Acquisitions Anonymous - #1 for business buying, selling and operating - Buying a $3M Irrigation Business in California

Episode Date: September 22, 2026

Acquisition Lab, the leading community, platform, and fund backing serious acquisition entrepreneurs. The education and deal-search tools are free, and a real board of advisors will talk you out of a bad deal as fast as into a good one. There's no clock and no pressure. See what it's like: sit in on a free live roundtable at https://www.acquisitionlab.com/roundtables, and mention Acquisitions Anonymous!Mercury - Thanks to Mercury for partnering with me! Mercury gives founders powerful banking, cards, and financial tools built to help businesses operate smarter. Learn more and get started at http://mercury.com/Bedrock Quality of Earnings — Buying a business without verifying the financials can lead to expensive surprises. Bedrock Quality of Earnings combines experienced Big Four leadership, operator-backed expertise, and AI-powered analysis to help buyers validate earnings before closing. Learn more at https://girdley.com/bedrock.In this episode the hosts talk about a specialized Southern California irrigation company claiming sixfold growth after a 2025 recapitalization, with roughly $2.95M in revenue, $1.3M in SDE, and 40%+ margins—but a short operating history makes financing and valuation unusually difficult.Business Listing – https://www.bizbuysell.com/business-opportunity/high-growth-specialty-irrigation-company-5-5m-run-rate/2550503/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletterThis episode breaks down a specialized irrigation services company serving residential and commercial customers across four Southern California counties. The business reports roughly $2.95 million in trailing revenue and $1.3 million in SDE, while claiming its current annualized revenue run rate has climbed to approximately $5.5 million following a 2025 recapitalization and operational rebuild.But the turnaround creates a major diligence problem. Monthly invoice volume has reportedly increased more than sixfold, yet the business is seasonal, the improvements are extremely recent, and the seller is exiting before buyers can see whether the new performance holds through another full year. The discussion explores whether the reported 40%+ SDE margin is sustainable, how much of the growth could reflect peak summer demand, and whether the contractor-heavy workforce creates additional operational or compliance risk.The biggest question may be financing. The rapidly changing financial history could make conventional third-party debt difficult, potentially requiring seller financing, buyer equity, an earnout, or another risk-sharing structure. The episode also digs into the mysterious 2025 recapitalization, past customer-service problems, the importance of structuring an asset deal, and whether this is an unusually attractive turnaround—or simply one that's too early to trust.Key Highlights:- $2.95M revenue / $1.3M SDE: The listing implies an unusually high 40%+ SDE margin for a labor-heavy home-services contractor.- $5.5M claimed run rate: Monthly invoice volume has reportedly grown more than 6x since the 2025 recapitalization, raising questions about seasonality and whether the growth is sustainable.- Financing could be difficult: Heather argues the rapidly changing financial history makes traditional bank financing unlikely, potentially requiring seller debt and buyer equity.- Operational turnaround: The new operator reportedly installed modern field-service software, detailed job costing, and a customer-acquisition engine—but labor capacity is now the bottleneck.- Diligence gets complicated: A recent recapitalization, historical customer-service complaints, contractor-heavy staffing, and questions around clean asset ownership make deal structure especially important.Subscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.Do you enjoy our content? Rate our show!Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.For inquiries or suggestions, email us at [e-mail]

Hello, everyone. Welcome back to Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. I am one of your hosts, Bill Dallessandro. And on this episode, I am with Heather Anderson, and we found a very interesting specialized irrigation services company in West Hollywood, California, outside of L.A. And what's really interesting about is that it changed hands in 2025. And the new buyer claims to have six-x the business in the past 15 months or so, but now needs to sell it in order to care for their aging parents. So we talk a little bit about how you might structure a deal like that, what might be going on here. The business has 40% net margins as well. So really unique for a home services contractor. Please enjoy this episode of Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. just the plus inventory line. Buying a business might be the biggest financial decision of your life,

