The Gearbox Podcast

00:00 Jimmy Purdy My name is Jimmy Purdy, shop owner, master tech, transmission builder, and the host of the Gearbox Podcast. Here I talk with new and seasoned shop owners, as well as industry professionals about day-to-day operations within their own shops, and all the failures and successes that come along the way. From what grinds your gears to having to shift gears in the automotive industry, this is the Gearbox Podcast.

00:38 Jed McClure So welcome to the Gearbox. Thanks for coming in. Yeah, no worries, man.

00:43 Jimmy Purdy This is going to be fun. Yeah.

00:45 Jed McClure So Jed, what do we call you? Yeah, I mean, Jed is good. Jed McClure is the full name. And you know, we've known each other for a while, right? You and I both used to work doing wine tours. That's how I met you, right? Yeah, that's right. Yeah. And that's a solid, I mean, that would have been like, I don't know, 2013, 2014, 2012. So about a decade.

01:10 Jimmy Purdy What a job that is.

01:11 Jed McClure Yeah, I mean, it's a pretty cool job, pretty easy job. Get some crazy stories, sort of like bartending or something like that.

01:19 Jimmy Purdy You watch mobile bartending or something. Yeah, exactly. You're just always waiting for the wedding parties, you know?

01:25 Jed McClure Right, exactly. The bachelorettes. The bachelorette parties. The bachelorettes with the heavy eye makeup.

01:31 Jimmy Purdy That's when you know you're in trouble. Driving a big party bus around with a stripper pole in the middle of it. Exactly.

01:37 Jed McClure Fourteen chicks that are hell bent on getting drunk.

01:41 Jimmy Purdy It was a good time. Yeah, it was. The pay wasn't bad either, but it was a good part-time gig. Yeah, yeah, yeah.

01:49 Jed McClure You got to make some extra cash, you know? Yeah, I always tell people it's the best part-time gig in this area, in the Paso Robles area. If anybody out there is looking for a part-time job, driving wine tours is just a fantastic part-time weekend side hustle around here. Good money and not particularly difficult, as long as you don't mind sort of babysitting drunks in the afternoon.

02:11 Jimmy Purdy That's part of the deal. Well, they're adults, you know? You don't have to, I mean, I don't know. I never really babysit anybody. It was kind of like, you need to be on the bus. You can either get on or you don't have to. I don't know.

02:21 Jed McClure That was your approach. Yeah. I'm not babysitting anybody.

02:25 Jimmy Purdy I'm not babysitting. Like, if you want a drink, that's fine, but hold your own, you know? I'm not, I'm just the driver, man. I mean, it depends who it was too, you know? If you got a little extra cash out of it, but. Yeah. I mean, it was an interesting gig anyway. I mean, it was nice when I was doing all the repairs on the limos and buses too, you know? So I could be like writing down stuff that it needs as I'm driving around and then, and then call them the next week. Like, hey, so I noticed this, this and that.

02:49 Jed McClure You should bring it out. Yeah, that's right. You had kind of two things going on there. You were working on the fleet and driving the vehicles as well. Yeah.

02:58 Jimmy Purdy Yeah. Yeah. If you, I noticed if you drive with two feet, you got a lot of brake jobs out of the deal too. Nice.

03:05 Jed McClure There you go. I would never do that.

03:07 Jimmy Purdy Wear those brakes out. Well, that's, that's kind of one of your big, so we'll get into the real estate here in a second, but one of the big things now you're doing is, is your wine tours, right?

03:17 Jed McClure Yeah. Yeah. So I've got three businesses. I've got a, I'm an independent real estate broker. I've been doing real estate around here since 2012. So a little more than a decade. And then I also own a wine tours company and that's the newest and busiest of my businesses. That's the one that takes the most of my time. And then I also own a self storage facility, a mission mini storage up in San Miguel. And that one does not take much by the way of, of, of time and effort. But yeah, those are the three. And that's, it's a weird thing because generally it's better for people to concentrate than it is to spread themselves thin. You know, generally they say, you know, you want to concentrate, but for me, this has worked out better because I don't get bored if I'm changing tasks a lot. I like that. Like it makes me feel good. And then I also like having multiple revenue streams because it's like if one thing falters

04:07 Jimmy Purdy a little bit, you know, if there's a hitch in something. Yeah. It's always nice to pick up the slack somewhere else. Yeah. In a sense. Working. So, yeah. I mean, now, now going from working on or working in like a limo chauffeur style business, and now you're running it on your own. How does that change for you? I mean, everybody, everybody transitions from like, you know, like in this case, being a technician, being a shop owner, you've kind of gone from a driver to being like the owner of the company. Obviously now you got to worry about maintenance and vehicles. I mean, how what's been like a big thing, biggest thing for you to kind of wrap your head around as far as now you own the fleet, you know, like, so now.

04:49 Jed McClure Yeah. Yeah. Well, OK. I think one of the first things you realize is that the volume of small tasks that take up your time is substantial. Yeah. It's like there's a number of substantive things that you have to get done each week, but it's this huge list of little things that aren't big. You know, I need new diesel exhaust fluid or something like that. Just a little thing like that. The number of small tasks like that that pile up is huge. And so it's easy to feel overwhelmed with the volume of the size of your to do list because there's so many little things that aren't necessarily critically important, but you can't just let it all go. Right. You know, so I would say that's a big thing. And then the other thing is you can put your personal touch. You can really lean into making customers really happy. You know, like when you first start a business, you want to just absolutely knock it out of the park, you know, for your first, I don't know, 100 customers, 200 customers, whatever it is, just make sure people are super happy.

05:47 Jimmy Purdy Yeah. People pleasing like you couldn't believe.

05:50 Jed McClure Yeah. Throw in little extras, you know, spend a little extra time on the phone, you know, write down their names so you can remember them. You know what I mean? Little things like that. And just make sure you make those people feel really good about the fact that they brought their car to you or that they booked a wine tour with you, whatever it is. Absolutely. Yeah. That's a big part of success early on. And that really helped me get, you know, the Yelp reviews, the Google business profile reviews. And then once you have an online presence these days and you've got a lot of good reviews, depending on obviously the industry, but I'm sure that's true with automotive service as well. And especially once you start getting some word of mouth, then you get a little traction, then you've got a little bit of momentum, you know? And so I would say those two things. It's like, I really like working for myself because I'm in control. I like, you know, the idea that, okay, it's going to be my vision. I'm going to solve the problems the way I want to solve the problems, get to put my skills to work, get to outsource whatever I decide to outsource. There's a lot of freedom in that. And I like that. But then I would say, yeah, feeling a little overwhelmed with the volume of tasks that have to be done. Absolutely. Yeah. That's a big thing as a new business owner.

07:04 Jimmy Purdy As you're walking around, it's just like constantly, constantly. Yeah. As soon as you're done, you're right back to square one again to start all over again. Yeah.

07:12 Jed McClure You better get stuff done and you better keep getting stuff done.

07:16 Jimmy Purdy Yeah.

07:17 Jed McClure Well, when you're maintaining and so your fleet, you got how many? So I'm two and about to add a third. So I've got, and you know, vehicle maintenance hasn't been a big thing for me yet. At some point in the future it will be, but I've got a 2022 Mercedes 2500 Sprinter and I've got a 2022 Ford 350 Transit, the high roof sprinter style sprinter body type van. So because those are brand new, my maintenance costs have been essentially zero so far. And then a couple of years in the future that, you know, that'll change. But I am buying a older Mercedes GL 450 next in just a couple of weeks. And of course that thing, it's a little bit of a roll of the dice because who knows? You know what I mean? Go out. It's gonna be like 3,200 bucks or something like that. Who knows? Yeah. Yeah. Pick a Mercedes. Right. But you know, the nice thing about an older Mercedes is you get a Mercedes, you know, obviously they're luxury vehicles. The interiors feel fantastic. They ride really well. And then once Mercedes passenger vehicles get older, they really drop off in price. So it doesn't cost you much. You know, I'm just going to pay cash for it. And if I end up having unexpected repairs, the reality is I'm getting into it so cheap, it's not going to hurt me. So to have two vans and then add an SUV is really starting to flesh out my fleet. So for the wine tours business, that's nice. It's going to be a really good place to be in at three vehicles and then probably try and add a fourth like early next year. And then who knows about a fifth. But I'm definitely intent on growing. And so yeah, there's no doubt I want to keep the whole thing rolling. I enjoy the scaling thing that, you know, because I have employees now and you got to figure out payroll. You remember when you first did payroll? Yeah. Yeah. Like, you know how it works and it's like withholding and SDI. What is all this stuff? And ultimately you just outsource it, right? You pay. You hire.

09:08 Jimmy Purdy Yeah. You just pay someone to do their job. Yeah. Yeah, that is a job. So you just you just say, hey, can you just can I just pay you for your services, please? Yeah, absolutely.

09:19 Jed McClure That's what I learned. Yeah, totally. It's absolutely not. It's it's too technical to do yourself and it's too costly to mess it up.

09:26 Jimmy Purdy Well, your time your time is worth money, you know, so you can't you got to learn, put your time where where it counts, you know, like whatever makes the most money is where you got to put your time, you know?

09:36 Jed McClure Yeah. And doing the math. And I think that's another important thing for a business owner is to do really realistic math and say, how much money am I really making per hour? Like when it comes down to it, after everything that I'm doing, what is the dollar amount that I'm actually netting to my pocket per hour? And then you go, if that's what my time is worth, then any task that I can pay somebody else to do that costs less than that dollar amount. Absolutely. I need to pay somebody else to do. And so I think that's another important thing is like metricizing, like sort of a maybe clumsy term, but running numbers on your own business internally in terms of the different processes, you know, which of your services or products has the highest margin, you know, just really knowing your own internal numbers helps you think more clearly about how you're deploying your own time and about what makes sense to add on, you know, like we all get tempted with vanity purchases, right? Like I'd love to have like a brand new like Yukon Denali, right? Like, yeah, that'd be nice one to have. Yeah. That's such a beautiful vehicle, you know, or a Cadillac Escalade. But when you do the ROI, the ROI on a Yukon Denali as a wine touring vehicle is way lower than on a Ford Transit 350.

10:48 Jimmy Purdy Yeah. It's like body, heads per seat. Yeah, exactly. And you're paying a driver. And so how many people can you get moved with one person on payroll? Right? Absolutely. You get, you get three bodies in a Denali, you get 15 in a Transit, but the payroll stays the same.

11:06 Jed McClure So that only makes sense, right? And here's the thing. Like I think out the door, you know, before taxes and fees and all that, that Transit with a couple of, you know, a few upgrades, but nothing super fancy was only like $57,000, whereas a new Denali right now is like 76, you know, 81.

11:24 Jimmy Purdy It's sickening.

