's awesome. We have to train them ground up 'cause there's no other way to do it.
John Wilson: In order for us to keep growing, we had to build an academy. So we built an academy out a year ago. We started only in plumbing. We're starting to add the new trades and invest in it now. But one of the big ideas for how to scale the academy profitably, because that's the hard part is this thing costs a lot of money to run at scale is how can we, instead of making an academy, can we make it a development company that we train our apprentices on our own projects at a lesser rate?
John Wilson: We can still use them get dollars out of it and keep the whole thing moving
Benton Moss: And I actually think that's a brilliant idea because personally I think that new construction is a lot I shouldn't say a lot you learn how things work when the walls are open When the chases aren't closed in and you can see how everything works together from the, the conduit, the mechanical duct work, the plumbing, rough in and trim out.
Benton Moss: You see everything open, so you see how it all fits together. And so when you learn to put it together, then it's a lot easier down the road when those guys start getting out in the field. And know how to diagnose okay this drain line is probably going to 90 here and it's going out to the street there.
Benton Moss: I think we can locate it six feet over there, right? Dig it up. There it is. Run the cable through it and you're good to go. Whereas if they just go right into the field, they're going to have no clue how the systems work together in a residential or commercial building. I think that's an awesome idea.
Benton Moss: And it sounds like you're just minutes away from starting your own development company.
John Wilson: Sounds like it. Yeah, now we just have to figure out the actual, Development side the real estate side of it because real estate is like our weakest point
Benton Moss: sounds like downtown. Akron is experiencing a revitalization
John Wilson: So oh boy,
Benton Moss: you gotta risk it to get the biscuit in development
John Wilson: That was nice All right.
John Wilson: So what we're describing is what you hope this looks like at scale. You're trying to rebuild A fully integrated development management and maintenance firm.
Benton Moss: Yeah, and I never want the services Business the trades business to be dependent on the development I want the development to be a wealth building and frankly a missional based type of endeavor I just love seeing something new or reusable In a new shape versus what it was previously.
Benton Moss: I just I love that idea of regeneration or new, creation, right? And so I never want Our trades business want to be dependent on that. Right? Same thing with the management company. All the stuff that we managed is third party units, right? So very steady fee stream and all of those people pretty much want mailbox money.
Benton Moss: They don't want to deal with the tenant phone calls, the bookkeeping, the maintenance requests, finding trades people. They just want it done professionally. Send me my check at the month. And so I think all of these business lines are unique ways to make money. Money in the built environment. And that's really what I'm passionate about.
Benton Moss: And I think there's a really unique way where you can marry all these, where they're not totally dependent on each other, but you can share services in the back end and you can also, they feed each other, right?
John Wilson: Yeah,
Benton Moss: so I would love to have 40 electricians or however many you have.
John Wilson: Yeah. And now, now it's just like how to make use of it and how to make it value add like enterprise wide because I think what happens and i'm excited for This to happen for you is once you start running multiple things as they all take off More of the team graduates and looks enterprise wide instead of hey, you're just this and instead of You thinking of yourself as running three businesses, you're just running one business.
John Wilson: It just happens to have different arms
Benton Moss: that
John Wilson: happened to us about two years ago, where I was like, Oh, I'm running like four or five different businesses here. We've got a real estate, we have our two contracting companies, we have our, like whatever else. And then at some point it just clicked that this was all just one business with a
Benton Moss: You're totally right. I hope and I pray that we get there. I want to say back to your original comment about development. I like the idea of cutting your teeth on, some homes that are flips. This comes to worst. You can't sell them for what you put in them and you turn them into rentals.
Benton Moss: You refi's. Much capital out as you can and you learn, right? Like you're going to get a great lesson either way. And then the best case scenario is that you sell it for a boatload of money or you make a boatload of money on it. You pay capital gains taxes. You rolled into the next one or two and it was a successful project.
Benton Moss: And you keep inching your way towards that ultimate, which is like either maybe developing an apartment complex or, rehabbing an old commercial building downtown. Just starting small and going from there, but you definitely have the resources to do it.
John Wilson: Yeah I'm going to have to fly you up here and you can help me figure it out.
John Wilson: And then we're pretty much on our last question here, which is single biggest challenge. I would
Benton Moss: say our single biggest challenge is also definitely a blessing, not necessarily a challenge, but I'm a young guy. I've never grown business or led a business, the size of yours. And I don't know what it looks like to push through that ceiling.