and most people try to make it alone. Cold emailing brokers, reading financials at midnight, and guessing what are the numbers actually hold up. Acquisition Lab exists so you don't have to. It's the leading community, platform, and fund backing serious, vetted acquisitions entrepreneurs with a standing board of advisors who've actually done this. People who would talk you out of a bad deal

as fast as into a good one. The education and the deal, search tools are free and open to everyone before anyone asks you for a dime. The easiest way to feel that is a roundtable. It's a free live conversation where you talk through what you're actually stuck on with other buyers and advisors who've been exactly there. Nothing recorded so it always stays in the room. Sit in on the next one for free at acquisition lab.com slash roundtables and tell them that acquisitions anonymous sent you. Hello, Heather. It's just us today. I love these. Hi, Bill. Yeah, what are we going to get up to without the other guys around?

Well, not only did you show up to record with me today, you also brought a cool deal, so I appreciate it. I did. I was just saying to Heather before we started recording that I was out to lunch with another entrepreneur today, and they want to sell their business, but they only have five years left on their lease. And I could hear Heather sitting on my shoulder going, an SBA buyer can't buy that unless you have 10 years left on the lease. So I told her to go out and get an option, and she's going to do that. So, Thank you, Heather. You're helping one entrepreneur at a time. You're helping make the world a better place. And she listens to the podcast, and I was like, this is like live podcast advice. So this is what Heather would tell you. That's right. Thank you.

That's awesome. Yes, it was great. Okay. So we have a cool deal today because it's home services, but not kind of the typical home services. So this is a high-growth specialty irrigation company in L.A., where you have to irrigate a lot of things, I think, because it does not rain out. So this business is, it says it has gross revenue of $2.95 million, but the title also says a $5.5 million run rate. So that would be pretty shocking acceleration to be going from basically $3 million of TTM to a $5.5 million run rate. Unless this is one of those classic like, hey, it's our busiest month of the year and we multiplied it by 12, like July or whatever the biggest month for irrigation is.

I'm already looking at who the business is listed by, and I can't tell for sure, but it looks like this might not be a broker because it doesn't say. It's just a person's name. There's no company. So this could be a for sale by owner. It could be, which I always like the best. The owner is always right, kind of the most candid or at least entertaining. Yes.

So it says it's been around since 2018. It's got almost $3 million of revenue and $1.3 million of SDE. So 45% net margins, SDE margins? Not too shabby. Too shabby. Not too shabby. So let's learn more about this. It is a leading specialty irrigation business in SoCal. A highly specialized irrigation services company services residential and commercial properties across four Southern California counties. The company provides comprehensive solutions across the full project lifecycle. Diagnostic assessment, system design, installation, drip and water efficiency conversion. I imagine that's big in California. smart controller programming and ongoing repair and maintenance, my favorite words. Following a 2025, oh man, this is interesting.

Following a 2025 recapitalization and operational rebuild, monthly invoice volume has grown more than sixfold. The company currently operates at an annualized revenue run rate materially in excess of the trailing 12-month results, which include the early transition period and understate its current. scale. The rebuild migrated operations onto a modern field service platform and established a measured proprietary customer acquisition system. I assume they just mean ads. Every estimate, job, invoice, and technician hour is recorded and auditable from the date of closing. I assume it

means closing of the recap. Marketing efficiency is materially above industry norms and field capacity, not demand, is the current constraint on revenue. The company has earned a strong your reputation for technical expertise and response time within a highly fragmented market dominated by generalist or landscape contractors and subscale independent contractors. This episode is brought to you by a company I genuinely use across every single one of my businesses. It's called Mercury. I've incubated a lot of businesses over the years. A media company, a podcast business, a staffing firm, a quality of earnings firm, and several others. And Mercury has become my go-to banking across all of them. I've personally been a