11:25 Jed McClure It's way too much. Yeah. And so, so like, you know, you're talking about a vehicle that holds less passengers, so you're charging less per hour, but you've got to pay substantially more to get that vehicle into the fleet. So, you know, I looked at Denali's, I test drove a couple, I was down at, you know, Borgon and looked at a few and called around on a few, and I've just kept running the numbers and going, geez, man, I need to add an SUV, but like the ROI on this thing absolutely stinks relative to either my Mercedes van or the Ford van and the ROI, you know, the, the, the banger in my fleet is the Ford in terms of actual return on investment. And then the Mercedes is sort of the flagship because, you know, you want to plaster Mercedes all over your website and your Yelp and make sure that that logo is everywhere because it adds this luxury feel to your, to your brand. Right. Um, and that's another thing about adding the Mercedes GL 450. It's like, it's a little older, but so what I've got two Mercedes, you know? Um, that's interesting. Yeah. There's so many different angles to think about, but, but swinging back to the metrics thing, it's like, it's because I know my internal numbers that I know like, oh, that Yukon Denali is absolutely dope. I'd love to drive around town in it. It's going to look great. It's also going to sell great, right? Like it's going to look good in photos on the website and people are going to want to, uh, you know, rent that vehicle, have that vehicle show up in front of their, their, their vacation rental. But I know that the return numbers on that thing are about as bad as any vehicle

12:49 Jimmy Purdy I could add, well, why am I trying to add an, the lowest performing vehicle I could add? Yeah. As far as resale and, and then obviously you got to look into like the maintenance costs of these things. Now, I mean, I said it before, the Sprintners are very expensive to prepare. I bet.

13:02 Jed McClure So it's like, but see, I haven't found out yet. Yeah. Like, I know, I know, you know, it's 200 and change just to do an oil change on one of those things, you know? Yeah, but that's not, I mean, and that's nothing, right? That's not even a real job. Yeah.

13:18 Jimmy Purdy But I mean, in the, in the grand scheme of things now, that's not even that much, you know, when you're talking about oil changes anymore, I mean, especially with diesels, but you know, you get into it and you, and you kind of figure that out as you go, I guess, I mean, the Ford's obviously the most cost effective to keep maintained and repaired, but. I don't know. That's interesting to like, think about if you were like starting a fleet, which vehicles would you use like for me? And it's like, man, they all break. I don't know.

13:43 Jed McClure Yeah.

13:44 Jed McClure Yeah. Well, I chose with the wine touring business, I chose Mercedes because I had driven one of those a lot when I was working for other people and I really liked the way it rode, I really enjoyed driving. I was like, I love the way this vehicle feels. It was like a 2014, 2015, I think. Um, and then I wanted to start with a van that had a little more capacity, some decent capacity, and that went held 11 vehicles or pardon me, 11 passengers. And so I would be able to start off with a vehicle that I could plaster all over, you know, website and I get to put Mercedes up front and make my brand look good and then also up to 11 people, which gets me basically up to about 130, 140 an hour at most that's about the top end of what that vehicle would go out for.

14:27 Jimmy Purdy Um, but you know, when you come, I want to circle back to that. So when you're talking about hourly rates, like that's interesting. Cause how do you find that hourly rate? Um, I'm basically just pricing right in line with what my competitors are doing. So competitor pricing, price matching, I guess you would say. Yeah, exactly.

14:46 Jed McClure Exactly. So when I started out, I would, you know, I already knew because I was already in the industry and I actually technically had, I had driven basically for two other companies, but technically a third that I briefly worked for. And so I knew what the pricing was. And so what I did is I basically just priced myself in line with that, but dropped my price by about five bucks an hour. So if I knew my competitors are going to put this out for 130, I'll just quote it at 125 and when you're new, you, you kind of, you can undercut your competition a little bit to get jobs. That's a wise thing. Cause you know, you've got one Yelp review and your competitor has 235. So obviously they, you know, you just not established.

15:22 Jimmy Purdy So you got, yeah, you don't have the. The qual like, you don't have the quality assurance to, to back behind your high price. And that's the same thing for me as well. Like as, as, as any service industry grows, like you can't, you can't ask for a lot if you don't have a lot to offer, right? You know, like you have to, you have to get behind that service. And I get a lot of people come and ask me my hourly rate and they want to change theirs because I'm higher. Like you can like, this is not how it works. And excuse me, it's interesting with that because I don't know how the metrics would work to get your hourly rate. Like obviously for a shop, you just take your lead tech pay the highest. He's getting paid. You run your overhead, you run your numbers and you can pinpoint the exact hourly rate that you need to sustain that so that, so that the, the, the, the office staff gets paid because they're not working on cars, right? Right. Like, so they got to get paid out of that hourly rate. And if you have two or three or four, well, you better have texts behind each of them to make up. But say you have one tech, one service advisor, one service writer. That tech's got to make enough to pay for that, that person in the office to sell the job, but it's also got to pay for the owner, right. And it's also got to pay for the overhead of the shop. And a lot of technicians are like, Oh, that's all on me. And it's like, well, it's a team effort. We're all in this together. And that's why you have to put that hourly rate to say, if you want to make $45 an hour and our rent is a dollar 20 square foot on the shop, you know, and we got power and we got, you know, licenses and insurance and all that. You got to calculate all that. And then you got to figure out this is what my hourly rate needs to be. Cause I'm in, I have a shop in this area. And so my going rate for shop floor space is a dollar 25 or dollar 35 or whatever it is a square foot, where you could be out in the middle of nowhere. And it's like, you're getting 80 cents on the, you know, an 80 cents a square foot shop or whatever your hourly rate can be lower. But a lot of people don't calculate that way. They're just like, Oh, you're, you're at 160. I'm going to be at 160 if you can do it. Like, yeah, but there's more on top of that too. So if, if I'm 10 or $15 more an hour and I've calculated out to say, this is what I have to make, and then I've come to find out I'm $10 more an hour than everybody else, I better have something that makes me worth more than $10 an hour. Cause ain't nobody going to give them. They don't care that my shop rent is more than anybody else's. They're going to drive 10 minutes to the guy that's cheaper. You know what I mean? Like I'm in a convenient location. Sure. But they're going to go somewhere else because it's cheaper. And if we're offering the same service, then it's the same. So it's like, like you said, it's like, you know, that customer service and it really brings back to like those days of being a chauffeur really helps because you innately have that ability to say, Hey, you know, what was your name? You write their name. Now, like you said, you remember their name and you're like, Hey, you just noticed a car seat in the back seat and you're like, Oh, you got a baby. Like how old is your baby? You know? And, and you just, you just pick up on these things and before you know it, it kind of becomes natural. And I mean, I, for the most part, you just try to be a decent human being. Like, you just try to be nice, but you start realizing, yeah, you start realizing like, Hey, don't like, don't be shy or awkward. Cause that's the other thing too. Is like, you kind of don't want to bother anybody. You know what I mean? Like you get this feeling like, Oh, I don't want to bother. I don't want to ask them. They just want to get here and get the car fixed and get out of here. It's like, no, like most people respond pretty well when you're like a nice person too. Yeah. And so just having that and having an air freshener hung in their car and like cleaning their car before they pick it up and make sure like, and like you do these extra things that at the time doesn't sound like, like your list, you're talking about, you have all these little things you just gave yourself to do, but now you're worth more because you do these things, you know, and like when you're saying about all the stuff that you do and doing your personal touch, it's like, that should be worth more than a big company, even if they have 300 reviews, because you're personally touching everything and you got your, you're the owner, you're giving your personal touch like, man, you should charge more for that because there's, there's more of a product that you're offering, you know what I mean? But when you're first starting, nobody knows that nobody knows that you're going to do that. So you got to bring them in and show them. You're kind of like, Hey, give me a shot for free. And the next time around, then, you know, like, then you know what you're getting.

19:31 Jed McClure Right? Absolutely. Absolutely. I feel like, um, well, I just had, what was I just going to say? It's like you go through phases as a business. So, you know, in the early part, you might compete on price because you're trying to get anybody in the door.

19:45 Jimmy Purdy You know, you just want to get them there to meet you. Yeah.

19:48 Jed McClure And then later on you start competing on like, uh, you know, so you're competing on price and the quality of the service and like the frequency with which you touch the customer in terms of like taking a little bit of extra time to be personal, taking extra time to be really communicative and stuff like that. Just making people feel really comfortable and safe about the fact that they chose to bring their car to you or they chose to schedule a wine tour with me or whatever it is. And then later on, when you're in a phase, like maybe you hit five employees or something like this, and then it changes a little bit because you're established and you don't have to work as hard or price a little bit lower than the competition to get them in the door. But now you don't want to let that customer service slip because you don't want to start seeming aloof and uncaring. Right? Because then that's going to reflect. It's like, there's different phases. You could even get like really big to where it's like, uh, maybe you have so much of a, of a reputation that people like will make it, the customer will like make excuses for you because you're like so well known and I'm not there. I don't know if I'll ever be there. And I don't know that you ever would either, but sometimes it's like your brand can be so strong that it's almost like you have room to slip, like maybe in and out burgers. Oh, I see what you're saying. Like you're loyal fan base. Yeah. Like if I go to in and out and I have a bad experience, it's not going to damage my relationship with the brand because I've already been there 250 times. And I liked all 250 other times I went there. So it's like, they could practically like slap me across the face one day while I'm, you know, ordering a burger and like, I would still be back.

21:16 Jimmy Purdy And you would look at that employee, like you're not a true in and out person. Exactly.

21:20 Jed McClure I would make an excuse for the brain. Exactly. Yeah. And so like, you know, certain brands in and out, like trader Joe's, uh, Apple, there's certain brands that get to this, like, there's just a king of the mountain, like brand value place. You can monopoly, you know? Yeah. Well, yeah. In terms of like, in terms of like loyalty and love and goodwill, right? Goodwill is the technical term. And so I don't know that in, in wine tours, you could ever do that or in automotive service, you could ever do that, but there's like, there's a, there's a life cycle to businesses, it seems like, and then you can even have beyond that. You, you have a business like McDonald's or, um, or, uh, Microsoft where it's like you were the king of the hill and everybody loved you 25 years ago. And then you just got like lazy and you wrote it out, but there's still like a ton of value in the brand, but like now you're like the old lazy one that doesn't like put effort in anymore or something. You know what I mean?

22:13 Jimmy Purdy It's definitely, it don't matter how high up the mountain you get, you can always fall back down. Yeah. You definitely, you can slip. And you know, in this day and age with, with reviews and social media, it goes quick too, I think, I mean, to your point, I think 10, 15 years ago, it's definitely has something to do with me. Look at McDonald's. It's just, they don't do anything special, but they were just in the right place at the right time, given the right product. And yeah, they really couldn't do no wrong. I mean, at this point in time, I don't, I don't know if that's a conglomerate that'll ever fall, but to your point, like I get it, like you get to a point and it's like, it doesn't matter. You know, it's just the consistency behind the product is all it takes. This is constant, you know, and I guess a little off top, I guess a little off topic as far as customer service, but I get what you're saying. Like, you definitely get to that point where you're like, you know, you really can't like too big to fail at that point. Yeah, exactly. You know what I mean? Like, exactly. Yeah. But that's a hard thing to do in that service industry when you're owner operator. Yeah.

