January 16, 2023

JF3056: Pivoting to Small Businesses for Greater ROI ft. Ricardo Torres

Ricardo Torres is the co-founder and CEO of Vectored Equity, which primarily focuses on syndications and funds. In this episode, he shares what motivated him to purchase a laundromat, the pros and cons of owning a small business, and the ins and outs of securing a small business acquisition loan. 

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Ricardo Torres | Real Estate Background

  • Co-founder and CEO of Vectored Equity, which primarily focuses on syndications and funds.
  • Portfolio:
    • GP of 163 units totaling $28M in AUM
  • Works full time as an EC-130 pilot in the United States Air Force, the Executive Officer to the 355 Wing Commander.
  • Based in: Tucson, AZ
  • Say hi to him at:
  • Greatest lesson: There is no limit to your dreams (real estate or not) so long as you have three things:
    • A vision (you cannot build that which you cannot imagine),
    • A plan (a vetted one), and
    • A consistent work ethic that doesn’t take no for an answer.



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Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Ricardo Torres. Ricardo is joining us from Tucson, Arizona. He is the co-founder and CEO of Vectored Equity, which primarily focuses on syndications and funds. He also works full-time as an EC130 pilot for the US Air Force. Ricardo's portfolio consists of being a GP on 163 units, totaling $28 million of assets under management. This is Ricardo's second time back, Best Ever listeners. Please welcome him. If you Google Ricardo Torres and Joe Fairless, the previous episode will pop up. Ricardo, thank you for joining us, and how are you today?

Ricardo Torres: Ash, pleasure to be here. Thank you for having me. I'm doing great, man. Enjoying the month of December in sunny Tucson, Arizona. It's not very cold over here, so I love it.

Ash Patel: You're very lucky, a lot of us are envious, and thank you again for taking the time to come back. Ricardo, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?

Ricardo Torres: Yeah, most definitely. So I'm an active duty Air Force officer and pilot, stationed here at Tucson Arizona Davis Monthan Air Force Base. Myself and my business partner, Vectored Equity essentially, got into commercial multifamily real estate around two years ago, in December of 2020. And since then, we have taken down a couple of different assets. We started off with a 14-unit apartment complex in Tucson; that was just with our own money, essentially a JV or joint venture deal. We later 1031-exchanged that after a solid profit, with only 10 months into deal, essentially doubled our equity, and bought a 25-unit apartment complex in Columbia, South Carolina. And then in addition to that, we've syndicated a couple of other apartments in Columbia, South Carolina, and then co-sponsored deals in San Antonio, Texas and in Michigan as well.

So we've been very active in the multifamily space for a couple years now. Those assets are cash-flowing very well, we're super-proud of those, and recently, we've pivoted slightly to purchasing a business. We own a laundromat here in Tucson, Arizona, it's called The Happy Laundry, and we're super-stoked about it, because the return on investment on small business can sometimes be greater by two or three times what you would expect to see in commercial multifamily, especially these days with rising interest rates and the debt market that is in such flux.

Ash Patel: One of my favorite things, you pivoted - was that because you were looking for yield?

Ricardo Torres: No, there's a couple of reasons... I think primarily, Ash, the reason that we pivoted was that multifamily is getting a little bit saturated; you have to kiss a lot of frogs before you find a good deal, especially right now. The Fed's just raised the interest rate about 50 basis points, and 75 before that, and it's continued over the last two or three quarters. So that coupled with the amount of time that we've spent attempting to underwrite certain deals kind of presented the opportunity for us to learn more.

To be honest with you, we saw a couple of our peers who had done so in the industry, and the return on the investment was -- we're talking, it could be instead of a multifamily deal that's going to yield you as an LP or a GP, whatever it may be, 7% to 10%, you're seeing yields of around 20% to 35%, 40%. And so I was like "Man, you've got my attention. Let's learn a little bit more about this." Not only that, for me, my why and the reason that I love moving the needle for my sphere of influence is as a business owner I can do so in a different manner than I can as an asset manager, because the property manager's between us and the tenants. So - several different reasons as to why we did it, but real estate is first and foremost a constant in all of that for us. And so The Happy Laundry that we purchased, we purchased both the business as well as the real estate for this deal.