Mercury customer for more than three years now. So when they reached out about working together, it was honestly a no-brainer. I already used the product, and I recommend it, and I'm a big fan of what they've built. One of the things that originally won me over was just how hilariously easy it was to get set up. When you're starting a new business, you need to focus on actually building the business. Now paperwork, phone calls are figuring out some baking interface that feels like it was designed 20 years ago. Mercury is the complete opposite. Everything is incredibly intuitive, I can open the dashboard and immediately see what's happening across the business. Review expenses, move money, send ACHs or wires, manage cards and permissions, and just get a

really clear picture of where things stand. And when you're involved in multiple businesses at once, having that visibility without adding more complexity is incredibly valuable. Now that I've been using Mercury for a few years, traditional banks honestly feel like going back in time in a bad way. That's why Mercury is one of the few things I set up when building new businesses. Visit Mercury.com to learn more and apply online in minutes. Mercury is a fintech company, not an FDIC insured bank, banking services provided through Choice Financial Group and Column NA members FDIC. Bears to entry include licensing, insurance capacity, technical specialization, established brand, and review assets, and a proven acquisition engine that support

durable, competitive positioning. Demand is underpinned by regional climate, water use regulation, subsidized landscape conversion programs, and age. residential irrigation infrastructure. It says they have 26 employees, 10 of those are full-time, 16 of them are contractors, and summer seasons can get up to 25 contractors. The company is running home-based. Technicians provide their own vehicles, which keeps fleet capital and maintenance off the balance sheet. This seems like a California Department of Labor or Compliance nightmare, but okay. The principal transferable asset is the operating infrastructure. Operations are administered through a modern cloud-based field service

platform, maintaining complete, auditable estimate job invoice payment, timesheet records, blah, blah, the whole database transfers with the sale. The company operates in a specialized niche with a highly fragmented market, characterized by a whole bunch of generalists doing irrigation as ancillary service. No competing dedicated irrigation specialist operating at comparable scale has been identified within the four-county service area. Demand is supported by all the things I read earlier. and it says technical specialization, licensing and insurance capacity, and proprietary customer acquisition engine create barrier just to entry. Demand currently exceeds field capacity. The opportunity is scalable. Growth avenues include adding more people, increased marketing,

all the usual things. Ongoing water use regulation and the age of the regional installed base are expected to support long-term demand. Detailed growth modeling, channel economics, and a market analysis are available under confidentiality agreement. Sales and marketing support is available for three to six months and training if needed. The reason for selling is founder needs to take care of aging family members. And that's all we got. What do you think about this one, Heather? A lot here. A lot here. I think it's really interesting. I feel like I got a lot of consulting terms thrown into this listing. Like it almost feels like someone from McKinsey came along and recapitalized or bought into this business somehow in 25,

implemented a lot of improvements on systems and how they're measuring things and maybe even marketing. And now, unfortunately, has to sell before they can really let the business get to realize its full growth potential. Is that how you read it? Like somebody kind of came in here, did all the work, recapped this thing that was an otherwise disaster?

and now has to walk away from it before they can kind of enjoy it? Whether that's true or not, I think that's what they're trying, that's what's coming across in the listing to me. That's what it feels like. Interesting.

Wow. I mean, can you, like they are saying they have six-xed the business? That's what they said, right? Since they came in that bookings are six-fold, monthly invoice volume has grown more than six-fold.

It's got to be the summer, you know, what they're saying is they go up, they double the number of people in the summer. Well, it's September. So it's just the end of summer right now of 26. They bought it in 25. So it feels to me like something,

they had a really good summer in this business. And they maybe did some really great marketing. And they're trying to kind of pitch that that summer, those numbers are sustainable. Now, as a buyer, are you going to really believe that when you've only got one high season report? Maybe not.

But that's what it feels like to me. Like, they just, they implemented some things. They had a really good summer season. But for some reason, family member, whatever it may be, they need to sell now. So, Heather, what is the landscape irrigation season in California? As a Californian in LA, like, what are we dealing with here? Well, reality is you're going to put it in any time of year. But we do have, we do actually get rain.

