Transcription
What would you do with $1,000? All right. So, for whatever reason, when I see $1,000, I think um about the wedding rental business. Do you know anything about that?
No. So, believe it or not, um weddings are increasing in popularity. People are getting out, uh getting married outside more than ever. I think like 75% of weddings are outside now, which is increasing every year. Um, and that increases the market for these random one-off rentals, right?
I read an article on Reddit about a guy that built a wedding arch from his garage with some 2x4s, some lumber. I think he spent like 200 or $300 to build it, and he rents it out to weddings for like $1,000 per wedding. And it's just a a piece of wood for the couples to stand under as they say, I do, right? And so he works with event organizers or wedding organizers to continually rent it to the wedding organizer. Exactly. He doesn't go through the brides. He goes through the wedding planners cuz surface area. They have they're touching all kinds of weddings on a regular basis.
To find these wedding planners, you go to the knot. You go to Zola wedding wire. You scrape them and all of their phone numbers and emails and names and businesses are on the website for everyone to see. And you just start reaching out. and one contact could be one wedding a week. So that could be started that could be in the $500 box, right? Mhm. You could spend $300 on supplies. You could spend $100 on scraping all the emails quite cheaply. Um and then you could spend $100 on gas and then or let's say another $100 on renting a truck and trailer from Home Depot. Say you have a car. Say you don't have a car, right? you've got $400 left over to go to a nice meal or to uh or for Facebook ads.
So, photo walls are very popular. Shakuerie carts where wedding uh patrons can make their own shuderie board. Um you can do like custom pizzas at weddings. You could do wedding arches. Um there's a lot of different opportunities there. Weddings and funerals. Yeah, cuz everything you said there could also apply to funerals. That's true. They don't seem to be stopping either. Guess funerals are going to get more popular with the population. Yep. Continuing to increase. What else? So, wedding rentals is the first one you do with $1,000. Anything else?
Yeah. Should we do a an online one? Sure. So, there's a lot of people nowadays making money with local email newsletters. Are you very familiar with that?
No. So, basically what you do, we keep coming back to this is like a big ad for Facebook, right? I swear it's not, but um people are using local Facebook ads. Um let's say you live in Boise, Idaho. There's 200,000 people there. You post a Facebook ad that says, "Hey, find out what's happening in Boise, Idaho. One email per week in your inbox. You can acquire a subscriber for about 50 cents from Facebook or Instagram." Okay, let's call it a dollar to be to be more conservative. Acquire a subscriber for a dollar. If you sell ads inside that email newsletter, you can charge about 50 cents per month um per subscriber.
So, if we had $1,000, I would use a free trial for an email newsletter software like Beehive or ConvertKit or any of those. And so I've already spent $0 and I would give all $1,000 to Meta. I would set a defined radius in a local area. Preferably it's where you live, but it doesn't have to be. It could be on the other side of the world. I've launched this. I tested this in New Mexico and it worked. I'd spend $1,000 to acquire a thousand subscribers. Um, and then I would start sending them weekly newsletters. What's happening in Boise, Idaho? Um, discounts in Boise, Idaho. News in Boise, Idaho. I would not use Chad GPT to write it. I would write it myself in my own natural language whether I'm a good writer or not. Why? Because it needs to feel personal. It needs to feel like a local is writing it. Not like an author, not like Chad GBT. Um, and then I would use those same subscribers to source sponsors. So Bob's Car Repair owner is potentially in your list. There are 10% of all adults are business owners, right? So, if I have a thousand email subscribers, a hundred of them are going to be business owners are going to be potential sponsors to my newsletter. So, after a month or so, I'm going to put send out an email that says, "Hey, your ad here. I'd love to sponsor your business. It's a very relevant market. It costs $500 uh per send to send your email." Um, so then if I spend $1,000 to acquire these customers, I will get that money back within two months because I'm I'm making $500 a month. 50 cents per subscriber from a,000 newsletter subscribers. And that can scale um as much as you want. If Boise, Idaho is only so big, you copy and paste the template in another city or a bigger city.
Okay, let's move up then. This This briefcase has a lot more money in it. Mhm. $5,000. What side hustle do you start if you've got $5,000?