Ash Patel: Okay, I remember you were a master of scaling. Is your goal to scale the laundromat business?

Ricardo Torres: Our goal is to scale the current laundromat business that we have in Tucson and roll up other similar businesses. And full transparency, what I mean by that is I have an apartment complex, or a two-bed, two-bath and then a studio behind the laundromat here in Tucson that we can knock some walls down, expand washers and dryers, more folding tables, some vending... And in doing so, increase the revenue, while the debt service remains constant, which we're very excited about. Rolling up as a term essentially means I can go find another laundromat in the vicinity that is similar in terms of a value-add potential that The Happy Laundry presented to us. There's several within three or four miles that we know of, that we're currently looking at and underwriting, and it's building the relationship with the owner essentially to determine whether or not he or she is willing to sell at this time. And if we see similar characteristics that we saw in Happy Laundry, and our ability to really reposition and change the look and the dynamic of the laundromat, and perhaps make the laundromat more efficient, or slightly increase prices if there's an opportunity to do so, we'll roll them up, or use economies of scale. And now I have perhaps one general manager who is looking over two, three or four laundromats, thus reducing the amount of time and effort required to manage those, from my perspective at least.

Ash Patel: So the answer is yes, you are looking to scale.

Ricardo Torres: Yes. Sorry. I'm a little long-winded with these answers, but yes.

Ash Patel: No, but now I want to take it a step further. You sound like just a lot of real estate people. We're all deal junkies; we find great returns on something, we explore it. Would you look at other types of businesses as well?

Ricardo Torres: Most definitely. I'm not relegated to laundromats. I'm interested in easy­-to-understand businesses that are recession-resistant, that will be here because people need the service or the products that are provided, and I'm interested in boring businesses, that will always be around, and perhaps somebody doesn't have the audacity to want to own or operate it, or the know-how. Insert Ricardo, who has this propensity to want to learn what a new business is like... Because by golly, if I can learn how to fly airplanes, I can learn how to run a business. And perhaps I'm being too audacious there, but at the end of the day - hey, confidence is key. Right? So I love the boring business, Ash, I think that there's a lot of potential out there...

Additionally, the baby boomer generation is retiring in millions per year for the next 10 years. And what does that mean? That means it presents an opportunity for me to purchase a business from somebody who has been running it for so long, who has had tried and true practices and policy in place that essentially translate to successful business. So why start up my own when I can already build a successful one is kind of the concept that I have in mind right now, and how we're looking at things with our lens going forward.

Ash Patel: I love it, and I have to ask you, Ricardo - did you also underwrite any car washes?

Ricardo Torres: Okay, so there's actually a carwash two storefronts down from where we're at. We have not underwritten it yet, because I will be honest, the first month of owning the laundromat was front-loaded with a good amount of hard work and time spent. But I do fully intend to look at car washes in the vicinity, because especially from the fully automated carwash perspective, I'm very interested in those.

Ash Patel: Ricardo the Deal Junkie Torres. I love it. Can we dive into the numbers on the laundromat? Both the business and the real estate. And did you purchase it all in one package, or was it separated?

Ricardo Torres: Great question. So we purchased it all in one package through an SBA loan, or a small business acquisition loan.

Ash Patel: Perfect.

Ricardo Torres: Yep.

Ash Patel: How long did that take? Because we recently bought a co-working space, and we couldn't get an SBA loan done in time... So walk me through that, please.

Ricardo Torres: Most definitely. So for starters, if you're listening to this and you are on the verge of doing an SBA loan, God help you, be with you... It's a very meticulous process. And the bank is governed by essentially the government that is backing a certain loan, and they have very meticulous criteria that needs to be met. Perhaps unlike a conventional loan that you might find at a local credit union on a multifamily deal. Those are not as drawn out.

So the process for us took around 90 days, Ash. We originally went in knowing this, and as a result, negotiated the escrow period to present us the opportunity to be flexible enough to do this. So that being said, a 60 day or a 45 day close on an SBA is not as realistic, so I wouldn't recommend that. I would recommend look for a seller who's open or amenable to an extension there, or to have a longer escrow period, just to start off with.