23:11 Jed McClure The reality is it doesn't apply. That's not a set of conditions that applies to your business or mine.

23:16 Jimmy Purdy Right. I mean, in this day and age too, it's, I mean, everybody's just looking for that, you know, to find you slip up and just tell the world about, Oh, I got, I look what they did to me, you know? I mean, you always get 10 bad reviews for every good one is what, you know, they say is like, so it's like, if you can keep these positive reviews going, it's like, you just work so hard on it, you know? And I think all of us in all the service industry is like constantly worried about that bad review constantly. Well, like it's going to like completely devastate your business. If you get one bad review, you know?

23:46 Jed McClure Yeah. Well, it seems like automotive service, you know, is, is a, is a little bit of a rough one because people really, when they come to you, they need you. Yeah. You know what I mean? They don't have a ton of choices. I mean, they can choose one of your competitors, but they can't choose to not get the service done for the most part. And so that's a different like disposition to which a person comes. Like in real estate, if a buyer comes to me, they may or may not really want to buy a house because they may not, they may or may not really have the kind of gumption to pull the trigger and make the jump because it's a huge decision. Or they might be desperately motivated, but like they can choose to work with one of my competitors or work with me, but they also could choose to buy a house right now at this juncture in their life or not buy a house right now at this juncture in life, but when somebody, you know, blows a head gasket, it's either you or the guy down the block or the guy around the corner, or they're getting rid of their car or they're getting rid of their car and they're coming to you kind of, kind of scared too. It's not like consumer discretionary either where like with the wine touring, this is extra money they have. They don't, uh, you know, they could do other things. Well, they're out having a good time. Yeah. And it's there. They want to spend it on something they want. Whereas a blown head gasket, nobody wants to spend money on a head gasket. Although you do get, I guess part of your business is people with project cars and classics, and then you actually have a sense of love. Like somebody bought this thing because they wanted to put money into it and do stuff. So they come to you and they're actually all excited. They probably want to talk about it.

25:15 Jimmy Purdy And the excitement, and I've said it before, the excitement turns into anxiety. Anxiety turns into excitement. People get confused about those two emotions a lot. And, uh, and then, yeah, it's an emotional purchase. It might've been their dad's car, their mom's car. Uh, there, there's a lot of emotions behind a vehicle. I mean, it's a sense of freedom. It's a sense of purpose, you know, for the first time in your life, when you get in a car and take off, that's like the first time you're truly free. Right. Yeah. Um, and so it, yeah, it's in, and I mean, I have to understand that every day, like the amount of anxiety people come up with and, you know, sometimes you can drive five, six, seven years without anything happening. And then all of a sudden, one day that's it, you know, and you're like, what did I do? And it's like, you didn't do any, well, for one, you didn't keep it maintained or service, you know, you got to go to a shop, you're going to spend $1,200 a year in maintenance or you should be anyway. And if you don't, you're going to catastrophic breakdown. Well, the problem is you can do the right thing and still get a catastrophic breakdown. So it's like, you either get the shock of like out of nowhere feeling, or you're like, Hey, I've been putting all this money in this car and it still left me still left me stranded. So it's like, either way it's like, they still feel like they're eating the bad apple, you know? Yeah. And I mean, and I'm here just to help, but of course I'm the guy that fixes the car. So I must've been the one that built it as well, you know, like, well, I didn't, I didn't do that. Like I'm here to help if you want it. Like I can help you with this, but you got to realize like I didn't buy it. I didn't build it and I didn't break it. So, yeah, yeah. But I mean, that's just part of the deal. And it's like that with any customer service. I mean, even if it's not like you're not going to have a bad experience taking people out wine tasting, you know, I think the same thing is like, man, how could anybody like, how could that ever go wrong? You know, but you know, people are people and they're going to find something to, to grab at you about as well, even if they're out just drinking all day. I mean, you had alcohol to the mix. Absolutely. You had alcohol to the mix, alcohol to the mix and one miss one mistakes made. You're going to have a breakdown, maybe a flat tire. And it's like, why did you let this happen to me? It's like, this is what so far out of my control. I don't know what like, yeah, this isn't, you know, like I got a flat tire. It happens, you know, and it's going to happen at some point and someone, hopefully you get the right people at the time, but you might not. And you're going to have some people that are upset. Well, where's the other, there shouldn't there be another van like following us? Like they're ready to take, I mean, I dealt with that when I was driving limos, we'd have breakdowns and it's like, well, where's next? Well, there isn't a next one. Like you think there's a car just waiting?

27:45 Jed McClure Like we hold one in backup position. Right.

27:47 Jimmy Purdy Right. And it's like, it's just part of the deal though. And it's just part of the customer service and you just say, look, this is, this is what's happening today. You try to make the best of it. And that's all you can do. Yeah.

27:58 Jed McClure You know, can't make everybody happy, you know, can't make them all happy. You just try your best and, and let it kind of shake out a little bit. And, and you probably have a little bit of like, sometimes you probably get somebody that comes in where you, where you probably can sniff out like, yeah, this, this person is sort of primed to not be a happy camper right here. And maybe this is, this is a job that's better off.

28:21 Jimmy Purdy I just send it on down the road. It happens. And, and, but you never know. And so I think that's, that's one thing you learn as the years go on. And I think as you get older, you probably get better at it or maybe get more jaded about it. I don't know. I mean, yeah, you get the vibe and if you're busy enough, you don't need it. But when you're first starting out, you don't have a choice. No, take on everything you can. You take everything. And, and as you grow and you know, as we're growing, we have to take more in. And so the luxury of picking and choosing is, is going by the wayside because we have more texts now, so we need more work. And so we start, you know, having to say, we'll just see what happens here. Right. And that's what you have to do. And you know, you can't say no, just because you had one small little glimpse of like, uh, I don't want to deal with this. It's like, well, that's just part of the job and you're just going to have to deal with it and you just have, you know, something might go wrong. And the one thing too, you learned or I've learned is, is you get better at handling those situations and the more times you put yourself in that situation, the better you get at handling it. And then it's just more revenue. Right. So even if you have someone that's not ideal, if you can manage them and manage the situation and still get paid, then the ball keeps rolling, you know, instead of just saying, Nope, I'm not doing it. Don't I don't, I don't need to deal with that. Like, no, it's good to deal with it. Cause you learn more. Absolutely. And you get better with people and you start realizing like they're just people. And there is a line where it's like, dude, you're just unreasonable and it's time for you to go. Like you have unreasonable expectations and it's time for you to hit the road. Right. But some people have higher expectations and I've learned like, you know what? I can appreciate that.

30:00 Jed McClure I can, I can appreciate high expectations. Yeah. I think you're absolutely right. Every time you deal with a difficult customer or a difficult person, it's an opportunity to grow up. It's an opportunity to be more of an adult than you were previously. And boy, if there's one thing that's valuable in this life, it's like acting like an adult, you know, like if there's one thing that's going to serve

30:20 Jimmy Purdy us well, it's to grow up and handling a difficult situation. Yeah. I mean, it really is.

30:26 Jed McClure Yeah. You know, I think nobody, nobody looks back, you know, once there are little ways into adulthood and goes, Oh, I wish I had grown up more slowly. You know what I mean? Or, or you know what I mean? I wish I, I wish I had been less mature when I was 25 or 28 or 32. Like nobody thinks that we all look back and go, well, I wish I'd been more mature when I was 25.

30:45 Jimmy Purdy I could have handled that situation better. Yeah, absolutely. You know, but then you get the ones that never deal with it and they're 50 years old getting in fights at the lake. Yeah. Yeah. Yeah. Yeah. You don't want to be like fighting with like fists. Yeah, exactly. At the launch ramp, like what are you doing, man? I've not learned how to handle a stressful situation before. What the hell is wrong with you? What the hell is wrong with you? And that's what happens. You got it. You got to have the ability to say, calm yourself down, get yourself out of that space and then get them out of that space. That's the hard thing. I mean, it's hard enough to get yourself out of that space, but then now you have to look at them and get them out of that space and it's like, okay, now what are we upset about? Like, now cut to here, how do we solve the situation? Because now that you're not upset anymore and you're not getting me upset anymore, what is it that the problem is? You know, like, oh, well it's a hundred dollars more than it's like, that's it. Like, like we can figure this out. Let's just split the difference and call it a day, right? Or whatever, you know, like, like, well, actually it's, it's because my kid is like, and it's always something else, you know, has nothing to do with the situation in the shop, but we always feel like bartenders, especially, I'm sure a lot of customer service advisors and shops can, can attest to this. And I'm sure you can too. I mean, obviously when people start drinking, you just become the bartender. They start telling you stuff is like, why are you telling me this? I'm not gonna people come in with their cars that are broken down. And all of a sudden you've, you've known their entire family history and like 10 to 15 minutes, you know, her grandma had cancer and her mom passed away and this and that, and the other thing is like, I didn't need to know all that, you know, like, but you're trying to be nice and you know, you want to keep a conversation going and being an adult, but the end of it, you're like, I didn't need to know like all that stuff, you know, I was on the toilet all night, like keep all that stuff to yourself and I don't need to know it. It's like, it's interesting how quickly it gets personal, you know? And I think that's part it's, it goes both ways. It's like a lot of personal stuff for the good way. And then they get really upset and negative because it's very personal. It's the same. It's like, it's, it's very interesting. It's interesting though. Yeah. The humans, the humans are the most interesting animal out there. And of course I haven't done a lot of other customer service other than run the shop. So it's like, I don't know if other industries deal with that, you know, other than maybe a bartender, when people start drinking a little bit and all of a sudden everything's floods out, but it's just interesting. Nine o'clock in the morning, you can get someone dropping off a vehicle before you know it, uh, you know, their dogs at the vet because, uh, of whatever, you know, I was like, how, why do I know that about you?

33:29 Jed McClure Yeah. It's the, in no way pertains to the business at hand, but I know that

33:34 Jimmy Purdy by the way, what was wrong with your car? You know,

33:38 Jed McClure another thing that's funny is that some people are really good at that kind of small talk, like some people can make themselves feel interesting and sort of, you know, casual, friendly, uh, open, you know, personable way where you enjoy talking to them about the fact that their dog had a surgery. And then another type of person, uh, kind of puts it on you like a burden, right? It's like, they don't have anybody else to talk to you. So you're here right now and they got to get their car fixed. I think that's the majority. Yeah. Yeah. Yeah. I've met some sales, uh, people that I've found to be remarkable by way of like how personal, how interested in other people they seem to be. It's like, they'll be talking to me and they're asking me questions. And I realized that this person is like showing a lot of interest in me as a person and what I can read on them is like, this is their disposition. Like they're just genuinely interested in people. And like this guy actually wants to know these things about me because it's pleasing to him to find out about who I am, even though like at the end of this wine tour, we're never going to see each other again. You know what I mean? This is a corporate group. They came in the salespeople. It's a trip. They've got a seminar later on, whatever it is or tomorrow or something, you know. And it's like, it's like some people have a way of making small talk that is genuinely appealing and, uh, and, uh, endearing. But then I think you're right. Most of the time they don't have a lot of other good relationships in their life where they can really talk to somebody and tell them how they feel. So then boom, all of a sudden they're telling the service tech.