Okay. So, if we've got a sliding scale of active to passive income, the closer you get to this to $5,000, the more realistic the passive income becomes. Okay. So, I'm going to go closer to that. Um, I love RV parks. What's an RV park? An RV park is one of two things. It's a place for someone to live in full-time for months or years at a time where they live in an recreational vehicle in an RV. A camper van. A camper van. It could be a fixed income uh retired person. It could be a bluecollar worker. It could be a a digital nomad. Right? That's kind of the three categories. Um, the other type of RV park is a a recreational, like a more short-term RV park that might be right outside of the Grand Canyon or, you know, a popular tourist destination where people are staying one to four nights at a time, right?
This is a business I've been in for about 7 years now. They have very small RV parks out there that are 3 to 10 pad sites that are about 3 to 10 times more profitable than buying a single family home as a rental. Okay. So, I genuinely I don't understand why people buy single family homes because like buying a small RV park costs the same but is significantly more profitable and more flexible because you have your your risk is more distributed amongst five to 10 tenants as opposed to one tenant that could go bankrupt or disappear in the middle of the night.
So, with this $5,000, um, I would call every small RV park in my area, preferably within a three-hour drive. I would just find them on Google Maps. This would take a little more time because we can't allocate any of this budget to the finding of the park. We've got to do that very manually with the our iPhone and our internet connection. Okay. I'm going to find, in my experience, for every 100 parks I find, about two or three of them can be a really good deal. Okay. So, if I get a 100 people on the phone, I I know I can find one good deal from that with seller financing because we can't use any of this to buy the park either. Got a lot of constraints. I'm going to use uh let's say 2,000 of these dollars um for my due diligence. I've got to get inspections on the park. I've got to get a title policy on the park to make sure it's not a scam. To make sure that the owner who says they own it actually owns it. Um, and then with the remainder of the money, I need some operating capital. I need to be able to pay the power bill to maybe trim some trees to get the park looking nice on day one. And then to actually buy the park, I need to set up creative financing with the seller. And the best way you can do that is by building a relationship with the seller, building some trust with them, um, showing them that you're going to take good care of the park.
Now, the unit economics on this, let's say you buy a park for $200,000. In the real estate world, they're valued on a cap rate basis, which is the profit of the park divided by the asking price of the park. So, if I buy a park for a 10% cap rate, that means it's going to make $20,000 a year of profit and it's going to cost me $200,000. Okay? So, that park probably has no website. It probably has way undermarket rents. It probably has occupancy issues because they're it has no website. They're not doing anything. So, I'm going to get the park to perform by literally posting ads on Facebook Marketplace, free ads, making a free website with a vibe coding app and um and increasing the occupancy. And that $20,000 a year goes to $30,000 a year and the park is worth an 8% cap rate. You bought it undervalued at 10%. So it's now at $3, I don't know, $60,000 park that you paid $200,000 for. So you can either sell it or you can just manage it um and enjoy the profits.
When you said seller financing, what what does that mean? That means the seller is holding the note. They are bearing the risk of you buying the park, but what's in it for them is a they can get the park back if you default. Okay. So, they're not actually giving you the park up front. They're letting you have it today on the basis that you'll pay them in the future with profits you make. Exactly. So, you're making monthly payments to them. Um because often times they're going to take that money that you give them and they're going to have to invest it in something else, something they don't understand. So, your pitch to them is, "Hey, you know this park better than anyone, right? you know what I can do to fix it. You know what the deficiencies are. If for some reason I'm not who I say I am, you just get it back. You take it back and you where you started and you keep all the money that I've paid you some so far.
How much money have you made from doing this? I've made net profit probably 4 to $600,000 revenue. I would say between 3 and 4 million a year with these RV parks and mobile home parks as well. Yeah. How many of them? I've been involved with 35 or so over the last seven years. What a bad business. No, I mean, you're capitalizing on baby boomers retiring and on millennials traveling and on Yeah, it's just it's a growing market. People are getting outside more. Yeah.
What What are the macro things you you think about at the moment when you're trying to decide on a new side hustle or a new business to start? Are there like obvious macro things that are happening that we should all be thinking about? you just can't ignore AI. Like whatever you're doing, AI has to be part of it. So I like the the framework of implementing new AI tools into old businesses. And I like the framework that 10,000 um baby boomers are retiring every single day and that will be the case for the next 5 to 10 years. What's the opportunity there to either buy the businesses or to implement AI into the businesses? Um those are the two biggest opportunities I see.