So we bought Happy Laundry for $600,000, and that was the laundromat as well as the real estate. We had the business valued at around $250,000, and then the real estate valued at $350,000. So all-in we were looking at $600,000. We have a really excellent broker that we work with, who has contacts all throughout the nation, and this gentleman was able to help link us up with a bank in the Midwest who offers small business acquisition loans.

So here's the best part of the small business acquisition loan that I absolutely love. For starters, in business seller financing is more probable. Seller financing - I know it's highly sought after in commercial multifamily. It's a little bit of a faux pas to try to lead a deal with seller financing, but in business, the numbers just don't lie. There are more owners who are willing to seller finance. So that was huge for us. It's great for them from a tax perspective. But for the SBA, we only put 10% down on this deal, which is tremendous. This is a 90% leverage; you don't find it in multifamily. So therein lies another benefit. So we were all in, $67,000, which had some SBA fees and a couple of closing costs associated for the $600,000 purchase.

Just a Reader's Digest on this - this laundromat, all coin-operated, brings in around $16,000 in revenue over the counter every month. Our debt service on it is about $4,500, and our operating expenses are somewhere around $7,000. So from a cashflow perspective, we had a lot of wiggle room, as well as a high return on our investment in order to make decisions that allow for us to breathe for a moment going into the laundromat, and not be constricted, as perhaps certain deals are right now in multifamily.

So when everything was said and done, the business was evaluated at $275,000, and the real estate of $580,000. So we bought this for 600k, and we're coming in with around $250,000 in equity on day one. And part of that is because we did purchase from an unsophisticated owner, but we recognized and we were very communicative with the owner and transparent, and I think the thing that we brought to the table that he was most interested in was our ability to close, because there were a lot of folks kicking the tires, essentially saying, "Oh, I would love to own a laundromat", but they don't know anything about the numbers, and they weren't as open and willing to get through perhaps the SBA process like we did. So long story short, 600k, 10% down, cash flowing business, day one, all in real estate owned.

Ash Patel: That sounds like a lot less work than multifamily, or any other real estate...

Ricardo Torres: [laughs] Yeah.

Ash Patel: It sounds a lot more rewarding, because there's money coming in. You don't have to worry about economic occupancy. Numbers are numbers. Did you say that there was seller financing on this deal as well?

Ricardo Torres: No, there was no seller financing on this deal. The owner was willing to do a certain portion at the very beginning. He changed his mind, and essentially we didn't get seller financing on this. But as I mentioned, the industry does present the opportunity to do that. So especially somebody like the gentleman who owned this place is a little bit older in age now, still willing to get payments from the new owner for a prolonged period of time, as well as a little bit of the cash proceeds from the sell... There's a lot of folks that are in that bucket is what I'm saying. So no, but on this one, Ash, it was just strictly SBA, no seller financing.

Ash Patel: Ricardo, did you say that your SBA lender was in the Midwest?

Ricardo Torres: That's correct.

Ash Patel: Why not find a local SBA lender?

Ricardo Torres: Great question. So we looked, Ash; we looked at local banks, local credit unions. There were two that were compatible with SBA, but their terms were not as strong as this one from this bank from the Midwest. So that's why we went with it.

Ash Patel: Interesting. So not every SBA loan is the same.

Ricardo Torres: Yes, that is correct. So earlier, I mentioned that the bank produces the loan, but they are governed by the government in terms of certain guidelines. And we've looked at four or five different banks for SBA, and you will see certain things that will remain constant; the 90% leverage, or the 10% down was fairly constant among the two or three banks that we looked at. What was different was, obviously, you'll see different interest rates, different requirements from the borrower... They're not all the same; certain banks have a little bit more leverage and ability to do more for the borrower than other banks. So that was a learning process for us, because we were so used to just casting a wide net for multifamily, and then looking at very similar banks, and then tweaking only a small couple of things... But with SBA, it was slightly different for us. And it's still a learning process for us as we continue to navigate how we underwrite future deals, and look at SBA if that's an option for us as well.

Ash Patel: And that's great to know, because again, I thought all SBA lenders went off of a cheat sheet so to speak, where all their terms are the same. Great to know. Did you have to prove yourself to the SBA or to the lender? "You guys are multifamily investors; what do you know about laundromats?" Was there an interview process?

