S2E49 -Mohit Tater – Buying and selling businesses for 3X

Key Timecodes

• (00:58) – Background history
• (06:45) – How he classifies his business model
• (06:54) – Who can invest in his business?
• (07:05) – Where is his headquarters located?
• (10:23) – What is his portfolio strategic focus  
• (12:53) – How many online businesses does he hold?
• (13:29) – What is his profit goal when selling that business?
• (14:17) – How many employees have in his company?
• (15:13) –  How investors can be involved in that business model
• (18:18) – How the revenue generation works?
• (22:32) – Some examples of websites on his portfolio
• (24:18) – Deeper into the strategy and some examples: creating passive income fonts
• (30:05) – How long does he usually analyze companies before buying?
• (32:04) – Is he a solo owner or does he have any partners in that company?
• (32:17) – How do transactions and security work during negotiations?
• (37:40) – The worst business or investment advice he ever received
• (38:25) – The best business or investment advice he ever received
• (40:18) – Guest contacts

Transcription

[00:00:03.390] – Intro

Payback Time is a podcast about building businesses wealth and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. The overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s payback time.

[00:00:32.740] – Sean

Does the thought of buying and selling a business seem intimidating?

[00:00:36.210] – Sean

What if somebody did all the hard work for you?

[00:00:39.130] – Sean

My next guest is a private equity.

[00:00:41.220] – Sean

Firm that buys, builds, and sells online businesses.

[00:00:45.090] – Sean

In this episode, he talks about his journey, some of his failures, the type of companies he specifically focuses on, the average annual returns, and how investors can get started. Please welcome Mohit Tater. Mohit, welcome to the show.

[00:01:00.570] – Mohit

Hey, Sean. So great to be here. Thank you for having me.

[00:01:03.720] – Sean

Yeah, absolutely. So why don’t you kick us off and tell us about your background.

[00:01:08.860] – Mohit

Sure. So I’m moitar. I’m from India. I come from a small city called Yotpur. It’s also called the blue city or Pencil from the western part of India. Payment to fame would be the palace that we have within palace here. And also Nick Jonas got married here.

[00:01:24.860] – Sean

Interesting.

[00:01:26.510] – Mohit

I’m calling from close to New Delhi today in Burglar, and we have our office here. So. Yeah, I’m from India. I got started with my journey back in school, high school. When I read the book, Rich Toddad had a lot of people. I also got started there. I was like, okay, I read the book. I got motivated. I was like, I need to do my own thing. I’m going through my own thing, and there’ll be it. And then I graduated from school. I went to college because, of course, all Indians go to college. Right after school, went to one of the top most colleges in the country and did engineering for four years. But all this, I was set on doing my own thing. So I had started my small entrepreneurial journey in a small way already, like by fixing computers or burning CDs and all of that while in college. So that was the start of it. And last year of my college, 2011 we’re talking about, I read a book called For Our Workbook, as a lot of us have a gentleman called Tim Thurs, and that gave me the second tick that I needed to get the ball rolling.

[00:02:32.160] – Mohit

And right after college, I joined a job at a startup, which is now a unicorn. I wanted to do a job for about a year so that I know what it feels like to do a job. And also, my parents really didn’t want me to do my own thing right away. They’re like, get a safe job, get a job, got the job, did that for one year. Learned to not go, I would say, but learn to build websites on WordPress and learn to build websites, basically and blog in that one year during my free time in the evening. So I learned blogging. I learned how to make websites during all this time. And why I did that was because I thought online was the way to go forward. Because the book taught time freedom, location, freedom. And that’s what I wanted. I want to have a taste of it. So I thought, let’s do something online. So make money online is what we all think. We are looking for something online. And that’s how I got started. I got started, I did blogging, I did website, I build websites, but I learned a lot from it.

[00:03:27.190] – Mohit

But I could not make any money from it. I always set the the job after one year because that’s what I had decided, that I’ll leave it and then go do my own thing. It didn’t work out. And then I went to college again in Australia to earn a master’s degree and maybe do another business. I was dejected. But yeah, I went there, did one semester, and then realize it’s not for me. I left the course, came back to India, and then luckily, I found a website which was called Lipa.com, which was basically Australian company. It was a website marketplace rather, that deals in buying and selling of online businesses that were making revenue. So I was like, okay, if these are these businesses or online businesses that are making money already, why not buy them and see if I can grow them rather than starting them from scratch? Which I failed at. So I had about $2,000 saved up, and I borrowed some from my family, from my mom. And I bought my first website onlinebusiness for about $200 on Klipa.com. I was never $2,500. I was making about $400 a month at the moment.

