Why Buying Cash Flowing Businesses Instead of Real Estate Is Gaining Momentum
In this episode, Buck J dives deep into the strategy of buying cash flowing businesses instead of real estate and why more investors are shifting their focus in 2025. For wealthy professionals and seasoned investors looking to diversify beyond multifamily, this approach offers immediate income, operational control, and scalability without relying solely on market appreciation. Rather than waiting for rent growth or cap rate compression, business acquisitions can generate strong cash flow from day one when structured properly.
Buck explains how this strategy aligns with investors who want to leverage their leadership skills, access SBA financing, and create forced value through operational improvements. Just like value add multifamily investing, buying businesses allows investors to increase profitability through better systems, pricing, and management. The difference is that revenue growth in a business can often move much faster than rent growth in stabilized real estate.
The Case for Business Acquisitions in 2025
Buck highlights several macro trends driving interest in buying cash flowing businesses instead of real estate. Baby Boomer business owners are retiring at record levels, creating acquisition opportunities across service, manufacturing, and local operating companies. At the same time, lending programs such as SBA loans allow buyers to acquire businesses with favorable leverage compared to many commercial real estate loans in today’s higher rate environment.
He also discusses how inflation, national debt, and currency concerns are pushing investors to seek assets they can directly control. In a business, you can increase margins, adjust pricing, improve marketing, and streamline operations. That level of hands on control can create more predictable outcomes than relying entirely on market driven rent increases.
How Buying Cash Flowing Businesses Compares to Multifamily
For Rod Khleif’s audience of multifamily investors and high income professionals, the comparison is especially relevant. Both strategies rely on underwriting, due diligence, and value creation. Both require strong leadership and systems. However, buying cash flowing businesses instead of real estate often involves:
• Faster value creation through revenue growth
• Greater operational involvement
• Shorter hold periods in some cases
• Opportunities to scale through add on acquisitions
Buck emphasizes that this is not about replacing real estate entirely. It is about intelligent diversification. Real estate provides long term stability and tax advantages, while businesses can generate higher immediate cash flow and potentially higher multiples upon exit when growth is demonstrated.
Key Risks and How to Mitigate Them
No investment is without risk, and Buck is clear about the realities. Business acquisitions require strong due diligence on financial statements, customer concentration, and operational systems. Unlike real estate, where the asset itself retains intrinsic value, a business is heavily dependent on its processes and people.
To mitigate risk, Buck advises investors to focus on established companies with consistent historical earnings, recurring revenue, and strong management teams. He also recommends conservative underwriting, ensuring debt service coverage is solid even under stress scenarios. The same disciplined approach used in underwriting multifamily deals should be applied to buying cash flowing businesses instead of real estate.
About Buck J
Buck J is an investor and entrepreneur who has built wealth by investing across multiple asset classes, with a particular focus on acquiring and operating cash flowing businesses. He is known for his contrarian thinking, macroeconomic awareness, and practical strategies for creating income beyond traditional real estate. His experience spans business acquisitions, alternative investments, and strategic portfolio diversification for high net worth individuals.
This episode provides a compelling framework for professionals who want more control over their income and are exploring buying cash flowing businesses instead of real estate as part of a broader wealth strategy. If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
Buying Cash Flowing Businesses Instead of Real Estate FAQ
What does buying cash flowing businesses instead of real estate mean?
Buying cash flowing businesses instead of real estate refers to acquiring established companies that already generate consistent profit and positive cash flow. Rather than purchasing rental properties and relying on rent growth or appreciation, investors purchase operating businesses with proven revenue, customers, and systems in place. The goal is to step into immediate income while improving operations to increase value over time.
Why are investors considering buying cash flowing businesses instead of real estate in 2025?
In 2025, many investors are exploring buying cash flowing businesses instead of real estate due to higher interest rates, compressed real estate margins, and increased competition for multifamily assets. At the same time, a wave of retiring Baby Boomer business owners has created strong acquisition opportunities. Businesses can often be acquired with favorable financing and may offer faster income growth compared to stabilized rental properties.
How does buying cash flowing businesses instead of real estate create wealth?
Wealth is created by acquiring a business at a reasonable multiple of earnings and increasing its profitability through operational improvements, marketing, pricing adjustments, or cost efficiencies. As net income grows, the business becomes more valuable based on its earnings multiple. Investors can then refinance, recapitalize, or sell the company at a higher valuation, similar to forcing appreciation in multifamily real estate.
What types of businesses are best for buying cash flowing businesses instead of real estate?
Service based businesses, essential local businesses, manufacturing companies, and recurring revenue models are often strong candidates. Companies with consistent historical earnings, diversified customer bases, and experienced staff are especially attractive. Many investors prioritize businesses that are not heavily dependent on the current owner and have systems already in place.