35:12 Jimmy Purdy Yeah. Everything comes out. The flood gates open and you're like, all right, well, this is what you need right now. Yeah.

35:20 Jed McClure That's all good. Kind of let them have their little therapeutic, you know, give them about three minutes and then you got to make an excuse to the next thing you've got to do.

35:28 Jimmy Purdy That's the hard part. For sure. That's, that's part of the gig though.

35:33 Jed McClure Breaking away from those ones.

35:35 Jimmy Purdy So transition and over. We'll shift gears a little bit here and move into the real estate stuff. Right. Um, which is something I was really, uh, interested about because it's a strange time right now and trying to buy commercial real estate is, I mean, as a shop owner, that's the ultimate goal. You don't want to rent. Nobody wants to rent. Um, it's ideal when you're starting and you're growing, but eventually it's nice to own it, make a mortgage payment. Um, in this area, it's, I mean, I wouldn't say impossible. Nothing's impossible, but if there was an impossibility, it's fine. A commercial, let's say around me right now, but I mean, you are really wrapped up into it. I mean, you really do your research and find out this stuff. So I was really found it interesting. The videos you were putting about, um, how the market's going and your whole conversation about how, I mean, I'll, I'll let you get into it, but how COVID changed that I thought that was a really interesting take on like what the potential projection of commercial real estate is going to turn into, right? Um, because of COVID and the landlord's not getting that income because everybody started working remotely and now you no longer have these commercial spaces being taken out by a tenant. And also they couldn't rent to nobody, right? Because of COVID. So it's like they, there was a pretty big spread of this drop in income from tenants renting commercial property, right?

37:07 Jed McClure Absolutely. What's going on right now in commercial property, the main thing that's going on right now is that there has been a dramatic rise in vacancy rates in two types of commercial, uh, buildings, commercial properties, and that's office space and retail, um, you know, brick and mortar, physical retail, like a boutique shop that sells, you know, handbags and hats and women's clothing or whatever, anything electronics, whatever it is, those two categories of commercial real estate are really in trouble right now. And it's already baked into the cake. Like there's going to be a whole series of defaults. There's going to be a bunch, there's going to be a foreclosure crisis, just like in the 2008, 2009 financial crisis, when all the single family foreclosures happened, but it's not single family homes, it's commercial properties. And then it's not all of the commercial properties. It doesn't involve a light industrial and commercial service and warehouse. It doesn't involve self storage. It doesn't involve farmland. It's specifically office spaces and retail spaces. And COVID really did it because it, you know, there, uh, a monster number of white collar workers started working remote during COVID. And apparently, basically workers love that. Apparently once people get to work from home, whether it's two days a week or four days a week or five days a week, you know, they realize I can go rent a little Airbnb, you know, up by Shaver Lake. And as long as the wifi is good, I could kind of like be in Shaver for like two weekends and the whole week in between, you know, maybe with my kids or my boyfriend or whatever it is. Right. And I can do my job from there and I got to put in my 40 hours and get all my stuff done. But then as soon as it's done, we go rent a little paddle board. Yeah, you're right there. Instant vacation. So like that's appealing. And so a huge percentage of, of a lot of white collar workers got a taste of something they'd never had before. And there was like a kind of permanent like work culture shift where like a lot of people decided like, I don't want to go back. And a lot of companies basically found out. I mean, Elon Musk is the big, you know, he's all pissed off about it. But a lot of companies basically said to themselves, this actually works. Like we actually can trust our employees to be, you know, working remotely two, three, four, five days a week, whatever. And so that means that there's, you know, companies that needed office space for 200 employees all of a sudden need office space for 30. And so what are they going to do? They got to get out of the lease they're in and get to a smaller space. Right. You know, and so, and so that, and then retail also, we, we had a trend that was already happening where, I mean, obviously Amazon didn't start yesterday, right? Like online retail, Target, Walmart, Amazon. This has all been going on for a long time. And the percentage of retail that was brick and mortar where people walked into a store and bought something versus the percentage of retail that was online where people bought something and it was delivered to the front door that already had really changed and, and, and purchases were moving online. But during COVID that massively accelerated. And so that means there's a lot less need for retail spaces. You know, the tenants move out, the tenants shut down. And the landlord doesn't have somebody else to rent to both for office and for retail. And so what we have as a foreclosure crisis where individuals that own those types of buildings and also investment groups, insurance companies, university endowments, all the institutional buyers, cause they own a lot of those big office buildings and strip malls and things like this. Um, they're going to lose those buildings and a lot of those things are going to get sold cheap. I've heard numbers as large as like 40% in terms of price declines in those two categories of commercial real estate. And that's all coming this year and next year and even in 2025. And so this is, it's a major economic story because it's not only going to affect obviously the commercial real estate market, it's going to affect banks. And then is that going to lead to, you know, a cash crunch, a liquidity crunch in banking, which can essentially cause a recession. The government has to come in and bail them out. There's all that stuff too. And I think for our purposes in terms of our discussion today, the main thing that the listener needs to know is that we're having a very large, very high dollar volume catastrophe of foreclosures in commercial real estate. It is not in light industrial. It is not in commercial service. So it does not specifically pertain to the types of properties that you guys are as, as auto service business owners are looking to either lease or purchase. And so there is not going to be a direct crash and a fall in the pricing of the types of businesses you guys are looking to buy. But the question is, is the larger malaise in commercial real estate and the larger malaise in the lending world, because if banks, you know, if banks get real tight on cash because everybody's defaulting on the office buildings, that makes them more hesitant to loan to you, the auto service business owner in terms of buying. So then what they're, they're lending, you know, they're lending criteria to get tighter and now instead of 25% down, they want 40% down. Well, do you have 40% of a million dollars? And do you even have 25%? It's hard enough to come up with either one of those numbers. So now, oh, now we want a cosigner when you want 40% down on a cosigner. That's a lot more difficult than 25% down and no cosigner, this type of thing. And so directly, this really doesn't affect the types of properties that you guys are looking to purchase or lease, but indirectly it might, and we're not really going to know how that plays out until it plays out. And so we should be, you know, we'll have more information like fall and winter of this year and into next year in terms of what's happening, but it would seem to me like the main thing that your listeners are going to want to know is, well, is there an opportunity here for me to potentially purchase a commercial space that'll work for, for my shop, for my business at possibly a discount in, you know, say nine months, 18 months, 24 months, whatever it might be. And the answer is possibly, I think, I think the answer is as far as I can tell in my analytical brain, the answer is possibly that's going to happen and it probably won't be a huge discount. You're not going to be looking at some kind of large, you know, 25, 30, 40%

43:20 Jimmy Purdy now buying stuff for foreclosure prices. I mean, there's going to be a swing. That's the main thing. There's a, there's a change coming. Yeah.

43:28 Jed McClure One way or another. Let's say that, that banking lending standards, um, tighten up. And so there's less money for buyers. So there's less buyers for these commercial service type spaces, light industrial type spaces, and that the general malaise and commercial real estate also weighs down more broadly in commercial real estate, is there going to be a 5% or a 10% or a 12% retraction in prices for the types of spaces you're looking to purchase there might be. And so if that's what's going on, you know, November of this year, February of next year, June of next year, like if you guys are looking to buy, they at least need to be aware looking to buy and looking to lease that prices may swing. And the, the, the kind of negotiating power you have may swing in your favor visa, visa, the seller or the lesser in terms of trying to get into a lease or get into, you know, a deal structure where you're going to purchase something. So that might move in your favor, but then if lending standards tighten up, that moves against you. Yeah. It goes the other way then. Yeah. And so then maybe, maybe the price drops 10%, but you've got to come up with a larger down payment or the price drops 10%, but the loan would have been 7.5% and now it's 9%. So the money's more expensive. So probably looking at a mixed bag and then almost certainly not looking at a catastrophic, uh, yeah, I don't see anything that looks like a catastrophic downturn in terms of, uh, pricing for the types of spaces you're looking to get into. Another thing I had looked into is, is, is one of these actual vacancy rates. And apparently the vacancy rates are getting pretty high. I mean, like they're like 40 and 50% in certain, like financial districts, office districts, um, in places like San Francisco and stuff, like really in LA, like, like there's a ton of office space that is just sitting vacant. Yeah. These desperate landlords. But apparently for like industrial space, especially small and medium sized industrial space, vacancy rates are down around like three, 4%. Um, so there are not a bunch of landlords, nor a bunch of sellers out there on properties that they can't lease out, uh, and that they can't find, you know, a lesser for. And so the desperation in this particular segment of commercial real estate isn't there and I don't see anything that indicates that it will be, but potential opportunity with, with broader economic problems and broader commercial real estate, uh, troubles bringing prices down. So certainly something to watch because, you know, look, if real estate super expensive, like it is here in our area, right? Whether we're talking single family, multifamily farmland, anything, it doesn't matter what you're talking about. It's all really expensive. I've got a lot of zeros behind it. Yeah. And so like, if you can find timing where you do have a 7% or a 10% or a 12% retraction in prices, well, you certainly would want to take advantage of that. If you can. Oh yeah.

46:21 Jimmy Purdy Every little bit helps. Yeah. And in those situations, you know, I mean, being here in California and the

46:27 Jed McClure central coast is like the hotspot as far as pricing is concerned, everybody wants to be here.

46:35 Jimmy Purdy I mean, yeah, it's, it's, I mean, you got San Francisco, you got LA, but that's like, you know what you're getting yourself into there, you know? Yeah. But it's like here, we're not used to that stuff, right? I mean, growing up around here, it's like, and seeing these prices now, it's

46:49 Jed McClure like, what exactly it's a sea change because people were, you know, people were used to the idea that the big cities were more expensive, you know, 20 years ago, that was just sort of, we understood that, but now it's like, everything is more expensive.

47:00 Jimmy Purdy Right. And that's, I'm sure that's happening all over the country and your small farm towns being infiltrated and everything going up through the roof. And I mean, this stuff you're talking about is, is not just statewide. This is country wide stuff. Absolutely. It's affected everybody from coast to coast.

47:19 Jed McClure You know, I've looked at single family housing prices in places like Chattanooga, Tennessee, and Peoria, Illinois, which are, these are towns. These aren't cities. These aren't major Metro areas. This isn't Chicago or Atlanta or New York city, right? There's no big financial district in Chattanooga, Tennessee. Like it's just a whole bunch of people, you know, bunch of rednecks doing redneck stuff. It's just normal stuff. It's Templeton. But it's like, you look on, on, uh, online, you look at housing prices and it's like, you're seeing houses that are like 385, 325. It's like, this is a town that's not that large in the Eastern part of Tennessee and you're going to drop 300 plus thousand dollars to get a newer home, you know, like, boy, and you can get a piece of junk there for like, you know, 225, 240 or something like that. But it's like, well, a piece of junk in Chattanooga, Tennessee, 10 years ago was more like 70,000 bucks. So yeah, it's a nationwide problem. And there's no doubt that the world has changed. Like the world we grew up in is not the world that we're now having to navigate as adults, like it's not the same.