[00:04:31.240] – Mohit

I bought it at a sixx multiple of its monthly earnings, which was really cheap back then, ten years ago. And luckily for me, it turned out well because there was a lot of scams going on. That time turned out well for me. I made about six grand from that business in the next six months. I grew that business using my skills I had learned, and then I sold that for about $12,000. So all in all, I made $18,000 and I couldn’t do $200. So that was a good chunk of money for me back then, because my day job, when I was in the job, only paid about $500 a month as a full time employee. So that’s how I got started from there. Then I just kept on buying bigger businesses, like from 500 to 50 00 70 00 80 00 I did get scammed a couple of times, but that didn’t stop me because I knew this thing works. It allowed me the time freedom and location freedom that I was looking for. So everything worked. And then I was visiting my friend, a good friend of mine in the US. In manhattan. I went to live with him, like, travel in the US.

[00:05:34.320] – Mohit

Across the US. With the proceeds of my first sale. Always had been a dream to visit the US. I stayed with him for a few weeks in his Manhattan apartment, and he got fascinated with what I did. Like, I was just sitting home or going to cafes and working out of my laptop. I was like, what do you do? And then I told him, I do this. I buy and upgrade online businesses. He got interested, and that’s how Black Book Investments, my company, started. We bought a business for him, a website for him, and about $11,000. And he did well. He got interested. He got his family involved, he got his friends involved. We did bigger sites then and since 2014, when we started investments. Today, 2028 years, we’re managing about eight to $10 million dollars worth of capital across digital assets. Multiple websites, multiple online businesses. That’s what we do. We have a full time team here in India and across the globe, remote plus in office, so it’s hybrid. And we help investors buy digital assets and online businesses, and we do all the heavy lifting, including the maintenance, running, and growth of the business to give good ROI to the investors.

[00:06:40.210] – Mohit

In short. Yeah.

[00:06:41.280] – Sean

Got it. I love your story here. There’s so much to unpack and then taking notes. So would you classify your business model as a private equity firm?

[00:06:48.940] – Mohit

Microproduct equity, I would call it. Getting their private equity.

[00:06:52.840] – Sean

Yeah. Got it. And do you have limitations with what type of investors can invest? Like, are you limited to credited or open to anybody?

[00:07:01.810] – Mohit

Everyone can invest in this.

[00:07:03.690] – Sean

Got it.

[00:07:04.600] – Mohit

Only, yeah.

[00:07:05.350] – Sean

And are you headquartered in New York or in India?

[00:07:09.580] – Mohit

So we have a team in India and we have a company in New York. So our company runs out of the US. I’m there like three, four months in a year. Mostly in the summer, though. In the year, sure.

[00:07:23.290] – Sean

All right. There’s a lot of questions I want to ask there. I’m just going to go back in time a little bit, and then we’ll work our way to the present. Of course. You mentioned that between your education in India and then going to start your masters in Australia, you started and you failed at a business. Can you share with us what was that business?

[00:07:41.940] – Mohit

Yeah. So basically when I was searching for online opportunities, blogging was the person that came up. You should blog. You can blog and make money, all of that. So I tried blogging. My first site was a review website. I was reviewing books and movies and all of that, and I could not get much traffic to it or any earnings from that. So I did that for about one year. I guess I was too short a time for you to see any earnings. But I kind of felt dejected and left it there. I didn’t continue with it. So that was like the field experiment that I did. But that did teach me a lot for lessons. Not lessons, but the skills, I’d say, because I learned how to build a website, I learned how to blog, how to write that.

[00:08:22.460] – Sean

Yeah, that’s excellent. Your journey is actually somewhat similar to mine. I came out of school with a fine arts degree, got in a film, and my two options well, I have multiple options. One is going to the movie industry, and I didn’t want to move to La. And just drudge away for two decades. So, fortunately, fine arts degree can get you a job at marketing firms and advertising firms. And those firms are everywhere. As you know, I worked one year for a firm, and I’m like, oh, I can create this business model on my own, and then started creating video website software for other businesses for four years, but very similar. So you learn how to build websites. In my case, I found I didn’t like the coding, nor was I good at it. Right. So it’s project, manage, and sell. But I like when people share their failures, they learn. You know, there’s people out there who are afraid to fail, which is it’s a bad way to look like you have to learn how to fail and fail fast. Right. You could have spent like, three, four years on that blog. That’s a huge opportunity.

[00:09:34.780] – Sean

Cost. It’s like, you learn what you like, what you don’t like, how to build this type of business. Okay, we’re going to close it up. Move on.

[00:09:40.720] – Mohit

Move on. Yeah, totally.

[00:09:41.890] – Sean

Yeah.

[00:09:42.310] – Mohit

Awesome.

[00:09:42.760] – Sean

Okay, so with your business model, I really like this decision, too, because there are certain entrepreneurs that they’re really good at the start up phase, but they’re not good at the scale phase.