So nobody thinks about it during those times, right? So you're not going to have people outside working. and you're not going to be thinking about the irrigation probably from December through March. Those are the rainy months. So you're not going to do it then. The rest of the year pretty much could be their busy season, though, because, you know, this place stops raining and that's it. But people really think about it more in the hotter months when, you know, the plants are struggling to stay alive

and they realize they need to redo this whole, you know, sprinkler system, maybe go to something more efficient like drip irrigation, you know, get their water bill down. We get notices from the water company in Southern California that compare you to your neighbors and your usage and whether you're efficient or wasting water or, you know, neighbors will even report people who have water running down the street. So during those times of the year when things are really dry is when I think people probably think about doing this the most, which would be the summer. Okay.

So what's interesting is here in North Carolina, like you probably just, like it gets hot in March, April, and then these guys are just like slammed until September, and that it probably falls off significantly. But you guys kind of have the more mild climate where there's the temperate, you know, it's actually longer. Yeah, it's longer. Maybe that's better.

Probably better. It's probably a little less seasonal than other places would be. But they make it clear that they double their staff in the summer. So it's got to be a pretty, pretty busy peak season during the summer. So do you read this as some, a recapitalization? So this business was somehow probably an operational disaster in some ways, right? Yeah. Because I kind of read backwards from all the things that they say that they did to fix it.

Like those were probably all the things that were broken, right? So they probably came in. They were probably not doing any scalable customer demand. generation, aka advertising, before this person got there. But they also probably won't tracking their costs because they're very, they've said several times in here that they track their costs

down to the technician hour. And so they probably came in, put in functionally like a irrigation ERP, like a field service job costing ERP and then crank the ads and booked a bunch of business. And now they've booked so much business that they can't fulfill it. And this person is distracted by caring for their aging family members and they need to offload it. The thing, though, it almost seems too good to be true.

I mean, doesn't it? A little bit? You said something there that made me think a little bit more about what might motivate someone like this to sell. This person who bought this business, I'm going to guess, really excels at and loved all those system implementations, that whole ERP improvement project that they did, but maybe doesn't love the hiring and recruiting and retention of technicians and people. And they did say that's the constraint. They knocked it out of the park on marketing. They knocked it out of the park on, you know, all these great systems for monitoring and measuring everything. But the constraint is people and, you know, having enough people to keep up with it. And maybe that's what this person is not interested in that part of the business,

is building a bigger team. So you think they just, they came in, did this whole acquisition gutted it, and then kind of they ended up with, oh, crap, I don't actually like running this day to day and also my parents are sick. So I'm out. Sounds like it could be.

Yep. Could be. So how in the world do you value something like that? So they're, assuming these TTS are correct, it's got 40% net margins on 3 million of sales and 1.3 of SDE. But they're saying that it's on a 5.5 million run rate.

That would be almost double. But then they're also saying that invoiced sales are up sixfold. I almost think you have to throw that out because that's got to be seasonal. Maybe if you have a 6x summer and a flat winner, you end up on average 2 to 3X up for the year. But either way, there's been an inflection point in this business,

and it's a seasonal business, and the inflection is behind you, so you aren't going to really know if it happens again until next year. So, like, how do you step into this business? Yeah, I think that's the challenge here, is this somebody that's kind of telling you, I'm sort of selling this prematurely

because of my aging parents, or, you know, maybe I think it's because maybe they don't love the people's side of the business and all the hiring they have to do. This might be an interesting deal for another recap, so to speak, where someone comes along and says, look, I'm great at the part you're not good at, but you know, you roll some equity and I'll buy in a, you know, majority or even, you know,