Let's do get them to give you the business. So, and you run it better in a more digital way. Yeah. And you pay them off for that business when you've made profit from it. If you don't make the profit, they get their business back. Yes. Now, I will say finding seller financing on a business is harder than on a piece of real estate. Um, but it is possible.
Of all the businesses you you've started, which one has been most profitable? And was the easiest? Oh, man. So, like what is the winner? I would say either um my RV parks business or my my Texas snacks business, my e-commerce business. Um and they weren't easy because they're easy businesses or industry industries. They're easy because I had matured enough to a point to find good operators to run those businesses where I had little to no involvement in them. Does that make sense? Yeah. You found people to run them for you so that as a starter they didn't die the minute you got bored. Exactly. Whereas they carried on growing and evolving. Right. Whereas those are both quite hard industries. E-commerce is quite hard and uh and real estate is as well. But I had good operators.
What have you learned about finding good operators? H. Oh man, it all comes down to trust. How much trust am I able to put in them? How much trust do I have them? I've found a um a direct correlation between people I know really well um and people that have made really good operators.
How do you incentivize them? Directly from the profits of the business so that they feel more like a entrepreneur. they've got more of a of a piece of the pie. Yeah, I made the mistake in my 20s of dangling a carrot of equity too often. Genuinely meaning it like but it most equity goes to zero period. Um I put a lot more emphasis on cash flow now in my 30s than I do on equity. I think equity is overrated. And so nowadays, I'm less likely to give an operating partner equity, not because I don't think they deserve it, but because it's more likely to go to zero, and I'm more likely to cut them in on the profits so they can get paid ongoing on an annual basis or quarterly basis, etc. Quarterly. Yeah. Interesting.
H is there any side hustles that you've heard about that you wish you'd started? It's funny because a lot of the ones that I wish I started, I started. Like a lot of the 80 that I've done, I just it's something that I thought about for 2 weeks. I can't get it out of my head and I just I have to get it out of my head. And so if I start something and it fails, I don't really care because I don't invest a lot of money into it. And I answered the question. I don't have to like stay up at night wondering if that thing would have worked anymore. Sometimes I'll like run these tests on Facebook that show me such amazing results that just kind of unlock an opportunity for me.
Can I give you an analogy? Yeah. Have you ever been deep sea fishing? Uh, not deep sea fishing. No. Okay, so here's a real story. I was out deep deep sea fishing and we were just throwing lures and we weren't getting any any uh bites. And the captain reaches in under the seat and he pulls out straws from McDonald's, McDonald's straws specifically because they have red and yellow stripes along the side of them. And he pulled out scissors and he started cutting them into fourths. And then he he took the hook off the line and he he put the string through the straw and then he tied the hook back on. He's like, "I know, seems crazy. Just stick with me." And we casted it out and we started getting bites. And I'm like, "What is it was the same place with the same lure, same hook with just a straw." And I'm like, "What? Why does this work?" And he's like, "It's the colors. It's like the white and the red and and it just spins as you reel it in and it it mimics a fish." And I was like, "How did you learn this? Like what made you think to try this?" He's like, "I don't know. Uh maybe alcohol was involved. I don't know." But like that worked and we started catching fish the rest of the day. So it just got me thinking like entrepreneurship is this massive ocean with millions of varieties of fish, billions of fish, some sharks, some minnows. And so many of us go out there and we cast a few times and we just go back home. We're like, "Entreneurship doesn't work. It's not for me. Back to the 9 to5." But we're not testing enough stuff. There's different depths. There's different baits. We could spray something on it to make it smell different. We could put a McDonald's straw on it. And occasionally we'll find something. We'll get a bite. And maybe we won't get another bite for another hour, but the bite is a signal. And it's like, oh, there's something there. Okay, let's try that again, but try this. Or maybe let's just cast a 100 more times. And then you get a fish. And then you get a bigger fish. And like the more you're out there, not just focusing on one type of fishing, but increasing your surface area and trying all kinds of different things, the more you learn. Like the more you you test and like now you have a bunch of sharks in the boat and you have this and you have this and you have all these options at your disposal. We're eating shark tonight. We're eating grouper. We're eating snapper. You have this amazing life that's dynamic and full of color and all these other awesome things are coming into play because you stayed out there and you didn't just do one thing, you tried all these other things. So that's how I look at business. Like I'm out there on the ocean testing other things and even if I don't catch anything, it's fun. And uh I think other people should try that too.