48:29 Jimmy Purdy Yeah, it's not the same. It's not the same. And I mean, I get inflation, I get stuff goes up. It's not always going to be the same, but the changes between 1970 and 1990 and 1990 to now is not the same. No, they're not. And the timeline is, uh, it's a little less, you know? Um, so well, 1990, like nine, I guess you would say if you want to split the difference, but you get what I'm saying. Absolutely. It's definitely a lot more change in the, in the time period than previously.

49:02 Jed McClure The economic reality of this country is, is dramatically altered from what it was in like the 1950s and early mid 1960s, which we all look back on as this golden era, right? That's like this era where people look back as Americans and economically, you know, the middle-class was so big and so strong and everything was just powering forward, huge growth rates. I mean, our economy was growing at, you know, five, six, 7% every year, just powering forward and that's just not the reality we live in anymore. The middle-class is smaller. It's so much weaker. Wages are so much lower. Housing is astronomically more expensive than it used to be literally. Like housing is basically like triple quadruple, even five times more expensive relative to incomes now than it was in like, say 1965. And it's like triple what it was in like 1999 and it's double what it was like seven years ago. So, you know, it's, it's just a completely different reality. And I don't know, you know, a lot about your business, right? So automotive service, I know that, you know, hourly labor prices, the prices you guys have to charge and the prices that you're able to command in the market have gone up quite a bit in the last decade. And obviously the consumer doesn't like that because, you know, we don't, we don't want to pay more for auto repairs. And then for you guys, it's not like you're pocketing all that money. It's not like, it's not like you doubled your prices and like, you guys are just ripping down so much cash. I don't really know what margins look like in this business and you don't need to like jump all into it, but like your cost for, for the parts, for the lubricants, for the, the, the, whatever the seals.

50:43 Jimmy Purdy I don't know all these things, but everything, everything, I mean, everything from like the business standpoint, paper, ink, right? Yeah. Computer programs, like normal business stuff that we all have. And then you roll in, like you said, you get into stock of like having to stock certain point filters, bulk oil, bulk fluids. Yeah. Yeah. Lifts, lift maintenance. You got these $12,000 lifts that have to be maintained. Air compressor, air compressor tanks got to be certified airlines, airlines gotta be, so you got the EPA coming in to check. So if you got the environmental print, you know, the county health coming in to make sure everything's good. Um, I mean, everything's gotta be contained. You gotta pay for that program. You know, then you gotta pay for all the different programs. Then, then you get into like the, when you call it extracurricular, right? So then we pay to keep our guys ASC certified, which is not a requirement. You know, the BBB, the better business bureau, and then, uh, then you have to pay for just department of consumer affairs, the DCA, and then you gotta have your bar license, your bureau of automotive repair, that's things that you have to have. So there's this mix and a lot of guys will just draw the line. I'll just get what I absolutely need. And that's it. And it's like, well, that's not, in my opinion, good enough. Like I want to be technically savvy. So there's a lot of other stuff on top and that's still like kind of business stuff, you know, and that's still not like getting into like, like you said, the actual automotive service side of like needing these different things to keep things rolling and so, and then let's talk about rent and, and electricity and water. And then you got uniform services and the rag guy. I mean, there's just layers upon layers upon layers. All those things have also gone up. Every piece of that pie has all been elevated, including rent. I mean, it was, oh, well rent's gone up too. So, but you have to go up that much more is like everything I just stated has also all gone up, you know, services, you know, just snacks to have in the fridge for the guys, like we've all gone grocery shopping and it's like, yeah, they don't need snacks, but there's a technician shortage right now, right? And without my guys, I'm nobody. This isn't a shot without my technician. So they get whatever I can give them. You know, if that's a pay raise, if that's sent into technical schools, seminars, having sodas and snacks in the fridge, like that's the stuff that I would want, so I'm going to have it in there and I'm going to buy extra so they can have some, yeah, it's not like you can't like, it's a line item, but it's not like you can say, oh, well you're charging more just cause there's snacks in the fridge is like, you're missing the point here. Like these are things that I want to have to run a successful business. That's also gone up in price, you know, and the computer programs, you know, like you gotta, you can't run a auto show. I mean, I'm sure there's guys are that still writing it on paper, but you gotta have a, you gotta have a program. You gotta have something where it goes in that information saved. We give a three year warranty. You think we're going to remember the car that come in three years ago? Like that stuff needs to go into a program and be saved so that when it comes back in, we can warranty it for the next three years. And if it's not me running the office, if we hire somebody, they know, and they don't have to call me and ask me, Hey, did so and so Mrs. Jones come in here and get her, you know, rear axle replaced. And, and is this under warranty? He's like, just look at the computer. You gotta have a program for that, you know? So, and it's gotta make it efficient. And that's gone up as well, you know, cause they got people that they hired to keep that computer software up to date. So yeah, it's just all around. It's just, everything's gone up and there's a lot of guys that are stuck. Like I'm not charging more. You have to, what are you talking about? If you don't, you're shortcutting something somewhere. And typically that means that you're not paying your technicians enough, or you're not doing the job properly because you're cutting a corner to do it quicker. So you don't have to pay them as much. Something you can't not pay your PG and E bill. Cause it's gone up. You can't not pay your extra rent, right? Like all those things like our overhead that have to be paid. You can't just be like, Oh, I'll just pay a little less on that. It's like the only way you can shortcut yourself and keep your labor rate lower is the one thing that you can control. And that's the technicians, your employees, you can pay them less or have them do the job, not to standard spend less time on it. So you're not paying them as much, but still charge the same. I mean, right. I mean, that's the only way to do it. Or you can just literally just start losing money and like, well, I just won't take a paycheck anymore. So my, my labor rate can stay the same. Like exactly, but you can't do that. Cause you also have to pay for your house and your groceries and your kids.

55:12 Jed McClure And your income has to rise if the cost of living rises. Right.

55:16 Jimmy Purdy You know, it's all relative. Like you're also have to, you can't like take money out of your pocket to like make sure your labor rate stays low.

55:23 Jed McClure Cause you don't want to be the guy to raise your rate. Isn't it stressful being an adult? I like it. Cause it's, you know, it's funny, we sit here, we talk about this and it just reminds me of listening to my dad talk to guys that he knew back in the day. He realized like, geez, dude, it's like you get into like, you know, your thirties or forties or whatever. When you're in that middle part of life, when you have a lot of responsibility, you have a lot of responsibility. Like no wonder people are all stressed out. Like there's a lot of stuff to think about a lot of stuff to take care of. I, I saw somebody somewhere, somewhere online and they were saying, you know, they do all these happy happiness studies. They, they pull people all over the world every year and ask them how happy they are and you know, gender age, different countries, all this kind of stuff. So we know like which countries have the happiest people and we know what time periods in people's lives are happiest. And one of the things I noticed in our conversation right now, talking about this makes me think about it is that people are happiest when they're in early adulthood, before they have kids mortgages and major bills and responsibilities. And they're happiest when their kids are growing and they're retired or semi retired, but that middle chunk of adulthood where people like have mortgage payment or they're stressed out because they wish they had a mortgage payment. Right. Yeah. And they've got a business to run. They've got a career. They've got these responsibilities. They've got little kids that there's, there's a noticeable, substantial statistical dip in how happy people report they are with their lives. So it's like early adulthood and late adulthood are the happiest and it has to be because the stress levels lower. And you know, we're both in that middle adult section now where it's like, dude, like you better keep this thing running because you're going to be in a world of pain if your business doesn't work, if your finances don't work, if you start drinking too much, you know, if you, if you, yeah, if it, if it comes off the rails, you're going to be hurting and you know that, so you've got to get up in the morning and you got to keep your nose to the grindstone. You've got to make it happen. And that's an innately stressful thing.

57:16 Jimmy Purdy And it's easy to slip up because you know, alcohol, there's a lot in this day and age, there's a lot of everything. Yeah. Whatever you want, man, sugar, whatever you need, alcohol, you just pick up that phone and whatever, man, you can just find it on your phone and that's it, man. It's all right there. So easy. So obtainable. Take so much more mental strength to stay doing what you're doing. And then even like being, you know, in the, in the position of running a business, you have a lot of gross revenue. You don't keep a lot of it. I mean, we keep, you know, like any other business, it's 10 to 20% that you keep your net and it's pretty standard, like for anybody, you know? Maybe the bigger ones, they get lower, but your multi-billion dollar company and you keep 3% of it, you're doing pretty freaking good, you know? But the bottom line, what I was getting at is you get a lot of this gross revenue coming in and then the wheel starts spinning, right? And yeah, this stuff's not due for 30 days, but there's 50 grand in the bank, a hundred grand in the bank, 200 grand in the bank, right? But that's all going to go away in about 30 days, right? When everything's, you know what I mean? So you're, you're really managing a lot of cash and yeah, that temptation there, you know, Hey, if I just, I could just do this, do that. And then you get these like people that are selling you something, you know, whatever it is, like timeshares, that's a good example. You know what I mean? Like, we all know better now, but it comes up as these temptations that come up. And it's like the added stress. Now you have this exit that looks like, Oh man, cause spending money feels good. I don't care who you are. It feels good.

59:00 Jed McClure You are, you know, spending money is like getting a donut, you know, like, you're going to like it. You're going to like it.

59:08 Jimmy Purdy And that's another vice, you know, as, as, as being the one that controls the finances, you have, you have that authority to do that, you know, and you have to remember like, Hey, there's guys that are counting on this money for their payroll and their kids. And they're like, no, I'm not even like, it's not even a thought that I'm going to touch it, but you know what I'm saying? Like that's also there that piles on that. A lot of people do take it and they do do that. And they like, I had this money and I spent it and now what am I going to do? And now it's like, like they spend the next 10 years trying to make up for it. It's like, cause it, it does. You just, in your mind, you're like, I'll make that right back up. No problem. But you'd never do, you know, and I mean, I'm sure you have to, but we've all seen businesses do that. You know, they don't pay their guys. They've given much hold that for a couple of weeks on like hold my check. Like, what are you talking about?

59:56 Jed McClure Yeah, absolutely. You get to that point. You've got a problem. You got a big problem.