[00:09:54.910] – Mohit

Yeah, right.

[00:09:56.020] – Sean

Like, you get those startup entrepreneurs, they’re good from going from, let’s say, zero to a million in Arr. And then there’s the people who are good from 1 million to 10 million. And then you get the people that write ten to 100. So you found out that you’re not great at the start up, which is fine. You’re good at, once something is set up, you can scale it, take it from there.

[00:10:19.780] – Mohit

Yeah, exactly. I figured that. And that was a good thing. I did.

[00:10:22.870] – Sean

Yes. So your private equity firm, let’s talk about what kind of businesses do you focus on? You said online businesses.

[00:10:32.040] – Mohit

Yeah, right, I did.

[00:10:33.600] – Sean

Okay. And let’s talk about some of those that you’ve invested in.

[00:10:37.320] – Mohit

Sure. So there are basically four or five different kind of online businesses you can buy or invest in. One is Ecommerce, which all of us know how they work, e commerce sites, and that includes selling on Amazon. That’s one kind. The other kind would be, secondly, SAS businesses, software as a service. So you can build software and run that as an online business. Third is content websites, which basically present information on a certain topic and people come read the content and the site makes money either by advertising or either by affiliate commissions. And we try to rank well in Google and come in organic results and rank on the top of Google. This would be the best idea so that people can find you, come read your content, and you can make money from that. And then these three would be the major type of online businesses. Fourth is a service business, which is an agency or something like a service, which we don’t do much. So we primarily focus on businesses, content websites, making money via display ads, advertising, and affiliate revenue. So let’s say we have a website about PC computers, and it reviews products like motherboards or graphics cards or whatever, like computers, all of that stuff.

[00:11:47.580] – Mohit

If you are looking to buy a computer, you go Google search for it, and then some sites will pop up on page one. You go on one site, read the reviews for that particular product, and then maybe click a link on that page and go to Amazon and buy that stuff. So if you do that, that website is going to get some commission from Amazon because you were referred to Amazon by that site, and there might be some ads running on the site for which they are also making money from. And that’s the basic business model that we do. The idea is to grow these sites further in terms of audience, in terms of traffic, and get more revenue because of the higher traffic. So context is what we sold mainly focus on. I would say we will diversify into SAS next year software, but for now.

[00:12:30.300] – Sean

We’Re doing majorly content businesses, primarily contents. Yeah. So I’m hearing the three categories. You’ve got content, SAS, and ecommerce. If you were to put a percentage on each right now in your portfolio, what is the rough estimate?

[00:12:42.910] – Mohit

It’s pretty much all content.

[00:12:44.520] – Sean

It is almost 100% content.

[00:12:47.350] – Mohit

100% content, yeah.

[00:12:48.700] – Sean

Got you.

[00:12:49.300] – Mohit

Exactly. We specialize in that.

[00:12:52.680] – Sean

Got you. Okay. And how many different websites or businesses does your PE firm own?

[00:13:00.180] – Mohit

About 25 to 30, give or take. Because we’re constantly buying, selling? Constantly buying, selling, so that’s it.

[00:13:06.210] – Sean

Okay. And if you buy, how long do you plan on holding the business? Are we talking like six months, a year?

[00:13:10.900] – Mohit

Three years, two years, ideally, because that gives us enough time to grow it to a certain level and prepare it for sale. Got you.

[00:13:17.940] – Sean

Okay.

[00:13:19.990] – Mohit

Personally, I am a long term holding guy holding. So for my side, try to hold them for as long as I can, maternity, and get the cash flow coming in.

[00:13:29.510] – Sean

Got it. Okay, and then what kind of multiple are you trying to sell and are using EBITDA or revenue as your baseline?

[00:13:36.720] – Mohit

It used to be EBITDA before, but the market is kind of evolving and people are using revenue these days, so it’s a hot market. So people are actually paying on revenue, by the way. So we got involved with the market. Ideally, I tried to pay on EBITDA. It’s a three to four x multiple. Somewhere around, like in the median would be 3.5 x. I’d say 3.5 x would be the median. That’s what we are. But I try to find you that I can get for three x. I.

[00:14:00.670] – Sean

Beta three x. Yeah, that’s good. So nice round numbers here. Let’s say EBITDA, $10,000 a year. That’s really low. We could really dial that up to $100,000. You’re going to try to sell it for 300,000 or more?

[00:14:16.050] – Mohit

Exactly. You got it.

[00:14:17.810] – Sean

That’s excellent. And how many employees in this company?

[00:14:22.630] – Mohit

20 employees. Full time.

[00:14:24.150] – Sean

20 employees.

[00:14:24.960] – Mohit

Okay.