Benton Moss: I feel like we're at a ceiling right now. Where we're going from everybody's wearing multiple hats to everybody's going to wear one hat and they're going to be a little bit more specialized. And it's basically that team building stage where if we want to grow, we have to build a team. You have to invest in the payroll, invest in the people, even on a pro forma.
Benton Moss: You're like, gosh, like I got to grow 25, 30 percent to make this even break even. And to just take that step of faith and to trust that those people are the right people. I'm at that stage right now, especially on the services business, on the real estate business. We're crushing it. We're growing and we've got the right people in the right seats.
Benton Moss: And I think as we expand with the new people, I see a clear path to how we can make that run a little bit smoother on the services side, that opportunity to grow by four or five new people. In my, for whatever reason, when I put it on a pro forma and I say, gosh, like we're adding this much in payroll, how do I make this work?
Benton Moss: So it's not necessarily a challenge. It's more of a I'm taking a big step of faith that, Hey, if we're going to increase our expenses by, 400, 000 this year, like we got to be able to cover those expenses. Any advice that you have, I would be all ears. On
John Wilson: the home service side.
John Wilson: I talk about this a lot in, tweets and newsletter, but it's all these different plateaus. That you hit in your company and nine techs. So maybe that's 2 million in revenue or so is that roughly you start to run into exactly what you're describing. You start to run into a plateau and service companies are tough.
John Wilson: I think in general, because you can run a really small service company very profitably. So under a million and a half in sales, you don't need managers. And you don't need like the investment and payroll, like you just said, like you just don't even need it. It would do no one any benefit unless you want it to be totally hands off.
John Wilson: But in order to go to the next level, you need a lot of investment and payroll. And it's usually in the form of managers and it's people to run the teams for you. Because you're not going to be able to. It can look a lot of different ways. My quick take is that we have found a much easier time growing through acquisition.
John Wilson: So anytime we hit a plateau where we have to make a really big investment in payroll, we acquire past the plateau because what happens is let's say, Hey, I want to grow four or five heads, On top of my nine existing techs, so you go hire a manager, maybe a service manager, ops manager, whatever your business requires at that time.
John Wilson: And then you hire four or five more people, they get overloaded. And then you go hire a second manager. Each manager only has seven techs, and that's a really small team. So then your overhead's a ton. And you're still trying to grow. You're trying to reinvest all your cash and you just keep it becomes like you're spinning your tires.
John Wilson: So we've always you can do it and we've done it. It's just much easier when instead of adding four texts through hiring, you can add 10 through an acquisition. So if you can go take down another 10 tech company, then that's two managers and that's 10 text piece and that's solid teams. So you got past the painful point of each manager having five or six.
John Wilson: And you went straight to 10 texts per manager. So the big thing is yes, you're in for a rough ride. It hurts all the way up until four or 5 million in sales, just because you have to keep investing in overhead. And then once you get to that four or 5 million, you've got an ops manager. You probably have a service manager, maybe an office manager.
John Wilson: And the company got mostly hands off again.
Benton Moss: Yeah, I feel like there's like this, like you cross over the threshold to where, it's hands off. You've got good CSRs and you're just making sure that everybody shows up to work, then you're going to reinvest. And it's this huge roller coaster.
Benton Moss: And then you get past the point and. To your point, maybe doubling sales. And I feel like we're at the peak of that rollercoaster right now. And I'm looking on the other side. So three of those hires are going to be technicians. One of them is going to be like an estimator sales person. So quasi manager, we don't really need.
Benton Moss: A service manager at this point, I think we're quickly approaching it another few heads and we probably will, but that person's job is mostly going to be on the bid proposal estimation side for the mechanical side of business. Because we want to grow on the commercial side more than anything, because I would say 80 percent of our business on the HVAC side is residential.
Benton Moss: We do a little bit of commercial would like to do more. Plumbing is a little bit better mixture, but
John Wilson: yeah. So yeah, the quick tips are, it does take a bunch of investment. It is a jump and I found it easier to acquire, especially if you have a specific thesis Hey, I want to get more into commercial, I'm going to try to hunt down a commercial guy and just buy their book of business.