01:00:01 Jimmy Purdy You got a cashflow problem where you spent it. I mean, but it all, like I said, goes back down to like that mental staying strong and staying just on that. Having your vision being dedicated to it. This is what, like you said, with your, with like, this is what my plan is. And I think that's why it's important to have a business plan and a vision, you

01:00:21 Jed McClure know, absolutely when you're moving forward, the wonderful thing about being a business owner is that it forces you to step up. You have to step up. You have to become more adult. You have to try harder. You have to be more on point. You have to be more realistic. You just have to. And that's the great thing because it forces you to become a bigger, better person. But then the downside is you're like, you can feel like a ship in a storm without, without a rudder, you know what I mean? Like sometimes you're like, I don't know what's going to happen next. You know, what are the economic conditions going to do? What's the price of this going to do? You know, like, like in, in, in, in the wine tours business, it's like when gasoline started getting really expensive, it was like, well, what if it goes up 50% from here? So now I'm doing the math on what happens if I've got to buy gasoline at eight bucks a gallon and diesel at nine 50, I'm doing the math and going, that's a problem. Yeah, that's a problem. You know, like, cause the customer is not going to pay more because my cost went up. You know, and the reality is they're going to vacation less, which means I'm going to have less incoming phone calls. Uh-oh, that's a big problem. And fortunately gas prices eased off from like last year and they, they went down a little, you know, and so it's, I look at it now and, and it's like, uh, yeah, you just, you have all this stress. So it's like, it's so wonderful that it forces you to grow up and you have to become a bigger, better version of yourself. And yet at the same time, there's a burden that comes with that because you got to carry the weight of not only are you going to keep this thing, are you going to screw it up and you're going to take that 10 grand to spend it on something you really didn't need and then regret it and have to dig yourself out of that hole or you in, in your stress, not only about your own financial situation, your own business, but knowing that other people are counting on you, both the customers and the employees and you know, you and, you know, you and Leanne are together long-term couple, right? It's like, she's working in your business. You guys have this business together. It's not like there's some other source of income from some other place. Whereas if you run this thing off the rails, well, at least Leanne will be bringing home the paycheck from the government job with the health insurance. Right. That doesn't exist. Right.

01:02:30 Jimmy Purdy Yeah. Yeah. That's an interesting point to bring up too, cause yeah, it goes both ways, you know, and I don't think a lot, I don't think a lot of people could be in that position that we're in, but yeah, I mean, it brings up a good point. Like this thing has, I mean, there is no plan B, there is no other option, which you could, I think you could go back and forth with pros and cons on that for a long time, trying to figure out which way is the best, the better way, you know? And I think just being all in is obviously the best way to go in my opinion, like just go all in and make it work, you know? Yeah. Um, having that extra source of income kind of pulls you back a little bit and allows you to say, Oh, maybe I'll make a mistake. Maybe I'll, uh, maybe it's not a big deal cause she's making money and I can make a mistake and she'll make a, you know, like, so it's like knowing that you're all in, it definitely sways you from even having that conversation with yourself for me anyway, in a sense. So it's like, that's a good thing. Like it's not even an option, but if there was some other money coming in, you start thinking, Oh, well she'll make up the other side of it. It'll be fine. I was going to buy, I was going to buy that low inlet, but I'm going to get the $50,000 one because it's cool and it's shiny, you know? And you don't think logically. And it's like the same thing with the gas. It's like, forces you to like pay attention to that stuff, pay attention to that, everything like water. I'm sure you get water. I mean, I buy water, you know, and I've come to realize I'm not going to buy bottles of water by water from the water guy. And now we have distilled water for the vehicles and we have drinking water for the guys. It was just like, you just run the numbers and you realize like, well, it's only three bucks for a case of water. Right. But you buy like four of them a month. And then you start realizing like, wow, this now I'm buying five or six cause it's summertime. And then you're like, well, I also need distilled water that I'm buying, you know, for the vehicles and he's like, I could have someone deliver it here. I'm going to five, five gallon bottle, you know, and it's like, it's just more efficient that way. And you just pay attention to that stuff where it's like, what'd you do today? Well, I did my math to figure out if it's cheaper to buy cases of water at smart final or have the guy come down and bring bottle. You did what you like, you're algorithm water.

01:04:38 Jed McClure Absolutely. Absolutely. I, but it makes sense, you know? Yeah. And that's right. And that's, you know, you're, you're referencing back to what I was saying earlier about metricizing. Do the math on everything, even the little stuff. And it's like, even if it didn't matter, cause it's only a $7 difference a month or something like that, the fact that you're got a calculator and you're running the numbers is so valuable. I did the math on the tire shine, the stuff you spray on your tires after you clean them to make them look all wet and shiny. And it was like, how many times can I shine four tires in on with this can of tire shine versus that kind of tire shine? And I think, I think it costs me something like, um, a dollar and like 43 cents or something like this to shine the tires on one vehicle. So then I'm like, okay, three vehicles in the fleet. So that's like what, uh, three, four, 54, 25. It's like $4 and 25 cents on a Saturday morning for me to shine up the, the tires on my vehicles. And if I asked myself the question, okay, is that worth it? I think the answer is absolutely yes, because all three of my vehicles show up looking really good, looking real clean. For four bucks. Yeah. It's definitely worth that four bucks. Um, and so then it's a no brainer. It's like, okay, don't think twice about whether or not to buy the tire shine, buy the tire shine. And I did the math and I know what the math is. And I know with absolute certainty, this is worth it because it's literally a dollar and 43 cents per vehicle per application. Yeah. And that's the stuff you think about when you own a business. Yeah.

01:06:04 Jimmy Purdy Well, I think, I think the more important thing, I mean, at this point, of course you've made that decision for you and it's your business. There's nobody that can tell you whether that's the right thing or not. There's probably people saying right now, like, oh, that's not worth it. Why is he spending the money? And there's people like, yeah, that makes sense. Right? Like you're going to have a divide, but it's yours. You get to decide what to do. That's the point of it. But the more important thing is, is you know, now, if you need more money, if you're getting low and you need to start pulling back, not that $4 is going to make a difference, but you know, all these different pieces and what they cost, you know, what these line items are. Yeah. You can start deleting them to get more, right? More gross income coming in. Absolutely. It's $4 is $4. Sure. But if you do that with everything, you can start really saying, okay, I'm having a slow month. What do I absolutely not need to have this business keep running? Tire Shine Reef Sun. You can probably take off that list for this month if it's not that busy, right? But that's why it's important to know all that stuff because when it happens, not if, but when it happens and you need to pull back a little bit, you can say like, what part of my business do I not absolutely need? And you got it all written down and you're like, boom, I can come up with $1,500, $2,000, $10,000, whatever it is by removing these things off the line item and not purchasing these extras this month, you know, and then you can move forward and then you can go right back to as business as usual when everything gets normal again. Yeah. COVID is a great example of that, you know. Right. Wow. And if you don't know those things and how are you ever going to like, you're just, the first thing you do is you, is you go poke the bear of like, what's the most expensive thing that I have and I'll get rid of that. You know what I mean? Like, cause if you go into a crisis state and you don't know, first thing you're doing is firing your $50 an hour tech. Dude, you need him. He's your profit Turner. But in your mind, you're like, I just got to get rid of the most expensive thing right now because I'm hurting. That's not the right way to do it. Yeah. That's what happens. And because you're not paying attention to the line items.

01:08:07 Jed McClure Yeah. You need to know this stuff off the top of your head. Kind of like you need to know the numbers in your business so well that it's like, if people ask you, you shouldn't really have to go look, go look it up, right? It depends how complex the business is, of course, but like,

01:08:20 Jimmy Purdy That would be ideal. Of course, we're all striving to get there, but yeah.

01:08:24 Jed McClure Well, it depends how many things there are too. I don't know your business model. The complexities here could be a lot greater.

01:08:30 Jimmy Purdy It's complex for everybody. And it's always constantly changing. But if a sales guy walks in and he's trying to sell you something, that might be game changing for you. Or it might just be another guy wasting your time, right? But if you don't know, then how do you know? You're just going to treat every sales guy that walks through your door like he's wasting your time. When in fact, he might have something that actually might be game changing for you. Right. Whether it's a new server, we just changed our credit card processing machine. And it's like most of those times, this guy's walking into your door and you're like, dude, I got a credit card machine. I don't need another one. Leave me alone. But it's like, we know the numbers on it. We knew what he was pitching and it was like, that's going to save us two grand a year. Nice. You know what I mean? It adds up. And not knowing where you're at and what he was offering, you would have just shoot him away. Just like you're saying earlier with the customers is like, yeah, you got to deal with some bad ones because you're going to make some money. It's like, you got to deal with some bad salesmen. Same context. He might have something that you actually need. You know? And if you don't know, then you're just like, whatever, get out of here. I don't need you. You just threw away $1,500, $2,000. Yeah, two grand a year. I'm sure it's only a hundred bucks a month or 200 bucks a month. It's like, it doesn't matter. That's all matters. Yep. You know, whether you want to go get a Starbucks that month or whatever, at least you got the money to do it. You know, that's you got to have it, you know? Yeah, it's important. It's interesting with the tire shine thing. That's definitely a detail that I mean, I definitely overlooked that stuff. I've always thought about that with brake clean because the guys like to use brake clean like two at a time. Like not just two at a time, but like two in each hand, two at a time. So you like got four cans spraying at once. Yeah. Not in reality, but I hope that painted a nice mental image is they're just laughing, just hosing now. Like, oh, I dropped some fluid, like one drop of oil and it's like out of their holster, you know, just hosing it. Like take it easy on the brake clean guys. But I've always thought about that with fluids of like weighing them, having a scale, you know, then you take your bottle of fluid, you price it out per ounce and then you weigh it and then you can charge the client. Like, well, we use four ounces. It's, you know, 32 cents an ounce. But the amount of time it takes to do that, it's like, I'm not paying somebody $40 an hour to weigh oil so we can charge correctly. It's like, no, no, if we open the bottle, the bottle you paid, you bought the bottle. Like that's the bottom line. But it's funny you brought that up because that's what it reminded me of is like weighing your oils and then like knowing exactly what the weight is per ounce and like charges like, whoa, whoa, whoa, whoa, whoa. I can't, I can't pay people to do that. Like if it was me, sure. Running it by myself. But it's like when you, I don't know if you get to the point where your, your employees will be putting tire shine on, but you can't realistically control how much they put on each tire. You can. So, you know, but at least you have that now. And if, if later on they start running through that stuff, it's like, Hey, look, I can do this and it cost me $4. You're costing me $8. You're putting twice as much on as you should be.

01:11:44 Jed McClure So it's still important to know. Absolutely. Well, you know, we use the microfiber towels to clean the vehicles, right? So we're going through those like crazy and then they have to be cleaned. You guys using the shop towels. Yeah. So that's one where like, you probably say something to your text, like along the lines of like, don't just like lightly use a towel and then throw it in the, like make sure that thing gets dirty.

01:12:03 Jimmy Purdy Well, being a laundry service, we just get them dropped off. So it doesn't make a difference. Use as many as you want. Don't leave them on the freaking floor. That's my one vice. If you use, I want to see you using it or it goes in the bin. I mean, that's just my own personal thing. I don't want rags laying on the tables, on the floor, on freaking everywhere. So you use it and it goes in the bin, but we don't buy them in bulk and then like buy another set. It's just a laundry service. Okay.

01:12:30 Jed McClure But you're paying per rag that they launder.

01:12:33 Jimmy Purdy No, it's just, it's just like a weight thing. They just drop bags off. Might be something you could look into too, because they do have carbon, the carbon, was it carbon fiber? Microfiber. Microfiber. Why do I always call it carbon fiber? So they have microfiber towels that you can rent from the laundry service.