[00:14:25.240] – Sean

And since it’s content is your focus, I’m assuming a lot of these people are good at copywriting or Aggregating.

[00:14:32.890] – Mohit

Actually, on the contrary. Not because we hire expert writers to do the real writing, because we have sites in multiple niches, different niches. So one or two or three people cannot be covering all those topics because they’re not experts at everything. So we are absolutely experts. And we have content managers, editors in our team. We have SEO, search engine optimization, who optimize the SEO of the site so that it appears higher. Further up in the Google rankings, we have technical people, website developers. So, yeah, actual writing is done by writers where experts and we pay good money to these writers to write expert content for us because that’s what we will reverse these days.

[00:15:11.590] – Sean

Got you. Okay. And then let’s start diving into how our listeners can get involved. So we really enjoy investing in the stock market, well established businesses, you get to see the income statement, capital statement, balance sheet. You’re in the space PE, which is similar to venture capital, little riskier businesses. But can you share with us what kind of returns have you generated for your investors over the last few years?

[00:15:39.420] – Mohit

Of course. Yeah. So I’d say we are closer to PE than to VC. Historically, over the past seven to eight years that we’ve been doing it for investors, we have been able to return 30% analyze to our investors. Historically, in the recent times, the multiples have gotten higher. So sometimes we buy forex, but very rarely, and expenses have gone up, by the way, and there’s more competition. But still we are able to achieve 25% in the recent times. Also, we are able to achieve 25% annualized for our investors. After all the fee, everything after our fee and everything. Sure.

[00:16:13.090] – Sean

That’s the annualized returns, which is pretty good. What about when you sell a business? Is there some kind of payday for your investors at that point?

[00:16:20.440] – Mohit

Yes, of course. So we work on different models, which maybe we can go into later if you want to. But yeah, the business is owned by the investor we don’t own the business. It’s solely owned by the investor. Our aim is to grow the business and make them a capital gain. And we participate in the capital gain too, because that’s what we are working towards, because the fees, the retailer that we charge barely covers our expenses and our management and everything. It’s not too much. So our aim is aligned with growing the site so that’s aligned with the investor. And when the big payday comes around, we take part in that too. And that’s what we’re working for. So, yeah, it’s a big payday for both of us. Right?

[00:16:59.370] – Sean

Because I’m looking at, let’s say you really get a solid business that catches the right markets, get some solid momentum, and starts generating 300 to 400 a year in revenue. Or that EBITDA marker and you take the three X against that. Well, now you’re selling a business for over a million dollars.

[00:17:20.660] – Mohit

Exactly. So it is for sure.

[00:17:24.340] – Sean

Okay. Do you have, like, if investors want to get involved, like a lockout period, like, let’s say a year, two years, three years.

[00:17:35.060] – Mohit

So there’s no locking. If you don’t like my services, you can quit after one month. That’s fine. I don’t believe in all of that. And the thing is, we’re so confident in what we do in our world that people stick around. And the ideal time you suggest is to hold it for two years so that we can do our thing in that two years. Because it’s not like paid marketing where you just pay money to Google to show ads and you get the result right away. It is slow form of marketing, search engine optimization, SEO. Got to put in the hard work, wait for some time for the results to show up. So we write good content, we do good SEO, and then ultimately we get rewarded for that. So that takes time. So two years is what we say at least. All that for two years to get a significant ROI on your money. Yeah.

[00:18:19.570] – Sean

Let’s dive into how you’re growing some of these businesses, because I really like this aspect and the entrepreneur is listening.

[00:18:25.350] – Mohit

We’ll appreciate those too.

[00:18:26.230] – Sean

So SEO is a big component. Are you doing any kind of paid ads?

[00:18:30.630] – Mohit

No, we don’t do any paid ads because there’s no other way for us there because we’re not selling. Our product is the content.

[00:18:36.560] – Sean

We got to push out the value.

[00:18:38.200] – Mohit

Okay? I got to push out the fund. I cannot pay for people to read my content. I can pay people if they were buying, if I were selling something at a margin. My product is my content. So. Yeah, we do SEO intensive SEO. We do a lot of good quality content. We do outreach campaigns to get mentions and links from other websites. We do that. And we do on page stuff. We optimize old content that hasn’t been touched in a while. We do technical SEO. We do an audit of the content, how much content is written on the site already, how much we can write further. Are there any redundant articles on the site? Maybe we can merge them, maybe we can do away with them. So all of that comes under SEO. But yeah, on the strategy part, we also strategize how we can grow the revenue in other ways, which is, let’s say if a site is making revenue via just display ads, we can push a new revenue stream into that, which is affiliate marketing, so that we can review products and link to Amazon and get a commission there, or vice versa.