Ricardo Torres: Yeah, most definitely. Great question. We did have to prove ourselves. The deal stands alone and holds itself up from a debt service coverage ratio perspective, or from a margin perspective. But the lender does have an interest in "Alright, does Ricardo know how to run a laundromat? Yeah, you can take care of apartment complexes, but what are you doing with a laundromat? How do you run it?" So yes, the interview process was not a traditional in-person, or via Zoom, or anything, Ash. But it is a series of questions, it is a presentation of a business plan. It is the fact that we are W-2 employees, that did help us in this case, because the lender wants to look at a couple of things... Does this cash flow by itself? Are you using this loan to try to rescue one of your other assets, perhaps that is not performing very well? So they want to look at the profit and loss statement, they want to look at other business plans and determine whether or not you were successful in doing those, because they are so meticulous. But we've kept excellent records, and our level of organization, I would say, is very high. So when they asked for this from us, it was simply a matter of going back into our files and producing whatever file via email or Dropbox or whatever they want to see. But they do ask you a lot of questions; it does not mean that you have to have a absolute specific or intimate knowledge with an industry. But if you can demonstrate - like McDonald's talks about, right? McDonald's is not so much in the business of selling burgers or in the business of real estate. So if you can demonstrate to them that you know how to balance numbers, that you've dealt with cash flow before, that you've been in the industry, whether it's multifamily or other office retail space for a little bit, those things are absolutely going to need to be captured and then communicated, and they're going to help your chances, most definitely.

Ash Patel: And this is fascinating. So they want to gauge the health of all of your other businesses as well, so you're siphoning money. Very interesting. The $250,000 purchase price of the business - was that a first year write-off? Do you get to write the whole business purchase off?

Ricardo Torres: Yes, to my knowledge, you do get to write the whole business process off. I won't speak to the minutiae of the details behind that, Ash, but we've already had conversations with our CPA and attorney and going over that topic to ensure that that's something that we maximize. So it's either a large percentage of it, or the full amount.

Ash Patel: Yes. And then you can even cost seg the $350,000 real estate side as well.

Ricardo Torres: Yes, most definitely.

Ash Patel: So you guys have some crazy negative K-1s coming to you. Do you have investors on this deal as well? I don't know why you would...

Ricardo Torres: No, this is a joint venture between myself and my business partner. He and I - [unintelligible 00:17:42.23] you've had him on the show before as well. He and I are in all the other multifamily deals ourselves. But no, nobody else. But it brings up a good point, Ash. We've interacted with a lot of different folks, and I'm very transparent, because it's part of how I build rapport with people and how I network... But they tell me, "Hey, Ricardo, count me in, man. What do you need? Do you need $50,000? Do you need $100,000 for this deal? I want to be penciled in, I want to learn about this industry as well."

So it's interesting, putting all the money and the numbers and stuff aside, I like business, because I get to pull on some different strings that I never got to pull on with multifamily. Multifamily is phenomenal in that if you have the appropriate property manager in place as you manage the asset, and if it's vertically integrated enough, you can be very, very passive with it. But what about the folks who don't want to be as passive, who have a little bit more of a propensity to want to actively run something, or be a boss, if you will. So I've always had this entrepreneurial spirit in me, and this kind of tugs on those strings for me. This kind of pushes those buttons, and I'm really very much enjoying owning the laundromat, seeing the immediate cash flow... And we're talking cold hard cash, in your hands, and coins. I've got more quarters than ever before these days.

Break: [00:18:56.06]

Ash Patel: Speaking of passive, I've historically advised people that want to buy car washes or laundromats, because they think it's passive. I tell them, "You're buying a business, you're inheriting a job." Talk to us about how passive this really is.

Ricardo Torres: Yeah, that's a really good point. And this perhaps is going to turn some listeners off, because for those of you out there who think that owning a business that already has systems in place, that it's easy-breezy, it's not; I'm going to break it to you. But it's manageable. I always say, how do you eat an elephant? One bite at a time. And that's how I think about things.