How is buying cash flowing businesses instead of real estate financed?
Many acquisitions are financed through SBA loans, seller financing, private capital, or a combination of debt and equity. SBA financing can allow investors to purchase businesses with relatively low down payments while maintaining strong leverage. After improving cash flow, some investors refinance or restructure debt to improve terms and free up capital for additional acquisitions.
What are the biggest risks when buying cash flowing businesses instead of real estate?
The primary risks include inaccurate financial reporting, customer concentration, operational disruptions, and management challenges. Unlike real estate, where the physical asset provides baseline value, a business depends heavily on people and systems. Thorough due diligence, financial verification, and transition planning are critical to reducing these risks.
How does buying cash flowing businesses instead of real estate compare to multifamily investing?
Multifamily investing typically focuses on improving property operations and increasing rents to drive higher net operating income. Buying cash flowing businesses instead of real estate often allows for faster revenue growth through operational adjustments and market expansion. However, businesses may require more active involvement, while multifamily can provide more passive stability once stabilized.
Is buying cash flowing businesses instead of real estate suitable for high income professionals?
Yes, many high income professionals pursue buying cash flowing businesses instead of real estate as a way to diversify income streams and accelerate wealth building. With the right team and management structure, professionals can oversee strategy without handling daily operations. This approach can complement a real estate portfolio while providing additional control over income generation.
How long does it take to see returns when buying cash flowing businesses instead of real estate?
Returns can begin immediately if the business is already profitable at acquisition. Unlike ground up development or heavy value add real estate projects, cash flowing businesses can generate income from day one. Growth initiatives implemented post acquisition can further increase profitability within months if executed properly.
Can buying cash flowing businesses instead of real estate replace a real estate portfolio?
For some investors, it can become a primary wealth building strategy, but many use it as a complement rather than a replacement. Real estate provides long term asset stability and tax advantages, while businesses can offer stronger short term cash flow and scalability. A diversified approach that includes both asset classes can balance risk and opportunity.
Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.
01:19:42:03 – 01:20:07:19
01:20:07:26 – 01:20:26:06
Rod Khleif
Welcome back to lifetime cash flow to real estate investing. I’m Rod Khleif, and I’m thrilled you’re here. And got a real treat for you guys today. I’ve got Buck Jeff Ryan who’s been on my show, and he’s got his own podcast. That’s a very good podcast called The Wealth Formula Podcast that I’ve been on, as well. And, we’re gonna have some fun today.
01:20:26:06 – 01:20:27:28
Rod Khleif
Buck. Welcome back brother.
01:20:28:00 – 01:20:29:27
Buck Joffrey
Yeah, thanks for having me, rod.
01:20:30:00 – 01:20:41:17
Rod Khleif
Of course, of course. So it’s been a long enough where probably ought to have you tell your background a little bit more. Why real estate? Maybe where you started and. And, kind of bring us current. So why don’t we start there, buddy?
01:20:41:19 – 01:21:08:00
Buck Joffrey
Yeah. So I am, you know, sort of your classic, a student, I was, guy who was sort of on that path, get good grades, went to, fancy college, went to medical school, started out as, neurosurgeon, and then ended up, you know, shifting in there, doing some more, different kinds of things within medicine.
01:21:08:02 – 01:21:35:25
Buck Joffrey
But, yeah, back in 2000, eight, 2009, when I finished, training, I actually kind of got inspired by reading one of these purple books, Robert Kiyosaki. And so a lot of people do and, I discovered, for the first time in my life that, hey, I’m actually, you know, I’m an entrepreneur. I mean, I’ve been going through the motions of this, this world that that’s created, for us through the educational system.
01:21:35:25 – 01:21:59:09
Buck Joffrey
But, the, the entrepreneurial stuff really, you know, really got me excited. And so I started, I started actually just sort of doing more stuff within, business, the business medicine initially and started making money. My family is, is a real estate family. So when I started making some money, I shifted into buying apartment buildings.
01:21:59:12 – 01:22:22:27
Buck Joffrey
And, at that point was trying to figure out, hey, you know, what am I supposed to do as a high paid, you know, professional? You know, in terms of personal finance, I mean, I, I’m not interested in doing the things that everybody else does. Find your wealth manager and, you know, give them all your money and, you know, check in once a year.
01:22:22:27 – 01:22:45:25
Buck Joffrey
That’s not what I was interested in. So I started listening to a bunch of podcasts. Right. And, you know, just trying to learn the way a lot of people do. I found that there was a little bit here for me, a little bit there, but there was really no podcast focused on the high paid professional looking at alternative assets, personal finance, macroeconomics and ways that were different.