[00:19:34.200] – Mohit

If it’s doing affiliate marketing, we can just confuse display ad. Also, sometimes we can move from one display network to other. Let’s say the site is running Google AdSense. Maybe it’s not the best one to run. Maybe we can move to Media, Wine or some other company that can give us a better rate for our ads, basically. So we optimize revenue also in the best way possible, and add multiple more revenue streams to that.

[00:19:57.780] – Sean

That’s great. I’ve seen that as a really easy not transition, but another bolt on revenue stream. Like, let’s say you have ads on your site and now you want to introduce affiliates. Marketing links is a really easy addition, and vice versa. Like you said, you start with affiliates, you can add the ads right there.

[00:20:17.210] – Mohit

Exactly.

[00:20:18.640] – Sean

So it sounds like you guys are really good at content and SEO, correct?

[00:20:23.860] – Mohit

That’s what we are. Yeah.

[00:20:25.390] – Sean

Do you ever do SEO audits of other sites? Just curious.

[00:20:30.560] – Mohit

I think we’re plenty of ours, but we do it when we are researching for our own site and we research competitors, then we do research and audit. Also, what they’re doing better than us, what they’re doing in a successful way that we can replicate, maybe to get there.

[00:20:45.060] – Sean

Sure. Got you. Okay, that’s great.

[00:20:48.130] – Sean

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[00:22:33.490] – Sean

Can you share with us a specific site, like one of the businesses you bought? You’re really proud of the results. It could be a past business you sold or something you’re working on right now.

[00:22:44.760] – Mohit

Yeah, sure. I actually have one business that we bought back in 14th July 7, 2014. One of the first businesses we bought. Bought it for five grand. That’s all. And I was making about $400 a month. Over the years, it has changed hands, but it has remained in my management, under my management, under our management eight years and going strong. Last month, it did about four grand. Okay, these are small numbers, maybe they don’t might not matter. But I’m attached to that business because this is what the first business is. Bankrolled by my father in law. He put his trust in me, and I didn’t know what I was doing, but he was like, okay, I’m pretty confident that he was going to make it. So over the years, that $5,000 invested or reinvested in 2014, that has paid multiple. Like, I don’t even know how much I’ve made from that. Eight years and 100 months so far. So I probably made about $253,000 from that one business, honestly, in this last eight years.

[00:23:47.890] – Sean

Yeah, I was thinking about so if you bought it for five grand and you’re making four grand a month I know, I wasn’t doing that every month, but in a one year, we’re talking to ten X.

[00:23:59.360] – Mohit

There you go. One more business. I have one more business.

[00:24:04.170] – Sean

Yeah, we do.

[00:24:05.960] – Mohit

Bought in 2014 for my first investor, officially, who the friend I was talking about in New York, manhattan. Bought for eleven grand. It’s also changed. Still under my management that does a loan grand a month now, by the way, still under my management. And that God knows how much it made over the last again, 100 or so months. I’d say another half a million or so. You see?

[00:24:28.510] – Sean

Yeah, exactly. And again, you’re right, these aren’t huge numbers, but these are very much in line with Tim Ferriss’s book. You want to create a company that creates passive income for you.

[00:24:40.510] – Mohit

Exactly.

[00:24:41.740] – Sean

And for example, you living in India. You got a business that’s doing four grand that should be planning your king.

[00:24:52.460] – Mohit

This is a yearly salary for people. This is what I’m making a month from month.

[00:24:56.510] – Sean

Yes, exactly. So that’s brilliant. Now can you share with us the website names? These two website names?

[00:25:04.540] – Mohit

I’m afraid I would love to, but because it wouldn’t be unfair to the people that own it. Right now I don’t own it because it’s under my management, but not ownership that way. By chance. Share a couple of other we do, yeah. So one of the sites we own is for aims towards kids facts for kids. Cool facts for kids. So it’s called Coolkidfacts.com and we write about all kinds of facts about animals or geography, countries, places. And a lot of teachers use the site a lot of schools use the site to teach their students about all these facts. So cool kid facts. And we have another site in the golfing niche. Actually, I’ll tell you about the other one, which is in the Marines niche. We bought it from a US Marine. It’s called Marineapproved.com and we review gadgets kind of approved by Marines. So marineapproved.com. There’s a couple of sites I love it I’m on.

[00:26:06.750] – Sean

Yeah. One is cool. You’re right. Coolkidskids.com.

[00:26:11.010] – Mohit

And one is Marineapproved.com.

[00:26:12.670] – Sean

Yeah, marineapproved.com, which I’m really big into.

[00:26:19.240] – Mohit

There you go.

[00:26:20.460] – Sean

Firearms. Actually.

[00:26:22.030] – Mohit

There you go.

[00:26:23.170] – Sean

I have a marksmanship background from when I was a kid, so I love this kind of stuff. That’s not my other you mentioned golf as well.