So on average, I'm spending around, I'd say about 10 hours a week at the laundromat, Ash. So about 40 hours a month, and then there are certain weeks that are less, certain weeks that are more. The laundromat involves a good amount of attention. There's an attendant here who looks over things; that person is not 24 hours, we're also not open 24 hours. But coins need to be counted. Cash needs to be sorted through. There needs to be attention to machines that break, there needs to be attention sometimes to customers who have questions or concerns. You have to ensure that the property itself is functioning in a manner that is representative of the brand that you are bringing forth.

The one thing about business that I will absolutely emphasize that everybody needs to recognize is you can have it one day, and then it just goes kaput the next day. With a multifamily asset, with an apartment complex, that's not so much the case. It will be a slow dwindle down process of that apartment complex going kaput. But a business - if I don't unlock that door in the morning, customers will not come. If customers do not come, revenue is not generated. So it requires some bit of effort.

What I will say - and here's the bright side, in addition to cash flow - is this: you can automate a lot in 2022. There is so much you can do to give yourself back time, which time was what I'm after, and I know is what a lot of your listeners are after. It just so happens that money gets us [unintelligible 00:21:52.17] sometimes.

One example of that is we installed a sophisticated mag lock on our front door, which opens and closes at a very specific time. It essentially cancels my need to have to go open and close the laundromat every single day. Automatic Wi Fi lighting will be installed at the laundromat at the beginning of next month. So 15 minutes prior to opening, the lights come on. When the lights come on, customers outside see "Oh, the laundromat's open."

So those are two small examples of automation that you can implement to help make your life a little easier, and now reduce that 10 hours a week to perhaps eight, and then you can continue to drive that number down to seven or six. It is going to cost a little bit of money to do some of these things, but you're paying for your time to come back to you. So from that perspective, it is a little bit more active.

Ash Patel: Ricardo, in addition to adding vending machines, ATM machines, what other value-adds can you add inside your four walls?

Ricardo Torres: You hit on two: vending machines, ATM machines... Snack machines are phenomenal. For a laundromat there's a lot of different things you can do. We have a soap dispensing machine. So we sell Tide, [unintelligible 00:22:57.08] these types of things. A lot of folks come in and they don't have a hamper to take the clothes out in, so we sell bags. The bag is a big hefty bag, that allows for them to put their clothes in something and then leave with it.

In addition to that, there are services that you can provide that are tremendous value-add, that if you have an unsophisticated prior owner or a business concept that is antiquated... The first that comes to mind for a laundromat is wash/dry/fold services. Wash dry/fold/services - you come into my laundromat, and you do not have time to sit there and to wash all your clothes and to dry it, and then to fold it. Instead, I charge you a little bit more and you say "Hey, Ricardo, can you wash all this? Can you dry it? Can you fold it?" And I charge you a little bit more than what is required of you to wash it and to dry it. But essentially, you now have your time to go back and to go do your thing. You don't have to wait in your car, you don't have to get on Wi Fi... You can go back to your business and you can come back in three hours and everything is washed, dried, folded for you, and it's waiting on you. So that's a tremendous value-add that was non-existent in this laundromat, and we are slowly rolling this out. The attendant has a badge that's coming in this week that says "Ask me about wash/dry/fold." We've already on a preliminary basis asked our customers "Just hypothetically, what do you think about this?" And they're like, "Yeah, for a couple bucks more I'd pay you to do it." And I'm like, "Let's go!" So we're super-excited about a lot of different endeavors.

Ash Patel: Dang, now you're talking. Anytime I work from home, that's all I'm doing, is moving loads from the washer, the dryer, and--

Ricardo Torres: [laughs] I hate it.

Ash Patel: Hell yeah.

Ricardo Torres: You need to come into the laundry, Ash.

Ash Patel: You're not kidding. Now, I have to ask, how often do these things break? What happens when they break?

Ricardo Torres: Yeah, great question. We've got 25 washers, 21 dryers. Currently, right now, I've got one washer offline and one dryer offline. On an average month, I have about two washers that go down and about two dryers that go down. The majority of the fixes though I'm learning are fixes that I can handle by myself. The lint gate mechanism is not sitting flush with the backstop, and as a result, the dryer won't work. The lint bay is too dirty; that's a regular thing that I should be looking at and the customers should be looking at as well.