01:12:47 Jed McClure So wait a minute. So you have, so you have like an all you can eat type thing going on there. Oh yeah. Yeah.

01:12:52 Jimmy Purdy They just drop, yeah. Once a week they come in and drop off mops, rags. And we get white rags. So I'm big on white rags. We got white rags and we get these big towels. They're like kitchen towels almost nice big ones, big fluffy cotton ones. And then we just actually added on those microfiber ones because we like to wipe the car down fingerprints, but I don't want to use shop towel rags for it. So we actually got the microfiber ones to wipe the sometimes, you know, the greasy little fingers get on the windows and on the fenders. And it's like, I don't like using the shop rags because it might scratch it. So we got the microfiber ones for it.

01:13:26 Jed McClure But that's interesting. So that might be a really good idea for my business because there's no doubt the microfiber we're always wiping down the exteriors, the windows and the interiors of the vehicles. I mean all the time. And I've already bought so many of those things from Costco.

01:13:37 Jimmy Purdy And you're not like a detail shop. I get detail shops have to have a brand new and they wipe it and then they flip it and fold it and they wipe it and then it's done. They're just like some of those detail guys are like insane with their microphones. Like it's got to be brand new out of the bag and you can only wipe the surface one time.

01:13:53 Jed McClure Which is I but yeah, I literally do that with the windows. When I do the windows before a tour, I literally use a fresh side of the towel that I flip it and then I do the other four. You know, you get eight total applications and then I can get the windows like real good. Um, yeah.

01:14:09 Jimmy Purdy Sounds a little more more detail orientated for sure.

01:14:13 Jed McClure Yeah, for sure. You're fixing them. I got to show up with the thing looking real clean.

01:14:17 Jimmy Purdy Well, I mean, I mean, like I said, well, you're not like getting paid to detail. So it's like having just, you just need clean rags. You don't need brand new ones. You just clean them up real quick. Right. I mean, it's definitely, I mean, for us, it's a no brainer. Like there's no way I could go buy bags of rags. It doesn't make any sense. No way. There's no way that's crazy. The amount of waste and then, and then, well, the problem is, is throwing them away. I can't just throw them in the dumpster. I'd have to, that's right. You can't do that. No, I'd have to like the whole is like, it's not even like, it's not even an option.

01:14:50 Jed McClure It's not even an option. See with mine, I actually launder them myself and I've only, I have like 200 of them. So I only have to do it every few months, but.

01:14:58 Jimmy Purdy Oh, well you keep them every time you wash them. Yeah. Oh, I thought you were buying a new bag every time. No. Oh, that makes sense. There's no way you can do it any cheaper.

01:15:06 Jed McClure And then, and then soak them in OxyClean and then launder them and then fold them and reuse them. And I just make sure I have multiple hundreds of them that way. I don't want to be doing that once a month. You know, I want to be doing it from time to time, but I might look into a service like that because I haven't priced that out. I mean, if that's easier and I don't have to think about it, then that's easier and I don't have to think about it.

01:15:26 Jimmy Purdy It's definitely going to be, I mean, it's like a minimum of $80 a week. So really, yeah. It adds up. Yeah.

01:15:33 Jed McClure Yeah. I mean, you're definitely, there's no way. There's no way I'm using 80 bucks a week worth of microfiber towels. But I know, but a shop like this is going to race through that stuff real quick.

01:15:42 Jimmy Purdy Yeah. Like I said, on the, on the back end of it, trying to dispose of the rags is like, that's not even, I'm not even going to go down that, that like, yeah, it's already hard enough to get rid of the filters and the oil and the coolant and everything's got to be separated. It's like, there's no way I'm going to have a barrel of rags that I'm trying to dispose of as well. No. Cause that would just, just be stacking up.

01:16:05 Jed McClure You know, Jimmy, there was one more thing in terms of purchasing like, you know, the type of shop space that would work for automotive servicing that I wanted to bring up. If you don't mind me just get into it. Yeah. Redirecting. So I want to talk about creative financing and this is something that it doesn't have. Oh, this is a good one. Yeah. Yeah. All the time, but it's out there and it's possible. And these deals really do develop. So let's say you own an automotive service shop and you know, you need to buy a property and it's going to be 700,000 or 1.2 million, whatever it's going to be. You know, you've been talking about yourself. You looked into like SBA financing and obviously those really favorable terms on that, right? Like low down payments and favorable interest rates and they guarantee the loans and this kind of stuff. So you've got some good options there. And then I don't know what conventional looks like for industrial spaces. But I imagine you're looking at conventional loans, a dead minimum of 20% down. The reality is though your average guy who has an auto shop and is leasing space and wants to buy is not also on the side, a real estate developer, which is to say the bank doesn't look at that type of person and go, oh, 20% down. They look at that type of person and they go, you've never borrowed this type of money before and we have no idea what's going to happen. Therefore we want 30. Therefore we want 30. We want 35. We want 40% down. Well, coming up with, you know, double digit percentages of $700,000 or 1.2, 1.5 million, hard to come up with. So then what's another route there? Let's say that maybe your credit is not stellar because you know, you went through a divorce and your wife ran up a bunch of stuff on the credit cards, whatever it is, where you were stupid when you were younger and something like this. If the credit and the cash and the ability to get the financing to buy a place aren't there, one thing you can look into is contacting individuals that own these types of properties and trying to see if you can structure an owner carry situation or a lease option that's modeled as an owner carry. So let me sort of get into the details on this. The idea would be you go to somebody, they've got a million dollar property and you say, okay, look, I don't have, you know, I've got a hundred thousand I could put down, but I don't have the $300,000 that the bank is going to require. So I'm going to come with a hundred thousand, go to the owner and say, look, I want you to carry a note for the other nine hundred. I'll put a hundred down. We can amortize it for however many years. And then you show them the math and you say, look at how much interest income you're going to get because you're basically going to be the bank and the seller. So you're going to get your million bucks, but also you're going to loan me that other nine hundred thousand on that owner carry note at seven percent or whatever the going kind of mortgage rate is. And when you calculate out seven hundred percent, a nine hundred thousand dollars over the course of a bunch of years, it adds up quite a bit. And the person doesn't have to necessarily hold the note for the entire, say, 25 year amortization schedule, which would be typical for like a commercial real estate loan. You could say, look, you're just going to make interest on it for the first, say, seven or ten or twelve years. And then at that point, I'll have a bunch of equity in the property. I'll go to the bank. I'll refinance and completely cash you out. That way you can get the meat on the front end of the amortization schedule where a lot of each monthly payment is interest. And when you do the math for somebody and you show it to them like that, they realize like, oh, so, you know, I bought this shop in 1987, right? Got it paid off, you know, five years ago, whatever it is. I've got a million dollars of equity here. I can't I can get the million, but I could get another like maybe four hundred and fifty thousand dollars in interest income. And the reason why somebody would do this is essentially that they're retiring people who are going into retirement. They're relocating to another part of the country. They need retirement income. They've got this asset they build up. They not only had the shop, the business, but they also had the real estate or they've got some real estate. They might have been doing some other like manufacturing or warehousing, whatever it is that the space you're going to pick up. But when they can pad out their retirement like that, that's when it makes sense for them to do something like that. And so the thing to understand is that sometimes not all the time, but some of the time you can find a seller who has a profile that makes it advantageous for them to sell to you and to be both the bank and the seller. And so if you can locate somebody like this and go in and show them the numbers and show them why it makes sense, you can potentially put together a deal where you don't actually have to have a sizable down payment. You don't actually even have to have the kind of credit score that that would cause a bank to lend to you. And you don't have to go through the whole process to even get your credit pulled. And so this type of deal isn't just laying around in that, you know, for every hundred sellers out there that have a space that could work for you and in your business, it's not like 90 of them are in a position to sell you on this term, these terms, but 15 of them might. And so you're looking for that 15%, whatever it might be, for whom it makes sense to sell to you on an owner carried kind of creative financing structure and creative financing is the sort of broader umbrella term for this type of thing. And then you can potentially put together something. And so that's not going to be something that is just automatic where, oh, that's what I'll do. That's what I'll do as a guy looking for a shop space. But it is a possibility. Those deals happen with single family homes. They happen with multifamily. Those deals happen with farmland. They have them with warehouses. They have them with all different types of properties. And there's no reason why light industrial commercial service type properties can't be sold on terms like that, because there's always older people looking to retire. They're out there. Yeah. All it takes is an attorney to write it up. Exactly. You don't need to. And then the other thing is you also can play with it too, because there's another thing selling in installments. So for example, if a guy with a million dollar property sells it to you with 100,000 down, he's going to have $100,000 in capital gains in the year in which you paid him the down payment. And then the interest income he makes is going to be taxed as ordinary income. So it would be taxed just like he had been getting 1099 or something like that. And then the principal portion of each monthly mortgage payment that you would make to him would also be taxed as a portion of capital gains. So he would get like $100,000 and maybe $25,000 worth of capital gains getting taxed at 15% in the year in which he sold. And then the interest on that might be another, I don't know what it would be, $20,000 that year or something like that. So he would have $20,000 of income taxed as ordinary income like 1099, which is a higher rate. And then he would have $125,000 in my little example taxed at 15%. But what that would save him from is having that entire million get taxed at 20% at the federal level and at a higher rate at the state level. So in other words, you can start playing around with the numbers in terms of how much down you're going to put to keep the seller underneath higher capital gains tax rates, both at the federal and the state level. And you can have an accountant or an attorney play with the numbers a little bit and tweak your deal structure so as to minimize the taxes that the seller pays. So if you go to the guy that's 63 years old and his back's been thrown out 15 times and he wants to retire and he's got this property he wants to sell to you and you show him, look, over the course of this deal, I can put an extra $450,000 in interest income in your pocket if you keep the loan, if I don't refinance it for a decade or something like this. And we can structure it so that we minimize your tax income or minimize your tax hit, which puts additional, people can start getting wide eyed if they're really the right profile to sell to a younger guy. You know what I mean? They're going to sell to the young, hungry, energetic guy that's going to come in and do this kind of thing. People can start getting wide eyed when they look at the numbers on that. And I can't deep dive this on a podcast because you need to get a mortgage amortization schedule, which you can get. They're out there. You can just download them online and you got to start playing with numbers and learn a little bit more. There's YouTube videos, there's other stuff, but just understand that owner carries can be structured in such a way as to reduce the tax burden on the seller. They can be structured in such a way as to increase the total yield by adding interest income to what's it called, to the purchase price when they carry. And this type of thing for the right seller can really become advantageous. If you find somebody like that, it's going to take some hunting, it's going to take some looking around. But once you know how it works, if you can find something like that, potentially you can put together a real home run of a deal for you where it's like you didn't even have to get a bank loan and potentially didn't even have to put down a huge chunk in terms of maybe a down payment that is something you actually have rather than a down payment that you wouldn't be able to come up with. It's a good thing to know. If anybody wants to get a hold of me in terms of getting more information on that, I could flesh that out for you a little bit, get a hold of Jimmy and he can put you in touch with me. I could talk to you a little bit about that, but it's something to know about and it's something to explore if you're looking to buy commercial property.