01:22:45:27 – 01:22:59:17
Buck Joffrey
And so I just started my own podcast and that was Wealth Formula podcast. And then that was 2014. So so it’s been a while and then I’ve been doing this for, you know, since before it was popular. I think you have to. And so yeah, that’s pretty much a story.
01:22:59:20 – 01:23:06:28
Rod Khleif
Wow. Wow. So what, are you just in multifamily now? Are you doing other asset classes as well?
01:23:07:01 – 01:23:33:22
Buck Joffrey
No, I’m in other asset classes. Actually, the, some of the more interesting things, we’ve done recently, for example, we have gotten into aircraft, and so, it’s a very interesting space, actually very similar to real estate, because what we’re doing there is, you know, buying, you know, potentially buying some like, engines or aircraft, like, for example, we had one for Air Portugal.
01:23:33:22 – 01:23:58:26
Buck Joffrey
We bought an aircraft there, at least it out. Those end up being very similar to real estate in that it’s essentially a triple net lease. Right. And the tax advantages are huge because unlike, in real estate, where you have to do a cost segregation analysis to get your, your depreciation, the entire thing is, the entire thing is personal property.
01:23:58:28 – 01:24:15:01
Buck Joffrey
So if you have leverage, if you have 50% leverage, you actually get, you know, twice as much losses on your K-1 than you actually invested. So very interesting. We just, we just actually exited our first, round. Did really, really well on that. But yeah.
01:24:15:01 – 01:24:20:05
Rod Khleif
So did you partner did you partner with somebody that’s that’s got some experience? I’m assuming that’s the case.
01:24:20:08 – 01:24:49:12
Buck Joffrey
Yeah. The way our, the way my model works is. Listen, I have, my own expertise, but I’m. I’m smart enough to know that I’m not smart at a lot of things. And so, in this particular case, my my brother’s, very sophisticated, guy used to, run the sovereign wealth fund in one of the Middle Eastern countries and, huge, huge contacts in all across the world.
01:24:49:12 – 01:25:16:23
Buck Joffrey
And we actually had an opportunity to, to join up with, one of his contacts who’s been in aviation, you know, for 40 years. And, you know, that that particular contact is, just a wealth of information and, and has done extremely well. We convinced them to do a retail fund, because they’re used to, you know, they’re used to doing institutional funds.
01:25:16:23 – 01:25:19:09
Buck Joffrey
Right. So, but again.
01:25:19:11 – 01:25:23:18
Rod Khleif
My explain the difference. Explain the difference real quick if you would, please.
01:25:23:21 – 01:25:58:12
Buck Joffrey
Yeah. So generally those kinds of opportunities, they’re not really available to people who can invest $50,000 or $25,000. Those kinds of funds are, you know, when you’ve got like, you know, big offices or, you know, private equity that’s going to put in seven figure, eight figure checks at a time. So the goal for us was, okay, how can we take something that has been traditionally a, you know, an asset class that is not something for us, right?
01:25:58:12 – 01:26:05:01
Buck Joffrey
It’s out of our reach. How can we bring that to people who can invest in those 25 and 50 grand, 100 grand at a time?
01:26:05:03 – 01:26:23:24
Rod Khleif
And so tell me, give me some more detail on the dealers. Yeah. So I just wanted my listeners to hear the difference between, you know, industrial enterprise level investment, like, you’d like it’d be a Wall Street bank or private equity, like you said, versus retail, which is what we do in our syndications we raise money from private investors.
01:26:23:26 – 01:26:34:06
Rod Khleif
But but talk about that specific deal. If you wouldn’t mind. I’m just just for my own edification. I’m just curious, you know, you bought a jet. How much? How much? Oh, yeah. Give me some numbers. Just. Yeah.
01:26:34:06 – 01:26:58:18
Buck Joffrey
So? So it’s interesting. So we, you know, the, the one for Air Portugal? That was, you know, it was a it was actually a used jet, and, it was a smaller jet, but as a, you know, passenger jet, and it was about but about 5 million bucks. And then the engines were about a couple million dollars apiece.
01:26:58:20 – 01:27:21:19
Buck Joffrey
And essentially what you can do because right, in these if you, if you imagine, you know, how banks land, right, right. And you can get debt on this all day long because you’re, you know, our engines were rented to, Delta Airlines. I mean, and these leases that we have with the, with the airlines are rock solid, right?
01:27:21:19 – 01:27:46:23
Buck Joffrey
There’s they’re not getting a lot of these things. Right. So banks are all over this so we could get, you know, we can get, you know, 75% leverage easily. Now you don’t always in real estate. You don’t always want to. Of course you don’t want that kind of. Right. But in these kinds of things they’re extremely predictable. And so the markets are extremely predictable on exit as well.