A lot of people want sexy stuff, don't they? They want to build the next Facebook or they want to do the a chat GPT or the AI app that does this, that, and the other. Do you think that's in part a trap for for the average person to be aiming at sexy? Yeah. Because the fact that everyone wants sexy means the fact that the sexy things are the most competitive. It's the exact reason why we should go as unsexy as possible because no one's looking at it.
And looking forward, Chris, what is um is there anything that you're mulling over now in terms of new business ideas that you could give me? Man, I lately it's been about like stuff I can launch with my content. Um I like I love the phrase unfair advantage, right? I will only start businesses today where I have an unfair advantage. Everyone has an unfair advantage in something, right? Even a a 13-year-old has an unfair advantage. they might know roadblocks better than anyone, right? So unfair advantage is not, you know, only for the rich or the wealthy or the elite or the most experienced or the PhDs, right? So I try to start businesses where I have an unfair advantage and that might be because I can grow it with my content. It might be because I have a bunch of friends in that space or I have a unique knowledge or insight into that space. So if I have a zillion ideas and a spreadsheet a mile long with a bunch of business ideas, the ones I'm most likely to start are the ones where I have an unfair advantage. a right to win. Yeah.
I have this phrase called mirage opportunity which um which I use when I look at an industry that never seems to work for anybody but seems so obvious. Mhm. Do you know what I'm saying? Yeah, I do. I'm thinking of something. Yeah. And I this has been a bit of a a way for me to know what not to work on is if I see everybody trying to solve this particular problem and nobody's been successful yet more and more people are plowing in and yet it seems obvious to me I just stay away from it because there's something in my understanding of consumer behavior or current alternatives that I'm like misunderstanding. Mhm. An example I'll give you. Everyone at the moment is trying to start a so this is the first the sort of first principles they're reasoning up from. They're saying people are more lonely than ever before. They're saying there's no clear place to organize a group of people. WhatsApp has its um has its limitations, its restrictions, doesn't have the feature set one would like. Facebook groups aren't working for a certain generation of people anymore for for sort of Gen Z's and younger generations, millennials. So, what I'm going to do is I'm going to make an app for groups. Mhm. Your run club, your friends, your piano recital group, your your entrepreneurs. We're going to build all the group features into this app and it's going to be dedicated to that. I've heard this pitch over and over again. I've seen all of them. None of them seem to have any traction or work. It's a mirage. Something fundamental about your assumptions is off. Yeah.
When I said mirage opportunities, did you think of anything in particular? I stay away Yeah. Just I stay away from businesses where where I I don't know why it's not working, but clearly it's not working. Yeah. I think of banking or healthcare, right? Like banking is terrible. Like look at the UI at Bank of America. It's why is it it's like h it's probably like that for a reason, right? Or like Amazon's UI is terrible. It's like what is it? It's like they probably know why it looks like that, right? I assume they're smarter than I am. One idea that I thought of is P like everyone hates typing in their password a zillion times a day. So you have like these password managers, but I've seen a dozen companies that are like going to fix the password, right? Some like replacement to a password, and they've all failed. And it's probably because it's it's a really hard problem to solve. And I don't want to try to invest in a person that's trying to solve it cuz statistics are not on their side. Another one that comes to mind for me is at university, every entrepreneurial college kid decides that they're going to build a on campus what's going on app to let everybody know what's going on on campus. Yeah. And they never seem to work. Yeah. And I think the reason why they don't work is because both you're losing 33% of your potential customers every year and gaining 33% new customers every year. So you have a bit of an acquisition problem, but then also people don't decide what they're going to do based on some notice board. They decide based on their dorm room friends and where they're going and where the girl they like is going. And you and so it's not really about what's going on. It's like what does my group of people want to do. I think that's I think that's the mirage in that.
Well, I thought of another example that's like building apps around podcasting. Oh my god. Yeah. Right. Yeah. Yeah. I have a friend that he had a podcast. It's a great one. That helped podcasters, right? And it was great. Like really I listen to it and he he realized over time like I'm selling to a market that quits, right? I'm asking for customers to pay for my thing that are statistically like 95% of them are going to quit within 6 months. So it's just a broken market to sell to. And then the 5% that are successful, what percentage of them are actually profitable? What percentage of them can afford to pay for an expensive agency or software? Very few.
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