a 49% stake. And you stay involved doing all the great things with systems and monitoring those, and I'll take care of the people growth side of the business. Maybe something like that. But even then, what's your price? I don't know. Because the numbers are very much, in motion the sales and the margins. You can't really predict where this is going to kind of normalize just based on the description. I mean, to me, obviously, to all of your points, this just is begging for some sort of risk sharing burnout thing. What's most surprising to me is that the seller is not also begging for that. Because imagine, right? I mean, imagine if you came in and you did all this work and it's really working and you've decided that,

you know, you're on the cusp of realizing it, but you just can't operate it for one more year to realize all this equity value, I would be screaming for upside participation, right? Yeah. If you're being forced to walk from this to take care of your aging parents. So to me, I think, I would really think both parties want exactly the same thing here. And you've got to structure some sort of, I mean, Especially if you're going to put any debt on it, you basically can't pay for anything but the TTM. Right?

And I don't think you're going to get any debt on this. If the numbers probably weren't great when this person bought it in 25, they've been very much in flux. And you can look at indicators that show you these very recent improvements in trend. But that's just too short time horizon for a lender to lend a 10-year or even a five-year loan. on something that just isn't seasoned, you know. So I don't think you're going to get third-party debt on this. You're going to have to have equity and seller debt. Even if kind of the pre-re-cap, because there's a recap too, right?

So these are, there's a new cap table, new cap structure, new owners, presumably, come in in 2025. Even if, you know, like, that's kind of everything before that has rolled off and is prior ownership, the bank's still going to look at it. There's kind of no way to explain it away? Yeah, probably not. It's just not stable enough yet. It's, you know, a year to two years down the line, yes, a bank might be able to see that,

okay, now we've sort of stabilized, we can see what's happening. But this is all very recent change. And it's too short a time horizon for a bank to feel like the history gives us something that we can predict the future from. And that's what banks try to do. They try to look at a history and feel like they can predict what the next. three or four years are going to look like. And I don't think you can do that from where this business is currently. So there's going to be no debt available to you, which again,

just screams for risk sharing, right? I mean, it's even harder, though, I mean, you're going to have to come out with a fair bit of equity, I mean, to buy this thing. Like, even on the TTM, you know, it's 1.3 of TTM, assuming that's accurate, you know, he's going to want three million bucks at close or four million bucks at close or something, right? But like, you just don't know how dramatic the turnaround was. Maybe, I mean, you, you as a buyer are thinking the same way the bank is, like, how sustainable is any of this? You know, I would really want to do a diligence on why was this recapitalization turnaround necessary? Like, how did we get here? You know, I'm sure there's a very interesting story about, you know, the owner neglecting the business or, you know,

somebody was stealing from the business or somebody. I bet there's some very fascinating history. And then who is this person? Is it the guy's son or uncle or something that recapped it? Or is it a total arm's length third party? I mean, I bet there is a soap opera of what went wrong. How did this guy find the deal? How did the deal get done? How did he structure it? I mean, who knows? Maybe he did it with some sort of weird balloon dead and he's got to get out by a certain day. Yeah, that could be. Because he doesn't say I acquired the business. You know, we try to read between the lines and pay attention to the words that are used in these teasers to give us a hint. It doesn't say I acquired the business.

He calls it a 2025 recapitalization and operational rebuild. So it was a turnaround, but it wasn't like a full acquisition. When I hear recap, I don't think of full acquisition. I feel like some of the original owners are still in the cap table when you say recapitalization. That's what it means to me. So today's video is actually sponsored by a company I started called Bedrock Quality of Earnings. And Bedrock is a service for business buyers. If you're going out to buy a business, one thing you don't want are surprises. There are tons of stories out there of people who buy businesses. They get into them in three months later, they realize the numbers that the seller told them, well, they weren't true.