01:27:46:26 – 01:28:11:22
Buck Joffrey
I was actually amazed at how, you know, how formulaic all of these things are. And when we exited, it was I mean, it was pretty much we actually ended up doing really well in part because, well, we had some good luck. There was some, in addition to the formulas that were used and stuff like that, there all of a sudden was a bunch of froth in the market.
01:28:11:25 – 01:28:32:13
Buck Joffrey
And as soon as that froth came, we had a fund that was supposed to go for five years, but we exited at two years and we ended up get the same returns. We doubled everybody’s money in two years. Nice. And I’m not saying that, you know, as you know, I’m, I’m not saying that’s, that’s what you’re going to get every time, but.
01:28:32:20 – 01:28:34:03
Rod Khleif
No, of course not. Right.
01:28:34:08 – 01:28:52:12
Buck Joffrey
At the end of the day, it’s like, you know, when you have these opportunities and you’re with operators, like, for example, right now we’re not doing a new fund because there’s still froth in the market. We’re going to wait. We’ve got the right guys to know this market. I don’t know this market, but there are nuances in this market that that these guys know.
01:28:52:12 – 01:29:07:10
Buck Joffrey
They know when to go in and when to come out. My goal is really just to provide the capital reach. Yeah, yeah. The capital and the bridge between my investors and people and groups like that. Because I mean, what.
01:29:07:13 – 01:29:15:14
Rod Khleif
What are their what are their asset classes have you done I mean, that’s that’s one we’ve never I never talked about planes on this show, but it’s fascinating. What else have you done?
01:29:15:16 – 01:29:37:06
Buck Joffrey
But mostly we’ve been sticking to real estate. Right. But then real estate, real estate, even within, real estate, it’s been, you know, self storage, you know, those kind of self storage is great. And to another thing that’s essentially, a business. Right. But it, it involves real estate. And, we’ve had some really good luck in that space.
01:29:37:08 – 01:29:59:10
Buck Joffrey
Mostly we’ve done multifamily. We’re trying to shift again because of my, you know, my brother’s, my partner right now, and he he has a lot more experience in the private equity side. So we we are starting to look at different things. I mean, like, for example, this airline thing, you know, it was entirely his, you know, his creation and his contacts.
01:29:59:12 – 01:30:22:26
Buck Joffrey
We’re just constantly looking to see if there’s other things, hoping to look at potentially businesses. Because I think that’s something that, again, you know, private equity, big money has a monopoly on these things. But, you know, if you can get if you can get, you know, so you roll up now 5 or 10 businesses that are, are throwing off a couple million dollars each.
01:30:22:26 – 01:30:30:22
Buck Joffrey
Well, all of a sudden you’ve got these, you know, valuations, you can put them together and sell for a higher valuation. So I got.
01:30:30:22 – 01:30:40:11
Rod Khleif
It I got a I’ve got a, I’ve got a orthopedic surgeon in my warrior program, my coaching program that’s doing exactly that. He’s rolling up offices and rolling up paving companies right now.
01:30:40:11 – 01:30:41:08
Buck Joffrey
Yep, yep.
01:30:41:11 – 01:30:48:21
Rod Khleif
So, so, but yeah, because you can buy them at a certain multiple of Ebit, and then you can sell them at a much higher multiple.
01:30:48:21 – 01:30:49:28
Buck Joffrey
And exactly.
01:30:50:00 – 01:31:04:28
Rod Khleif
He’s in the midst of doing that right now. One of my students and and so yeah, I love businesses too. There’s 10,000 people a day turning 65 in this country. Okay. And a lot of them want to retire and a lot of them own businesses. So, you know, we’re also doing senior housing, which is very exciting in that same vein.
01:31:05:01 – 01:31:20:15
Rod Khleif
So but let me ask you a question about self storage. You know, before we started recording, we started talking about some of the some of the pain in the marketplace right now, which I’ve experienced. You’ve experienced, you know, with pain. Excuse me. With pain comes incredible opportunity as well. What have you seen in the self storage space?
01:31:20:15 – 01:31:26:26
Rod Khleif
Have you seen the same pain? What’s, is it comparable? Is a different. If you could speak to what’s happening in that environment.
01:31:26:29 – 01:32:00:22
Buck Joffrey
Self storage has been remarkably stable. You know, I think I think that if you think about it logically, like, you know, the thing is that people have stuff they have to put somewhere. Right? And it becomes almost like a noose around people’s neck because they can’t do anything. And so, you know, you want to, you know, you want to be sensitive about raising, raising, rents, but, you know, but, but but on the other hand, if you end up, if you end up raising like, five bucks, people are not going to people are good.