Sometimes -- we have a speed sensor issue outside right now with one of the washers, but that should be all-in in some of your operating expenses, the amount of money that you're going to pay in maintenance costs for upkeep; it's the same with an apartment complex. An air conditioner, or a heater, or a sink, or a toilet... So these are expected costs, and we mitigate this through good cleaning, the purchase of quality products, that are going to last a prolonged period of time. So the machines that we have, or the furniture, fixtures and equipment, essentially, within our business, are all robust, good machines, with the exception of four that are still quality machines, but they're older washers, and we'll phase those out in the next couple of months or years.

Ash Patel: And new washers are five, six grand?

Ricardo Torres: Yeah, roughly. It depends on the size; in the industry, you're looking at anywhere from a top load, which is around a 10-pounder, to a 60 or 70-pounder. The 60 or 70-pounder could be going from $15,000 these days, whereas the 30, or the 40 load, which is that traditional stainless steel front loader that you see that holds a couple of loads of laundry, could be going for something between seven or $8,000 these days. And that's ballpark figures.

Ash Patel: Got it. I want to dive back into the numbers... You're gonna have some major negative K-1s because of all your tax write-offs. Did you consider selling those tax write-offs? And here's what I'm saying... your down payment was $67,000. You could have easily brought somebody in for $100,000 and said, "Hey, we'll give you $200,000 of cost seg." Bring somebody in for 50k and give them 250k of cost seg. So you literally could have walked away with cash on the purchase of real estate and a business on day one...?

Ricardo Torres: Yes. That's a really good point.

Ash Patel: Did you consider it?

Ricardo Torres: No. To be honest with you, we did not consider that. And if we did, it was probably short-lived. And I'll be transparent, and I'll tell you why. It was our first business venture, and when I put my stamp on something, and my business partner [unintelligible 00:27:10.14] stamp is on something, I want to be sure that it's as thorough as well thought out and tight as possible. Now, while we could have pursued that route, and that does pose a tremendous cash benefit to us, going into an asset and not having to come out of pocket essentially, and bringing somebody else in for a benefit to someone else... We wanted to model our first business purchase by ourselves, essentially. I will say we're looking at other businesses, in other regions of the United States, and I can tell you that this will absolutely be first and foremost on our mind as we think about what it requires for the downpayment, how we involve others, and how we minimize that amount for us. That's a really good point; we did not on this first deal now.

Ash Patel: Keep it in mind for the next one. And also, if you yourself can use the cost seg, obviously it's not worth giving that to an investor. Ricardo, listen, people are chasing these things left and right... What are cap rates on laundromats?

Ricardo Torres: They're fluctuating, South Carolina is where our multifamily assets were at, so they were floating around 5% to 8%. I can't speak for the rest of the country, Ash, because I have not actually looked at other states. I know you're in a little bit of business elsewhere. What are you seeing? Where are your assets at? Are you in a couple of states?

Ash Patel: Yeah, we're all over the Midwest, and heavily concentrated in Atlanta, Cincinnati...

Ricardo Torres: Okay, alright. Got it. So I'm not sure what the numbers we're looking at over there, if they're extremely high, or if they're extremely low, but we're looking at something around 8% to 11% here in Tucson for certain businesses based on what I've seen.

Ash Patel: Okay. So you guys are going to add a tremendous amount of value to this business, and to the real estate. And listen, we're value-add people, right? This is what we do - we turn and burn and make money. Have you considered selling off the business, and putting the lease back to the real estate? But beyond that, I know you're cash-flowing, and I know it's tempting to just hang on to something that's cash-flowing... And it seems like there's no end to this cash flow, it's only going to go up. But is there some of that discipline that comes back, and saying, "Look, we can walk away with half a million dollars or more, in no time at all"? So where does that discipline versus wanting all that money - what is that [unintelligible 00:29:24.24]

Ricardo Torres: Yes. That's a really good point. We have entertained this. I think a reposition is in place before we actually do that. You need to reposition it to make it a almost seamless business transition for the new business owner, if you will, especially from that triple net perspective, and looking at things and saying, "Oh, man, we can still own this real estate, but have the lease back to some other entity." I think where I hang my hat with this, Ash - and this is a moving target that I've thought of over a period of time - is when do these things happen? Can I continue to sustain these operations? In the military that's one of the questions we ask ourselves, is "Are these operations sustainable?" If the answer to the question is yes, then continue on until you don't want to do it any longer, until you essentially can't do it any longer.