And in a situation where people are often buying businesses and signing personal guarantees, meaning they're really on the hook to return that money to a bank or anybody they borrow it from, that could be a disaster. So Bedrock is a quality of earnings firm. There are people you hire that go in and look at the seller's books to make sure what you're being told is actually true. And there's lots of quality of earnings firms out there. What makes Bedrock different is it's the only one that has three things. Number one, a CEO, a guy who comes to us from a big four firm and has been doing quality of earnings reports,

Well, basically for a long time, his old career, basically. Bedrock is also backed by people you trust and know, including me. You know where to find me if you're unhappy with their service. And number three, Bedrock uses the latest technology, AI, and all that different kind of stuff, to make sure you get the best results at the best price. So if you're interested, book a call with the CEO Will. You can go to bedrock QOE.com or check out the link in the comments below or the one on the screen. Thanks.

Is this like some sort of maybe like the lender took over the business and now wants, out, like a stabilize it and wants out a year later, or are you not reading that? I'm not reading that. I mean, those are receiverships, legally speaking, where a lender is able to use the courts and put somebody in to run the business. They don't happen very often with companies of this size. By the time something like this defaults on debt, there's nothing to save in many cases, or the bank can't move fast enough to save it. So I don't think so. But I, I, I, I do think there was a distressed situation that this person who's doing the listing came along and was a big part of pulling it out of the ditch, whatever the ditch was, and doing a great job

with the operational rebuild, as they call it. But it's just really curious why they're selling now. They did do a good job. I mean, if they put in all this new technology. Yeah. Do you know, like in this market, like in California, I just, I think of California and I think all of the most intense environmental stuff that I've ever heard of, that's probably California is the place where it was going on. You know, has there been recent legislation or is it just that California is perpetually out of water? And so irrigation is a big deal. Well, I mean, we did get completely out of the drought. I will say like the last couple of seasons, the rain has been

huge. And also this year, we're expecting El Nino rain, which will also be huge. So we're not really in a drought, but we periodically go through them. And once they raise the water costs during a drought, they don't bring them back down. And they implement conservation efforts, they don't take them away, even when we're not in a drought. So yes, I think everyone's always feeling under pressure with their water usage here, period, regardless of what we're having a good rainy year or not. And so you do. You want drip in irrigation. You might want different kinds of plants that use, you know, that don't require as much water as grass, for example. So that's, you know, people are always kind of redoing their watering systems to be more efficient. So, but I think what he pointed out here is it is a very fragmented market. I don't know of a big company near me. They're saying they're the biggest in the area. I don't know of a big company that really markets themselves well. and comes along and says, we're going to design this system and give you what you want. I think there is a huge gap in service providers, and it sounds like this company found a way to

compete much more effectively. So I kind of love all of that. I was very interested. Several times they mentioned this licensing and insurance capacity as a moat or barrier to entry. When I think about irrigation, I do not think about licensing. I mean, is it, do you have a licensed plumber, maybe? That's, I don't know. I mean, honestly, I will tell you that I've had a lot of work done on my sprinklers, and I don't think any of them were plumbers.

But that could be the problem. Maybe for certain work you are supposed to be a plumber, or you can, maybe you can do something, some unique systems, if you do have the licensing, where the regular landscape companies that don't have that licensing can't compete and can't do those same systems. I don't know. That's a new one on me. I'm never going to be surprised if California requires a thing to be licensed. I mean, you've got to be licensed to do people's hair in California and many other places, in fact. But I just didn't think irrigation was one of those.

No, I didn't either. Insurance capacity, I mean, this doesn't strike me as like a thing that would have a ton of risk and be like bonded or or anything intense either but no i mean it would be workers comp intensive i would think um so maybe that's what they're talking about at this scale there they can their workers comp is maybe a little more reasonable to manage i don't know what they're saying there because i wouldn't think there's no bonding for basic homeowner um sprinkler projects unless it's not i mean it says several times a highly specialized irrigation services company. It does say residential and commercial in four cameras. And they do say that there's something unique that they do, that nobody else does.