01:32:00:22 – 01:32:20:03
Buck Joffrey
Right? But you multiply that times a, you know, a couple hundred, units every few, you know, every six months it ends up becoming a bigger thing, you know? Right. I think at the end of the day, I think the biggest issue, with pretty much all real estate, one of the things that it’s just a matter of, of debt, right?
01:32:20:03 – 01:32:42:20
Buck Joffrey
I mean, I think debt becomes the, the concerning thing. Fortunately, you know, self storage, we’ve been able to do just fine. But, you know, if, if, if, if the rates hadn’t gone up the way they did, we would have done extraordinarily well, you know, and so I think I think is an asset class, I think it’s, it’s still fantastic.
01:32:42:23 – 01:33:01:18
Buck Joffrey
I don’t think it’s, it’s depressed, like multifamily. I mean, multifamily right now is seriously depressed is, you know, I mean, we’re right. We’re, we’re still buying things that are 30%, 40% discounted. If you just look at cost bases compared to 2 or 3 years ago.
01:33:01:21 – 01:33:21:01
Rod Khleif
You know, I’ll give you an example. I there’s a, we have a 200 unit asset in San Antonio. Right next to there’s a 300 plus unit asset. Is sold for 43,000,000 in 22. It’s that it’s with the bank. It’s down to 28 now. And I’m not even instruments. It hits 24. Same vintage as the one we have, which is 95% occupied.
01:33:21:01 – 01:33:35:20
Rod Khleif
So it’s a, you know, I’d love to have it. I’d love to have 500 plus units right next to each other. But, you know, that’s what’s out there right now. And so you know, very, very interesting times. So there’s a lot of pain in the market, but it’s also a lot of opportunity, also a lot of opportunity.
01:33:35:20 – 01:33:49:09
Rod Khleif
And I don’t know if you’ve noticed, you know, expense ratios have gone way up. You know, I used to I teach I teach a 50% expense ratio, and that’s too low at this point. 60% is is is really more like it. So, I mean, have you noticed the same thing?
01:33:49:12 – 01:34:21:01
Buck Joffrey
Yeah. Yeah, absolutely. I mean, I think I think, you know, but I think one of the key things for people to think about and I, and I have been talking about this a lot is, is that as you said, with with the pain comes opportunity, right? The one thing I really hate for people to, to do is to miss out on this period of opportunity, because as as you’ve seen throughout the years, the the distance between pain and froth can be 2 or 3 years.
01:34:21:03 – 01:34:31:11
Buck Joffrey
Yeah, right. And so to me it’s it’s like you, these are times when you have to really get the intestinal fortitude to say it’s Warren Buffett.
01:34:31:12 – 01:34:42:07
Rod Khleif
It’s Warren Buffett’s quote, you know, be, be scared when other people are excited and be excited when other people are scared. You know, it’s just it’s exactly it’s contrarian investing exactly what we’re talking about. Right?
01:34:42:07 – 01:35:06:02
Buck Joffrey
Right. And if you look at the macro picture, we know that, you know, rates have already ticked down. I believe they’re going to continue to tick down because I mean, we’ve got we’ve got a a fed that is is the worst. Just got you know, picked for the, for the Federal Reserve chairman. I mean, he’s already he’s been talking about I think his quote was we can go a lot.
01:35:06:09 – 01:35:23:08
Buck Joffrey
We can cut a lot from here. And I think one of his reasons for that is because of the, the, you know, deflationary pressures of artificial intelligence that he’s foreseeing, which I think, you know, the smart people are seeing, that I’m not sure all bankers are seeing that.
01:35:23:11 – 01:35:39:14
Rod Khleif
But let me speak to that for a second. Let me see. Let me speak to that for a second. You know, I, I was listening to, Elon Musk on Joe Rogan, you know, his late in his latest interview. He’s been he’s been on there more than once and he basically said that, any job in front of a computer, I mean, they’re going to go like wildfire.
01:35:39:14 – 01:36:09:15
Rod Khleif
They’re going to be gone. And and even in the medical space, you know, candidly, I know you’re you’re an MD. I mean, in the medical space, you know, the surgeries could be done robotically here better than a human can do and in very short order. And so, you know, I, I, I, I’ve been I’ve been kind of shouting it from the rooftops, you know, if you’re in a field that that could be impacted by AI, you should, consider, you know, starting to think about a side hustle, be it buying businesses, being buy it, real estate, whatever it is.
01:36:09:20 – 01:36:29:00
Rod Khleif
But get started now. So the when the shoe drops, you know, you’ve you’re already well into something. You know that that you can, you know, reinvent yourself if you have to, you know, and, and I think, I think we’re going to see a lot of pain with this, you know, with this AI phenomenon. I mean, it’s extraordinary what it’s able to do at this point, but it’s going to eliminate jobs.