[00:26:32.170] – Mohit

Yeah, I’m an avid golfer.

[00:26:34.330] – Sean

What do you got?

[00:26:35.460] – Mohit

I can send that to you later. But yeah, it’s skilledgolf.com, by the way. Yeah. Skillgall.com, skillgolf.com, skillsgolf.com. It’s a great site. We’ve learned it and it’s an authority in its niche right now.

[00:26:50.360] – Sean

Is it skilled? S-K-I-L-L-E-D. Yeah, got it. Okay. I was missing the ed. I’m actually on my way. These are really like you look at the fundamentals of the sites and the listeners out there. Of course you’re not going to see what I’m looking at. But definitely check out these URLs again. Just run them through again. You got coolkidfacts.com. Coolkidfax.com. Then Marine approved again. Marineapproved.com and then the skilledgolf.com. They’re pretty basic sites, pretty basic content sites. But the effort creates something like this from the ground. You can spit up. I assume they’re like WordPress or something like it.

[00:27:33.000] – Mohit

WordPress. Everything we do is WordPress.

[00:27:34.780] – Sean

WordPress. There you go. And then it’s all about the heavy lifting is the content and SEO.

[00:27:40.960] – Mohit

Exactly. That’s what it is. That’s what we do.

[00:27:44.960] – Sean

Very cool. Yeah. I’ll check out the skilled golf right away. The top header says helping you become a better golfer. That speaks to me. I’ll say this, I’m not going pro anytime soon.

[00:27:59.140] – Mohit

I will that was my puppy. Yeah, that was my puppy. Nice.

[00:28:05.590] – Sean

I will continue building Tykr. I have no plans to go pro to golfer anytime soon. Good for you. These are really fun sites. Really easy to get into. Tell me what because you’re probably being pitched or ideas are thrown your way. You’re probably looking at stuff what jumps. Out at you as a hot opportunity.

[00:28:29.360] – Mohit

Yeah, so I’m more of a buy and hold kind of guy, like I said. So I always look for sites that have a stable history of income and traffic that have been around for long, and by long I mean at least three to four years. Who has a decent amount of time in an online website space. They should not have been kind of in the bad books of Google or penalized by Google for some reason or the other. So they should be compliant to Google’s policies and terms so that they don’t get hit and bite out off the face of Google and then we lose all the money, all the revenue. They should be clean, the content should be talked, not should I even be written by experts. So these sites should be works of passion that I’m looking for. These sites should not be made by people who are just looking to make decides just to sell it. Basically. I’m not looking for a fixer offer if you want to call that. I’m looking for something that the owner builds it for themselves and for some reason they have to sell. That’s what I’m looking for.

[00:29:32.100] – Mohit

And works of passion also. The niche should not be too difficult to write about because I’m not an expert, as the owner would be. So I need to find writers to writers in that niche. So it should not be too difficult to find and there should be scope to grow in that niche. If someone has covered all the topics to be covered on a particular site, there is no nothing for me to do to grow that site further. So growth opportunities should be there that we weigh that in. There should not be too many drawbacks. You should have a stable history. All of that makes for the business, basically.

[00:30:06.190] – Sean

That’s good. And when you assess a company, you’re going to bring under your PE firm, you’re going to buy it. How long been analysis do you usually do? We talking like a two month, four month, six month effort.

[00:30:19.320] – Mohit

Sometimes the good deals to close like so quickly is like within a week. Other times they might take even a year to close. So we work with another company called Empire Flippers under their program, Empire Flippers Capital. This company is the biggest marketplace for brokered listings of these businesses, empire Flippers and they have a division called Empire Flippers Capital where they raise money from their investors. And I as an operator, we run and buy businesses using that money. It took me about, you know, for the first one we did, we raised about $1 million and we bought like it took a three months to buy two websites. In the second round, I bought five more websites. We did $1.5 million as a raise in that round and we bought some of the sites that we saw in the first round. So after one year. We bought the sites that we saw one year ago, and all throughout the conversation was kind of going. Every month, I check in with the new numbers of that month, and it didn’t sell for a whole year. And we came back, and then we finalized deal after one year.

[00:31:23.810] – Mohit

But usually I’d say about a month. I’d say three or four weeks. I’d say sure.

[00:31:29.400] – Sean

That’s a good analysis, especially when you’re looking at these are pretty basic business models, which is good. Warren Buffett teaches us you want to make sure you understand the business. These are not complex. So if it takes you a week, two weeks, four weeks to do a pretty deep dive analysis, that’s plenty.

[00:31:44.890] – Mohit

Yeah, because these are small scale businesses. These are not like your $10 million businesses.

[00:31:49.390] – Sean

No.