Company provides comprehensive solutions across the full lifecycle, diagnostic assessment, which basically means what kind of irrigation do you need, system design, mapping it all out, installation, drip and water efficiency conversion, smart controller programming, and then ongoing repair and maintenance, which to me, I think this is the, if you can get your claws in some sort of recurring service contract. Yeah. That's just what everybody wants these days. And that would be interesting to know all this revenue growth, is it what percentage

is project versus repair and maintenance? Because this is a kind of business that's going to have both, probably bigger on the project side, but how much bigger? That would be interesting. Yeah. And you do need, I have irrigation system at my house. Like, you do need maintenance on it. like your stuff breaks maintenance,

but the other type of maintenance you need is it just needs to be reconfigured sometimes. You know, like it's not hitting the right areas or your plants have grown, you know, or you dig in the yard and you cut it and, you know, you got to redo it or you do some other yard work outside or some hardscape or whatever.

You got to move it around. So there is, you know, some ongoing reoccurring revenue if you can put a system in and get your sticker right next to their controller. And you have to adjust. it. Like, I know a lot of these smart systems now do kind of self-adjust, but like our installer asked if he could be added to our smart system so he could adjust it and control it remotely.

Now, I'm not paying him to do that, but, you know, I could see how you could probably design some sort of quasi-insurance, quasi, you know, we'll come out and tweak it if it just kind or whatever. We can see when things aren't going right and we'll come back and fix it. Yeah, that's kind of cool, using technology and the smart controller as a way for them to kind of retouch the customer. Yeah. Yeah. So, I mean, that being said, I would bet the lion's share of all this is project revenue because they keep talking about customer acquisition and scaling that fast.

I mean, you're just not going to scale, you know, kind of this recurring revenue that quick. I mean, unless, you know, all of the new stuff you sold has it attached. But still, like, these are probably big five and six figure products. projects at large California homes. And that's the other thing, too, like, based on the way they describe it as more of like a specialty subcontractor, I bet a lot of times they are being brought in by general contractors doing like, you know, a million dollars of hardscape in someone's backyard or something. And they build walls and hardscape, but they don't want to do the irrigation, and they bring these guys in for a $25,000 irrigation project or something, which is, I would

think, the best version of this business. Absolutely. Yeah. So they're kind of high touch, high end. They're using the smart controllers. They're doing everything right. And they're marketing well. I mean, the margin is so high. I'm a little confused by that, too. You've got a lot of labor here. So 40% margin doesn't feel sustainable to me. I'd want to really dig in and figure out what I think the margins are going to be long term when this sort of stabilizes because it's a lot of labor. and you still have marketing costs. All this growth came from marketing. Yeah, it does seem like, I mean, that's a super normal margin in a relative commodity industry, right? You're just marking up labor. Now, that being said, like, I think maybe you could get it on some of these more

advanced jobs because it's the actual cost of this, it's not super skilled labor. I mean, you need like a little trench, you need a trencher, and then you just lay down tube. It's very, very straightforward. It's not that technical. And hey, but if it's got to be right and it seems sophisticated and there's some site planning and CAD drawing attached to it, you know, maybe you can mark it up significantly. You're not going to get those margins in kind of your everyday irrigation services market, but maybe in the corner of the market they're in, maybe it's super luxury, maybe it's these couple counties. Maybe you do get it. I mean, if so, I'm starting to like it even more.

I think there's a really good business here. Sam, I do like it, which is weird, but you won't blow me any money to buy it, is what you're telling me. No. I like the business, but the loan is declined. The loan is declined. So, oh my gosh, I believe, I just noticed this, there's a real address on the biz-by-sell listing. It's not just L.A. There's a real address.

It looks like to be in kind of West Hollywood. would. And if I Google this, it looks like an apartment. Yeah, because it said it's home-based. So this, oh, this is the poor guy's house, I think. Yes, that's interesting. So who knows? I don't know if they realized when they were putting this listing together, this is for sale by owner, that they realized that their home address was going to be here on a map. Yeah, that's kind of an interesting choice. I don't imagine they did this on purpose. No, I think they did not. I guess I should just Google this guy.