01:36:29:00 – 01:36:39:08
Rod Khleif
And so, you know, if that if if you’re thinking that’s a possibility and you’re listening, you should be, you know, considering side hustles to start. Do you agree with me here on this but 100%.
01:36:39:08 – 01:37:05:14
Buck Joffrey
And the other thing that I, I think is going to happen is part of this pain is you’re going to see you’re going to see an increase in this disparity between the haves and have nots, because what’s going to what’s what’s going to happen is you’re going to have essentially two classes. You’re going to have people who have investments and people who don’t.
01:37:05:17 – 01:37:32:00
Buck Joffrey
And things things are going to become more valuable. Companies are going to become more valuable. Why? Because I is going to cut their expenses. They’re going to be incredibly productive. People who have assets are going to become increasingly wealthy. Those who don’t are going to unfortunately miss out. And that disparity is already there, but it’s going to get worse.
01:37:32:02 – 01:37:52:21
Rod Khleif
In that vein. In that vein, let’s talk about the U.S currency. You know, I interviewed an economist here in my studio and, I this was over a year ago, and he told me that really 80% of the U.S money supply was created during the Biden administration, that it was we printed 80% up to that point, it was only 20%.
01:37:52:24 – 01:38:24:22
Rod Khleif
And so inflation is not going away. And, you know, in our debt and a national debt keeps going through the roof. And I know, you know, the Supreme Court has got a rule on Trump’s tariff, thing where where the the appellate court struck down his ability to do tariffs. And it’s at the Supreme Court, you know, and I, how do you feel about, you know, the country economically as it relates to, you know, I believe that Trump wants to use those tariffs to mitigate that national debt, if at all possible, but and, and bring manufacturing back into the country and all that.
01:38:24:24 – 01:38:27:11
Rod Khleif
Do you have any thoughts around that at all?
01:38:27:13 – 01:38:53:20
Buck Joffrey
Well, I think I think a lot of people, including me, thought that tariffs would, would, you know, would would spike inflation. We didn’t really see that, you know, and and so, so I, you know, Scott percent was pretty confident that it would not as well. And he thought maybe there would be some transition prices. But listen, I think I think overall, you know, this idea of raising revenue through tariffs.
01:38:53:23 – 01:38:57:15
Buck Joffrey
So far it seems to be working quite well right now.
01:38:57:17 – 01:39:07:12
Rod Khleif
And and he’s able to use it for leverage as well because they’ve been screwing us for years. I mean, did you know he’s able to use it as leverage to bring some of these countries to bear. So.
01:39:07:12 – 01:39:37:28
Buck Joffrey
Yeah, and even on shoring manufacturing, if you think about like the potential, you know, what that means for the US, I mean, it means bringing back jobs. Yes. But also, again, going back to our entire conversation about artificial intelligence and robots and things like that, it actually gives us an opportunity to bring those manufacturing businesses back and to make them more efficient using technology that’s coming through the pipeline.
01:39:38:00 – 01:40:01:01
Buck Joffrey
So net net, traditionally we have always outsourced these things because it’d be less expensive to have other countries do them. But if you can automate and have robots involved, I mean, it’s almost sound science fiction. But I mean, listen, Elon Musk is it’s closed down a good chunk of the car factories, to, to, to focus on the Optimus robots.
01:40:01:01 – 01:40:02:22
Buck Joffrey
This is coming. This is oh.
01:40:02:23 – 01:40:28:10
Rod Khleif
And they and they’ve and they’ve laid off a ton of people. I mean, you know, meta has laid off a bunch of people, Amazon has laid off about, I mean, tens of thousands and and they’re at the forefront of this thing. So, you know, it’s going to hit all businesses here eventually. And and that’s why I want to throw that word of caution out there, not to scare you if you’re in one of these jobs just to just to, you know, I’ve had to reinvent myself 3 or 4 times in my lifetime.
01:40:28:10 – 01:40:39:01
Rod Khleif
And it’s scary. Change is always scary. But by God, being forewarned is forearmed and being proactive rather than reactive is is super important.
01:40:39:04 – 01:41:00:27
Buck Joffrey
And so yeah, there was a I was talking to a younger guy yesterday, was a software engineer. And, you know, he it’s interesting because he’s, he’s, you know, he’s right in the crosshairs of this thing, right? I mean, oh, yeah. And, I was talking to him, and I was like. And he was kind of in denial about this, and I was kind of shocked.
01:41:01:03 – 01:41:18:01
Buck Joffrey
Yeah. You know, and he at some point even called it maybe a little bit of a fad. And I was like, I was like, I, I really don’t want to scare you, but I, I think you’ve got to start thinking about this is your what is it, the Kodak moment where. Oh yeah.