John Wilson: It's way easier than front loading growth. Hey, I'm going to hire an estimator slash biz dev guy to go grow this division for me. Yeah. That might take two years to get any return on that guy's salary versus tomorrow, acquiring a company that just does a bunch of commercial where you get an immediate cashflow back on that investment.
John Wilson: So about half the time we've tried to front load the growth with a salary, it's worked and only half the time.
Benton Moss: What was the other half? What was your experience? Did you have to let people go? Or did you just, fold them in and just lean up and say, this didn't work? We've reallocated
John Wilson: them somewhere else.
John Wilson: And hey, this wasn't working out. But two years ago, we really wanted to grow our drain business. And so we bought a drain company septic and drain company because we wanted to grow how many digs we did. So we wanted to do instead of one dig a week We wanted two or three crews every single day doing excavation.
John Wilson: It would have taken us Five years to build that out effectively tons of marketing dollars who knows how effective that would have been A pile of payroll that we would have gotten a return on for a while And instead we just went and bought a business that did a bunch of it and now like Within a couple months of acquiring that company, this was last June, we do three dig crews every single day.
John Wilson: It was exactly the outcome
Benton Moss: we were looking for. Let me paint the picture and then we can wrap up. I want to paint a picture for you and get your feedback just because you've been there, done that. Again, I have no experience to really fall back on in this regard. So this service company at one point they had 30 trucks on the road and over time their owner just got older.
Benton Moss: Didn't want to take on a bunch of these bigger projects, started just leaning up a little bit. Didn't want to be as busy. And end of March, he's 69. He said I'm closing the doors. Good luck to everybody, but I'm getting out. I'm just old. I don't want to sell. I just would rather you guys go, find jobs and I'm going to go retire.
Benton Moss: So all of that work is going to go somewhere for the price of four trucks. We're also going to buy their phone number. We're also going to buy their customer list for, I hope a very cheap price, not going to say how much, but it's super cheap, a de minimis amount. We basically get four trucks, the phone number and the customer list.
Benton Moss: And then hopefully, if we can come to terms with these four folks, we'll end up hiring them. That's the situation, right? There's not a lot of service companies in our market anyways. Now we've got this fairly, decent sized one that's just folding, or not folding, but closing the doors.
Benton Moss: So my thought is, okay that works got to go somewhere. We might as well advertise heavily to their customers, get their phone number, get the people that they will be calling anyways, and just see if it'll work in the first, six months, call it, make an investment six months and say, okay, this isn't going to work out
John Wilson: slam dunk to me.
John Wilson: Like we've done these, we've done like four of these. That's good. I love to hear that. I'm working on a fifth one right now. Yeah. If you can take over an active company, even if it's not like a strict acquisition, if it's like an acqui hire and Hey, you've got active work. It's pretty much like that.
John Wilson: Yeah. They've only been like, usually it's the guy himself operating the company. He's actually doing the work, hands on the tools and estimating all that stuff. They might only do 15 to 30, 000 a month in sales, but yeah, we've done four of those. And again, I'm working on one Right now. That's
Benton Moss: great. Okay.
Benton Moss: Sense of comfort. Yeah.
John Wilson: Yeah. I think that makes a lot of sense, especially if you're bringing on techs or trucks, which are super valuable right now. Very. Then, yeah, then you'll be able to get that. That's a different scenario than like hiring a cold hire. And I think that makes a lot
Benton Moss: of sense to try and grow.
Benton Moss: Yeah. Just growing for the sake of growth. Yeah, I gotcha. Yeah. Yeah. This is like an aqua hire, but basically for the price of four trucks, a phone number and a customer list. No again, to wrap up, just, my initial comment, you see what that payroll investment is going to be.
Benton Moss: And you're like, Oh yeah, that is, it's chunky. You've got to get to here, yeah, exactly. Chunky is a good word. Yeah,
John Wilson: no it's a lot. This was awesome having you on today. Then if people want to connect with you, work in, they find you.
Benton Moss: So my email address is BMOSS, M O S S. So it's B M O S at Simmons, S I M O N S A N D, Harris, H A R I S.
Benton Moss: com. Bmoss, Simmons and Harris. com. I'm also on Twitter, although I've taken a Twitter break. It's the season of Lent. And so I gave up, tried to give up as much as I could social media. Maybe I'll pop back up there after Easter. But yeah, Twitter and shoot me an email. Love chatting with people from all over.
Benton Moss: Sweet. All right. Thanks for coming on. Thanks, John.
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