01:25:20 Jimmy Purdy I think it keeps interest out of it as far as paying interest to a bank. So that's getting wiped out of it. Well, what do you mean by getting wiped out of it? Well, you're paying interest to the seller versus paying it to the bank loan. So the seller is keeping that. And then also, obviously it's always kind of a, I guess it's a bummer for you, but you're not paying real estate fees, real agent fees. So you're just paying the attorney for their work, which you're just sitting down for a couple hours to write up the contract. It just keeps a lot of money kind of in play versus going to these different directions.

01:26:08 Jed McClure You could use or not use a realtor. I'll tell you something about realtors. Most realtors do not have a bunch of experience with creative financing stuff because that's not what typical real estate deals are. Realtors list people's houses and sell single family homes and they help buyers buy.

01:26:23 Jimmy Purdy Well, just like a used car salesman. They don't know the car. Most people that sell cars don't know the car.

01:26:29 Jed McClure Yeah, that's right. They talk like they do.

01:26:31 Jimmy Purdy They talk like they do. They wrote the road. They read the same brochure that's sitting in the waiting room, the lobby that everybody else read. But for the most part, you go buy a car. They don't know that car. There's a thousand different models of cars on that lot. They do not know what the mileage is. They don't know the service schedule. They don't know anything. They just said, here's the keys. You want to go drive it, right? I mean, you just bought a new truck. I mean, that's what it was. And then they ask you how your life is. They don't know anything about the V. So it's the same thing. I mean, the less amount of work you can do as a salesman, whether you're real estate agent, car salesman, whatever, the less amount of work you can do on the product that you're selling, the better. Right. Because if you spend your time researching the product, you're not spending your time selling the product, even though if you know the product, you could probably sell it better. But you know what I'm saying? Like, yeah, it's just like you rolling through, you're just selling. Yeah. You know, so you can't really can't fault anybody for that because what are they going to do? I mean, you're going to find out about the house and you're going to know more than the next guy. But obviously, if you can just do a bunch of homeroom deals where people come to you and they say, hey, I'm pre-approved. Here's my letter. I got $800,000 and I got whatever down payment and find me a house. You're like, cool. That's the, that's the one I want. And it's the same with me. If I can get a vehicle comes in off the hook and you put it in gear and it doesn't go, it's like it needs a transmission. Well, that was easy. It comes in with, hey, my check engine light comes on every third day of the month. Can you figure out what it is? Like, oh, that's not the job that I want, but you got to do it, you know? Yeah.

01:28:01 Jed McClure So it's like, it's the same thing. Well, on that note, I'll say this. Like I have helped clients put together creative financing deals before as a realtor. And what I did is I charged a flat rate. So because the buyer already had the seller and the seller already had the buyer. Oh, there you go. That's a good, that's good. I do it. There wasn't really a need for, it didn't make sense for there to be commissions because the seller didn't need me to list their property and find a buyer. But the buyer also didn't need me to help them go find a house. They already had each other. And I had simply told this person like, hey, there's this stuff you can do. So he came to me and I named a flat rate that was like less than half of what two commissions would be. So I would say this when dealing with realtors and creative financing, the first thing to know is that most realtors know very little about this. So you would have to find a realtor who does. Okay. Or you find a real estate attorney and a real estate attorney will know about this. But they may or may not have done. Yeah. A real estate attorney could be a major, major asset for this type of thing. And then if you do find a realtor that can help sit down with the seller and run numbers and play with numbers and kind of finagle the thing and massage it and get it there, a flat rate fee that is less than what the commissions would be. Probably even less than what one commission would be as a sort of like advisory or consulting fee. That would make sense. And I've actually been paid in that format before. So the average realtor is not going to be able to help you out, but some of them are sophisticated realtors very tremendously in terms of their sophistication. Some of them are real sophisticated, really high end professionals. Others barely know what they're doing. So there's that. And then the other thing is that in this case, you're probably not looking at two commissions. So yes, you would be saving commissions for the seller. There's value add for the seller. You're adding interest income to the deal. There's another value add for the seller. And then potentially you can finagle the number so as to keep their capital gains rates lower. Each year. That's an interesting spin on it too. Yeah. So there's multiple ways to sit down and show somebody the math and go, look, you want a million bucks. I can tax savings, commission savings, and interest income. I can pad this by $570,000 over the course of the deal. You're 63 years old. You got a bad back. You need to retire. You need income for retirement. I got your solution right here. Look at this. Yeah.

01:30:26 Jimmy Purdy That's interesting. It's interesting you said too about how real estate agents, because I think the mindset is everybody's is the standard. You got to get a real estate license. So you assume that's going to be the standard and it's kind of like doctors. You get a doctor license, like you're a doctor, you're a doctor. And it's like, I mean, it's just interesting. It's like doctors, mechanics, and lawyers. You know, like you just think there's like a bar and technically with the, I guess with an attorney, there is technically a bar. Technically. And with auto repair, there's a bar too, the Bureau of Automotive Repair, but totally, totally separate. But yeah, there's people in the trade that are very professional. That actually do the work to fix that headache vehicle or find that creative solution. And there's other ones that just skate by and they don't want to do it and they don't take the extra time. So just any rest across the board, you know, if you're in a position where things just aren't moving forward, you got to pivot, you know, something's got to change. You got to shift. You got to get somebody else. It's like, you got to make a change and make it work because there's just different. Yeah, it's just, it's an interesting thing that you brought up there because it is true. It's like, just because they have the label or the name, just because they're a technician or whatever, just because whatever they are, doesn't mean they're at the top of their game.

01:31:41 Jed McClure It's really interesting. I mean, you know, my daughter had a medical condition and we went and saw a specialist, an endocrinologist, and, you know, I was doing research and found some like peer reviewed scientific, you know, medical research, new stuff that pertains specifically to some of the particulars of her condition. So I printed this article out and I brought it to the endocrinologist and I showed the endocrinologist this and she kind of like looked wide eyed at it and she said, oh, well, I'll have to look into this. And I immediately was like, what the heck? What am I paying you for? Oh yeah. You're a specialist. Like you did a residency and she was older too. She had been an endocrinologist. Like you're not just a doctor. You're not even a general practitioner. You're a specialist. I'm not supposed to be introducing you to the latest research in the field as it pertains to my daughter's particularities with her condition. You're supposed to tell me about this stuff. And so it's interesting how lazy people can get. Like I've noticed that with lawyers too. I hired a lawyer for a matter one time and the guy was just an idiot. I don't think he knew much at all. I think he was, he'd gone to law school like late in life. I hired him because he was cheaper than the others and I got what I paid for. Yeah, that's another thing too. And then, yeah, and then there's a law firm that I've used for multiple multiple matters down in San Luis Obispo. And like there's two, three lawyers that I've used there and they're all just sharp as razor blades, man. They're just, they're real quick. They're real fast. They get everything done. They're smart. They know what's going on. So the variance in these different professions, whether it's auto repair, real estate brokers, lawyers, doctors, I mean, it's huge, man. The best doctors are 20 times better than the worst doctors. You know, they're not 100%.

01:33:22 Jimmy Purdy It's like, it's not even, it's not even, you can't even, it's not even on the same paper. And I'm the same ballpark. Exactly.

01:33:27 Jed McClure It's amazing. It's like, it's like, they're not involved in the same profession, but they are involved in the same profession.

01:33:32 Jimmy Purdy And they're giving everyone else a bad name, you know, the bad ones. And it's the same thing with the doctors. Like you go to a doctor that I've been to 15 doctors and no one knows like, well, 15 doctors is a lot, but it's not a lot. You know what I'm saying? Like it's just because you would. And it's like, from that point on, not only them, but everyone in their family is like, doctors just don't know what they're doing. Cause I've been to, my mom's been to 15 doctors and they know, we can figure it out. It's like, well, you gotta, it's like, it's sad because it does, it brings the whole industry down no matter what the industry is. If someone's not staying on their game, staying up to date, someone comes to them and it gives that whole industry a bad name and there's no bar. There's no like, like, where's the line that you draw. And just like you said, with the specialist is like, I mean, the correlation between doctors and mechanics are always something that gets translated. And I hate doing it because they're obviously much more educated than I am, but the, I'm also specialists as far as transmissions are concerned. And so I put a lot of pressure on myself to make sure that if the transmission issue comes in, I always have the technology, the education I've stayed up to date with what's going on. And I try to stay on top of that bar of all the time. Like I have the standard that I have to constantly achieve and constantly work for, because I'm a specialist and I have that pressure that's put on me to do that. And some, and it's just amazing. Sometimes they just lose that and they like, yeah, they're a transmission shop, but they don't do eight speeds. They don't do 10 speeds. It's like, dude, you gotta like, if you're going to claim the fame, like you got to stay on top of this stuff, man. Like, you know what I mean? Yeah. Same thing with being like a specialist in the medical field. It's like, yeah, I mean, patients are definitely the best advocate if they do the research on their own. They're the most motivated and it's amazing how many people I come in and they've done all their research and they're not always right, but a lot of them are on the right track and they're not doing this for a living, but they're motivated, right? Like they're motivated to figure out what the problem is and they do more research than anybody else would have them. And I of course come to the same conclusion, but it's like, wow, that's impressive. Like that's a lot of research that you did for no reason. You're paying me to do it anyway, but in your case, you had to do it. Otherwise you wouldn't have figured it out. Right. No. So I mean, yeah, it's, I don't know what the answer there was where I was going with it, but it's definitely interesting. Yeah. Yeah. Do you hear that? Well, cool, man. Yeah. I guess if anybody wants to get in touch with you, you would want to do a shout out to where they can find you online or?

01:36:02 Jed McClure Yeah. Well, if you want to reach out to me for real estate services, my name is Jed McClure, last name McClure, M-C-C-L-U-R-E and I'm at 805-835-663. I'll just throw my direct number out there. You can just call or text, say hi. If you've got a question about real estate or you or somebody you know needs to sell or is looking to buy, I'm not a commercial property specialist. There's only a couple of those in this area. It mostly doesn't make sense to do that. I've done a little bit of commercial, but mostly I do single family and multi-family, a lot of single family and multi-family investment properties. Cause I used to flip houses and stuff like that. That's really more where I've been a specialist. And then wine tours, I'm Paso Robles Wine Tours and that's all over Yelp and all that kind of stuff, easy to find. And then if you need self storage, I'm Mission Mini Storage in San Miguel and I got three different size units. And so yeah, three businesses and three different things. So if you want to get ahold of me, I won't be hard to find.

01:36:58 Jimmy Purdy Cool, man. Well, this has been good. Thanks for coming in.

01:37:01 Jed McClure Thanks for having me on, man. I had a good time. It's nice to just have a chat, shoot the breeze a little bit about a bunch of topics and all over the map, but I hope somebody learns something. We were, we were all over the place, but hopefully, hopefully a value. It was. Thanks, man. Right on.