01:41:18:03 – 01:41:22:02
Rod Khleif
The blockbuster Kodak whatever. Yeah. Exactly.
01:41:22:04 – 01:41:31:28
Buck Joffrey
If you don’t if you don’t know if you know that something’s coming down the pipeline, stop the denial. Because otherwise you’re going to you know, you’re going to be blockbuster.
01:41:31:29 – 01:41:47:24
Rod Khleif
You’re going to have some pain. You’re gonna have some pain. That’s it. You know, you can you can avoid that pain if you if you reinvent right now and get started, figure out, figure out what you’d love to do. Started on a side hustle that just nothing you can’t do on the side. Don’t don’t tell me you can’t because you have the time, even with kids and a family.
01:41:48:00 – 01:42:03:19
Rod Khleif
So start your side hustle and and you know, and because it’s going to take time to learn anything. So you have to you have to get started. Yeah. Yeah. No, we’re in a great we’re in agreement on that. So so what’s next for you brother. What are you going to. What are you going to be doing next. What’s what’s what what’s on what’s up?
01:42:03:19 – 01:42:06:02
Rod Khleif
What’s under your radar? What are you looking at?
01:42:06:05 – 01:42:33:28
Buck Joffrey
Well, I mean, I think it’s just a matter of continuing to look at what the market gives us, right. I do I want to be flexible. Traditionally, our, you know, investor group has been real estate heavy. But again, you know, there’s lots of opportunities. I mean, they sell this aircraft thing completely open my eyes. I’m like, it’s yeah, you know, we’re not we’re not we’re just barely scratching the surface on the things that can possibly be available, you know, to retail investors.
01:42:33:28 – 01:42:34:04
Buck Joffrey
So.
01:42:34:05 – 01:42:52:12
Rod Khleif
And yeah, the roll up idea is a phenomenal idea. Like I said, my my student Tyson’s killing it with that right now. And there’s lots of opportunities to do that a, you know, service related business Hvac, plumbers, electricians. Yeah. You know, so on and so forth. There’s just a lot of opportunities, verticals that you could do a roll up in.
01:42:52:15 – 01:43:01:07
Rod Khleif
Yeah. And, and, and and make some nice, nice money and, and so what else are you up to? I think you mentioned before we started recording something about life insurance.
01:43:01:09 – 01:43:12:23
Buck Joffrey
Yeah, it’s it’s interesting because, you know. Right. I have not traditionally been a guy who’s been invested in the stock market very much.
01:43:12:23 – 01:43:14:02
Rod Khleif
I mean, either.
01:43:14:02 – 01:43:41:29
Buck Joffrey
Generally avoided that. And part of it is because I felt like there’s less control. Yeah. You know, it’s just not been part of my DNA. But it’s it’s hard to deny when you look back 50 years, that, you know, people who have consistently been in there have done well. And so one of the things that I got really interested in, and it’s funny, right, I think you used to be involved with Tony Robbins.
01:43:42:02 – 01:43:44:28
Rod Khleif
Oh, yeah. Big time 20, 20, 23 years with Tony. Yeah.
01:43:45:01 – 01:43:49:25
Buck Joffrey
You remember this, the book he wrote on Money Master the game?
01:43:49:27 – 01:43:53:10
Rod Khleif
Yeah. Great. Great book. Yeah. Great book.
01:43:53:13 – 01:44:25:06
Buck Joffrey
There was a there was a section in there when I read this a few years back, I really wanted to follow up on it. And Tony was talking about a product that a lot of, you know, high net worth people use where you can essentially take the upside of the stock market. Basically meaning when the market goes up, you can take the gain, but when the market goes 20 blows, you know, it loses 20 loses, 50 like it has multiple times in the last few several decades.
01:44:25:08 – 01:44:52:17
Buck Joffrey
You don’t participate. And so I was fascinated by this idea and got interested, got an insurance producer’s license in part to try to figure out how you do this was it turns out, yeah, that that product does exist. And it’s, basically done by these insurance companies. The major insurance companies have been around for 100 years plus, and it involves it in options play, essentially.
01:44:52:19 – 01:45:18:14
Buck Joffrey
And so what they allow you to do is say, okay, you’re going to take, you will every year you have this amount in your account. If the market goes up by, we’ll let you have the first 10% of the market. And if you make that 10% up to that 10%, that’s yours. If it goes more than that, you don’t get more than that.
01:45:18:16 – 01:45:49:00
Buck Joffrey
But then in return, what we’re going to do is if the market goes to, let’s say, zero or even 1%, you can’t go below that. So every year, essentially you can either gain or not or not gain, but you can’t lose, right? I thought that was fascinating. Now, what’s interesting is that in the ultra high net worth world, you add one more layer to that and that layer is leverage.