I probably could eventually find him. Joel Soper. Yeah, here he is on LinkedIn. That's where I was going. I love it. So, you know what? I like the business even more. It says, Joel Coper, his title is

biz owner. It's amazing. And, you know, the company, it looks like they do erration of some kind. But this business that he is listed as is in Virginia, so I don't understand, you know, what the story is here. I don't know if this is the same business, but it's premier landscaping, grounds maintenance, and irrigation services in central Virginia.

It's got to be somehow related. I mean, I don't think I just got it. Oh, maybe this is, okay, maybe that's his main business. And he's somehow bought into this one to turn it around, has done it and wants to wash his hands of it and go back to Virginia. That is very possible, in which case that would be great. Yeah, then it's an even better deal. Yeah, then it's even better deal.

Like this is, you know, what you want is somebody who is going through a personal reason to sell the business, not the business is falling apart or the business has reached a plateau or whatever. You want a good business that somebody is being forced to transact as a buy. Yeah. Right? or I should say is transacting for non-business reasons? Yeah.

Right. Or personal reasons. Yeah. I mean, this seems like there's a really good business here. They've got a lot of proof points where they've implemented things that have worked. Seems like when you get into the numbers, at least post recapitalization, you're going to have really good data to look at. So you're going to have a little more conviction about at least the recent data that you're looking at. you just got to figure out how to structure your offer and your financing, which is the tricky part of this one, but might be worth it in this case.

Yeah, interesting. Oh, man, if I have found their Yelp review where there are some consumers were getting not called back or not had warranties honored, but then the business is responding to it saying we've gone through a change of ownership to new owner and we're trying to get back ahead of it. So very interesting. So you're going to have to deal with like the kind of the fallout of all the bad reviews. Whatever happened. Yeah, something happened where the business was doing a terrible job of customer service at least. You know, maybe it's possible the new person came in and their thing is like how to expunge these. And they've managed to kind of hide the reviews and they can win business again. And that's why they've, you know, they've been able to scale it back up.

Yeah. Could be just the reviews that they clean. up. I'm very interested in this business. I am not going to buy it because I live in North Carolina. But Heather, this is in your backyard. You could be in irrigation purposes mogul. I'm not going to buy it because I don't want to deal with the labor constraint part of it. I guess that was me speaking personally when I talked about that part. I do feel like that's a challenge. I like everything else I hear if I could figure out a structure and a way to finance it. I'd be all in except for I'd really have to get comfortable with

how am I going to find people and keep the people side, you know, keeping up with the sales side. Who's going to manage those people? You know, I'd have to feel really confident in my ability to find the right team. But this is your kind of classic home services. You know, you've got to match your labor with your demand. Right. So this is not a unique problem for this business.

It's just a problem or not a problem. It's a challenge. It's part of running a business like this business. Sure. I like it. I mean, obviously, the whole bogey is in figuring out what went on in the transition, the recap, making sure you have a clean, I mean, there's liability too that you want to make sure. Like, I definitely want an asset deal here.

Asset. Yeah. Definitely want an asset deal because then you don't have to diligence the clean transfer. I guess you still have to diligence the clean transfer of the assets to make sure that seller is titled to sell them to you. you know, there's, you're so close to a recap that you want to be very, very careful that you seller can sell you the assets and that you're getting clean title. Yeah. Another reason you're probably not getting debt on it.

Yeah. Just too hard pile for the lender. Yeah. Yeah. I wouldn't even, don't waste your time with lenders. Whoever's going to go after this one, this is not a bank lender deal. You've got to figure out how to pull the dollars together from, equity and the seller.

If you can do that, I think there's a really good business. I think so too. Very cool. All right. Good job, Joel. Good job. Good job. The person who turned this around, I assume it's tough. Yep. Yep. I think it's true. All right. If you guys like this one, we have 500 more episodes just like it.

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