[00:31:49.810] – Mohit

These are like anywhere from $50,000 to, let’s say, $500,000. And we’ve gotten good at it, so we don’t take as much time, but we take as much as it’s required. Sometimes they will sell before we can take an action, so we got to be stripped also.

[00:32:03.930] – Sean

Sure. Are you the sole partner, or do you or is this other individual you mentioned out of Manhattan also a partner in the business?

[00:32:11.310] – Mohit

No, it’s just me. I struggle between us and here.

[00:32:14.880] – Sean

Got it. Okay, so you’re the sole owner. I’m going to ask a question that you probably don’t get asked too much, but I have been exposed to this industry hedge funds, Pde funds, and VC funds. They can run issue where your investors or limited partners, they’re sending you money, and if it’s not secured in a safe location, probably a reputable location, that firm, like your firm, can run into issues and be shut down. I’m curious. When investors make investments to you, where is that money kept so they don’t.

[00:32:54.550] – Mohit

Send the money to us. That’s the beauty of it.

[00:32:56.850] – Sean

Okay.

[00:32:57.940] – Mohit

We facilitate the transaction via escrow.com. The money goes from the investor directly to escrow and henceforth to the seller. So no money changes hands with us. The investor is the actual direct owner of the business. They have full control. They have the domain, they have the website files, everything. If something were to happen to me and my team all together simultaneously one day and we were to be by the face of the earth, nothing would have been lost. They can probably find someone at least to manage the site for them if they don’t know how to do it themselves. So everything is directly under their ownership. And we don’t take money from anyone. We just take our fee?

[00:33:36.900] – Sean

Yes, you take your fees. So, escrow.com, you said that’s where the funds are held, if you will.

[00:33:43.770] – Mohit

Escrow.

[00:33:44.890] – Sean

And if somebody wanted to reverse out of that, do they have to go through humans, or can they process that right on that platform?

[00:33:50.850] – Mohit

Click right if they don’t like it. If our investor doesn’t like it, they can click no, not accepting the merchandise. The money goes back to the buyer, investor.

[00:34:00.860] – Sean

That is how it should be done. Yes. Because I have heard of this multiple times, or small, like, for example, hedge funds. Just managing, you could say in the US. I’ll use small numbers, like, let’s say it’s 50 million to 100. And they’ll take the money and they’ll keep it in their own little spot. And then when the SEC or some regulatory organization starts asking questions, where is that money cap? They can get a slap on the wrist or even shut down.

[00:34:29.230] – Mohit

Exactly. Yeah, that’s true. And we were aware of that. So we just do it by the books.

[00:34:35.610] – Sean

You’re doing it right. It sounds like you’re leveraging a process and a platform that does it right. So you guys can place your focus on content and SEO, what we do.

[00:34:45.930] – Mohit

Exactly. And that’s how 99% of the websites are bought and sold. That’s why escrow. Sometimes the escrow party can be the broker itself, like Impact, Flippers, and but most of the time, escrow.com, that’s the biggest thing out there. And just on the website, they can do any kind of transactions, like collectibles or hard or cars. People trade it for all kinds of things.

[00:35:09.260] – Sean

Yeah, right.

[00:35:10.610] – Mohit

California based company, by the way. A really old company.

[00:35:14.040] – Sean

Okay. Yeah. Good to know you guys are doing that. Well, I am really excited about your next level up, which will be Sass, because content is that’s the Tim Ferriss model. Create that four hour work week. Right. But SAS, you’re going to get into some multiples that are not going to be three x. As you know. They could be ten X and they could be 100 x. Exactly.

[00:35:36.910] – Mohit

That’s a whole different ball game altogether on the cash flow thing. Now, I think we are fairly good there. So we continue with that. Growing that. But they want to explore new territories as well now.

[00:35:47.350] – Sean

Well, if you ever want to bounce ideas, I’m just a Zoom call away.

[00:35:52.310] – Mohit

I might take you up on that.

[00:35:54.860] – Sean

Please do. I love SAS. Our audience knows I love SAS. I’d love to learn what kind of businesses you’re looking at buying and getting involved with, but this is really good. What I want to do next is transition to the rapid fire round. That’s where we get to find out who Mohit really is.

[00:36:11.230] – Mohit

Sure.

[00:36:12.070] – Sean

Right. If you can try to answer each question in 15 seconds or less. Are you ready?

[00:36:18.370] – Mohit

Sure. Let’s do it.

[00:36:19.630] – Sean

All right, what is your favorite podcast?

[00:36:22.990] – Mohit

It has to be the Tropical MBA Podcast by Dana Andrews and Henshaw It’s just lifestyle podcast or probably of the idea that Tempers gave Tropical MBA.

[00:36:33.010] – Sean

Tropical MBA? Never heard of it, but this sounds awesome. I’m actually in Google right now.