01:45:49:02 – 01:46:14:22
Buck Joffrey
So now you can imagine and people say, well, gosh, you know, market went up 20% two years ago. Now I only got 10%. Well, at least you didn’t lose, right. But now if you’ve had if you’ve had leveraged all those years that you’re gaining, you’re actually getting the same type of potential upside, not just 10%. You’re reaching into the 17 to 18, 20% if you if if you reach your cap.
01:46:14:22 – 01:46:18:01
Buck Joffrey
Why? Because you’re using leverage.
01:46:18:03 – 01:46:18:22
Rod Khleif
Right?
01:46:18:24 – 01:47:01:18
Buck Joffrey
Right. So this type of thing was not really available to again, my cohort, which is, you know, people who make a couple hundred thousand dollars a year, you know, because again, premium finance financing those premiums would be like, okay, we’re going to do $1 million a year. What we don’t want to do that. So there is this there’s this strategy that we’ve essentially my partners have created, which essentially allows people to do this, you know, at, you know, $25,000 a year for two years or $50,000 a year for two years.
01:47:01:21 – 01:47:28:26
Buck Joffrey
So what we do is essentially you create a base, right? You create a base with that, first two years. So you put in $25,000 for two years, and now you have a base of 50,000. Now you you add leverage to that every year after that. And the leverage actually comes from inside the policy. So you’re not actually borrowing money from a bank.
01:47:28:26 – 01:47:57:19
Buck Joffrey
You’re not putting any more money in. You’re actually funding your own policy from loans within the policy now. So what that does is it creates this pretty impressive type of feed forward thing where it if you go back and you model this out 50 years, you model it out through the Great Depression. It outperforms virtually every other situation in which you just put money into the market.
01:47:57:19 – 01:47:58:27
Buck Joffrey
Every year.
01:47:58:29 – 01:47:59:16
Rod Khleif
01:47:59:19 – 01:48:01:08
Buck Joffrey
It’s pretty incredible. But I have.
01:48:01:08 – 01:48:18:04
Rod Khleif
To. So. So let me ask you a question. Let me ask you a question. So so how do they how do they mitigate the I guess they must have like put options or something where they mitigate the potential loss, but they make it up, through their actuaries where they, they if they make the gain, it offsets any cost of the put ups.
01:48:18:04 – 01:48:20:29
Rod Khleif
Okay. I think I could see how they could do that. Interesting.
01:48:21:05 – 01:48:27:25
Buck Joffrey
So like and mutual nationwide these are like this isn’t like, big companies. Yeah. Right. Yeah. Okay.
01:48:27:25 – 01:48:48:00
Rod Khleif
Interesting. Well wow. Okay. Well, that’s, way above my pay grade, but, sounds fascinating. I, I do enjoy talking about it, but, so, so, are you still actively looking for some multifamily, or are you still looking for. Oh, yeah. For deals. Yeah. Okay.
01:48:48:00 – 01:49:17:14
Buck Joffrey
Yeah, yeah. In fact, Right now, you know, we’re even, like, we have we have something going on in Raleigh right now. Okay. You know, 40%, discount on cost basis, 2 or 3 years ago. Yeah. You were finding them because off market stuff, you know, it’s all off market. Right, right now. And and it’s not because these assets are performing badly, but, you know, you’re seeing I think probably this year, is going to sort of flush out the rest of the, the bridge deck.
01:49:17:16 – 01:49:34:12
Rod Khleif
You know, my SEC attorney, my CC attorney said he had six foreclosures in one day, apartment complexes. Yeah. This has been 3 or 4 weeks ago, you know, and I’m sure he’s got more since then, but, yeah. No, I mean, there’s some there’s some pain. There’s some pain. I’ve experienced some pain. You probably experienced some pain.
01:49:34:12 – 01:49:50:26
Rod Khleif
Yeah. You know, we we get through it, we get up and keep our head up and fight through it. But but again, with crisis comes opportunity. As you just mentioned, you got one at 40% off. It’s that’s a hell of a deal. You know, as long as the numbers pencil, it’s all about the cash flow. Honor. Well, listen listen, Buck, I appreciate you coming on.
01:49:50:26 – 01:50:03:13
Rod Khleif
And and, guys, the name of his podcast is the Wealth Formula podcast. I’m going to be on it again here in short order as well. And, so check it out and, it’s good to see you again, my friend.
01:50:03:16 – 01:50:05:00
Buck Joffrey
Yeah. Thanks for having me. Right.
01:50:05:02 – 01:50:05:22
Rod Khleif
Absolutely.
01:50:05:22 – 01:50:26:05