So for us, we're going to continue to hold everything as it is. I think if we continue to recognize our ability with economies of scale to roll them up, or to scale this laundromat, it's going to be based on whether it's worth our time or not, and I can tell you right now just peeking around the corner, it seems as though it's going to be worth our time. There's a lot of meat on the bone with this, and so long as that continues to be the case, and we continue to automate processes, and ensure that there is a strong operator in place, even if it's a general manager, and then we sit on the backend here, and just still collect cash flow, and everybody else is happy, I'm going to leave things the way they are.

If something changes where I'm not geographically tied to Tucson, Arizona, for example, then I'll absolutely entertain the former route... Because in that case, I can't do anything here physically. Unlike an apartment complex, with a business I think sometimes you do need to be physically present with certain aspects of the business; not to say you can't do it, but based on my experience - and its little experience so far, caveat with all this - it's still something to consider and it's something that is on my mind.

And so as long as it's not broken right now, Ash, it's cashflowing well, the business will continue to appreciate in value as we continue to increase the revenue, and I know the real estate will over a period of time, we're not going to change the current construct of this laundromat for sure.

Ash Patel: I can't help but think of Mike Tyson's quote, "Everyone has a plan, until they get punched in the face", and I'm thinking with real estate people, everybody has a plan until they get an unsolicited offer. [laughter] I wonder man, "If somebody made you a stupid offer...?

Ricardo Torres: Oh, yeah...

Ash Patel: You're not emotionally tied to it. I get it, it's part of your bigger plan on scaling... But if somebody made you a stupid offer, would you be disciplined and hold it to finish your plan of scaling? Or would you be like "Yeah, man. Let's go."

Ricardo Torres: It depends on how stupid enough the offer is. [laughs] [unintelligible 00:32:07.22] stupid, I can't turn a blind eye to it. I'm gonna be honest with you, I'll absolutely entertain that, especially in the short period of time, right? If somebody comes up to my door and knocks on it in five months and says "I'll offer you double what you paid for it", wooh, that's tough, right? Because now I'm thinking to myself, "Alright, how much effort have I put into this? I could clearly walk away with some significant lessons learned, and then scale into something larger", which we all know - it's one of the questions that you always ask a new investor/owner, is what you wish you would have done differently? And oftentimes they respond with, "I wish I would have gone bigger." So that stupid offer allows for the opportunity for you to say, "Okay, I'll cash in here, and I'll go bigger on this next." So I don't know, we'll see. I'm open to these offers though, so you know where to find me.

Ash Patel: Ricardo, I know you've got a lot more going on. We didn't get to touch on anything else, we deep-dove in the laundromat... But I'll tell you, we've learned a lot from it. I know a lot of real estate people are looking to pivot, for whatever reason, into businesses. So I've gotta thank you again for sharing all this knowledge, sharing your time with us. I've learned a lot, and I know the Best Ever listeners have as well. Ricardo, how can the Best Ever listeners get a hold of you?

Ricardo Torres: Thank you, Ash. I really appreciate that, and I think it's totally fine as long as you're okay with it. So you can find me on LinkedIn at Ricardo Torres, or you can email me at Ricardo [at] vectoredequity.com. Or just get on the vectoredequity.com, you can learn a little bit more about us, our assets, contact us... I mean it, reach out; I'm happy to help out with anything you have. And then go through a little bit of that journey on what it means to pivot, how you do it, what the lessons learned are... And then I'm happy to talk to other W-2 workers out there who are balancing what they currently have... And it could be a demanding job, right? Combat aviator, accountant, attorney, doctor, whatever it may be; it doesn't matter. But the balance is a nuanced game that I don't think we talk enough about. So please reach out there as well. I'm happy to help out.

Ash Patel: Ricardo, I want you to email me the next time you want to come back on here. It was fascinating. And I know, again, we didn't cover a lot of what else you have going on, but again, thank you for your time. Thank you and your family for your service and your sacrifice, and Best Ever listeners, thank you for joining us. If you enjoyed this episode, please leave us a five-star review, share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.

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