[00:36:44.060] – Mohit

Yeah, you should definitely get hope.

[00:36:46.890] – Sean

Yes. Found it. Okay, cool. What is the recent book you read and would recommend?

[00:36:53.290] – Mohit

It’s called the money. It’s the most recent, I think. And definitely it’s a must reach for anyone who needs to know how money actually works and how things happen. The power of money. So the psychology of money. Morgan Hustle.

[00:37:09.490] – Sean

All right, what is your favorite movie?

[00:37:11.680] – Mohit

I love the Jurassic Park series, actually. So the original Jurassic Park back in the think. Yes.

[00:37:17.020] – Sean

93.

[00:37:18.860] – Mohit

93. There you go. Saw that in the theater first time. Loved it from the day. So I’m a big fan.

[00:37:23.820] – Sean

Yeah, I was going to say I’m thinking about your based on your age, you’re probably pretty young when that came out.

[00:37:30.640] – Mohit

Yeah, six, maybe five or six. I saw it when I was six, I think. 94, right.

[00:37:39.190] – Sean

Great film. All right, we have a few business questions here. First off, what is the worst business or investment advice you ever received?

[00:37:48.940] – Mohit

Worst investment. Okay. So that would be just to not cut your losses and keep doing has to recover the losses. And I’m a firm non delivery in that thing, and I’m always like, cut your losses and move on, man. I don’t want to get deeper into this. So that was the worst one I did receive.

[00:38:08.790] – Sean

Yeah, you see that with traders and then inexperienced hedge funds. They’re like, I’m down 10%, time to go all in, so I can get myself out of the hole. And then guess what happens? They just go further.

[00:38:22.760] – Mohit

Dig a deeper hole.

[00:38:23.760] – Sean

Yeah, exactly. All right, let’s put the equation. What is the best business or investment advice you’ve ever received?

[00:38:31.540] – Mohit

Stick to one thing until it works. Actually, it’s kind of contradicted to what I did initially, but then when I did get some success, I started experimenting with other things. I thought I’d made it, and I started a restaurant, I started a travel agency. Kind of guy that got distracted, but they all shut down where I sold them off, and I got back to what I did best. And now in the past three years doing the lockdown, I did really well. I focused on the business so intensely, along with my wife. Two years we were at home, and those two years are paying off now, like in Spain. So focus on that thing. If it’s working for you, just kind of keep going at it and just don’t look anywhere else until you’ve actually made it, and then you have enough money to maybe invest in other businesses or whatever.

[00:39:14.890] – Sean

I love that the proof is in the pudding with you because you learned different models through the years and you’re really focused on this content model. Like, the three sites with the URLs you provided are the perfect example of just straightforward, clean content.

[00:39:30.150] – Mohit

There you go. That’s great.

[00:39:32.290] – Sean

Last question. Here’s the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?

[00:39:39.710] – Mohit

I would just stick to the good advice that I got. And I would say to myself that just do this. One thing is going to work for you, or do whatever works for you and keep at it until you find success in it, because you’ll make it one day. It might be after some time, but you will make it. So, yeah, I think I might have saved two, three years from my career had I not diversified or digressed from the bot, but I don’t regret anything. Those references, I think there was a cost to those, but that is the cost of learning. So I think of it as cost of learning. I paid the money, I lost the money, but that was a tuition fee that I paid to learn less.

[00:40:15.340] – Sean

Yeah, that’s good perspective. Right, Mohead, let’s turn it over to where can audience reach you?

[00:40:24.370] – Mohit

Sure. So my website is Blackbookinvestments.com blackbookinvestments. You can reach me on email, which is Mohit at BBI dot XYZ. Just to make it short for everyone, BBI for Black Book Investments, dot XYZ. So Mohit and BBI XYZ. Or you can just hit me up on Twitter or Facebook Messenger or I’m fairly active there. And yeah, if you Google my name, you’ll find me somehow.

[00:40:50.070] – Sean

Cool. Well, Mohammed, this was really educational. I love your business model and I.

[00:40:56.060] – Mohit

Should keep in touch.

[00:40:57.100] – Sean

Let’s definitely touch base in the next three to six months and get you back on.

[00:41:00.760] – Mohit

For sure. For sure. Sounds good. And it was lovely chatting with you today and I hope your eyes of values, your audience, I hope that yeah, 100%.

[00:41:09.430] – Sean

For sure. All right, we’ll see you, buddy.

[00:41:11.550] – Mohit

Thanks so much. Thank you.

[00:41:17.960] – Sean

Hey, I just want to say thanks for checking out this podcast. I know your time is valuable and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purposes only. So if you did hear any buy or sell recommendations, please don’t make those decisions based solely on what you hear. Alright, thanks a lot. See ya.