Personal or one-time expenses the seller ran through the business (country-club dues, family payroll, boat, travel). Add-backs are legitimate when documented and recurring expenses are removed. Clean, verifiable add-backs can increase SDE (Seller's Discretionay Earnings), and therefore valuation, by 20–50%. Buyers who challenge sloppy add-backs often negotiate the price down dramatically.

Asset sale means you buy the pieces (equipment, customer list, goodwill) and start fresh with no hidden liabilities. Stock sale is when you buy the entity itself, inheriting everything (good and bad). Cody Sanchez strongly prefers asset sales for first-time buyers because you get a clean slate and step-up in basis for depreciation.

Brokers list deals publicly; off-market deals are direct to owner and have far less competition. Cody buys 70–80% of her deals off-market because prices are lower and terms are friendlier. Off-market requires hustle (cold outreach, networking) but delivers the best returns.

When a seller has been trying to sell for 12–24+ months and just wants out. Fatigue creates massive negotiating leverage. Cody often closes tired sellers at 20–40% below asking. Patience and persistence turn fatigue into fortune.

The 30–90 day period after LOI (Letter of Intent) where you verify everything the seller claimed. Cody’s rule: assume everything is a lie until proven otherwise. Bad due diligence is buying someone else’s nightmare. Good due diligence leads to sleeping well after closing.

Portion of the purchase price paid later based on future performance. Sellers love earn-outs because they get more money if the business keeps growing. Buyers hate them because they stay on the hook. Cody uses earn-outs to bridge valuation gaps and only pay for growth with growth.

The parent entity that owns multiple operating businesses. Lets you share overhead, move cash tax-free, and build a mini-empire. Cody’s endgame is to have one HoldCo owning laundromats, storage, car washes, etc.

Non-binding offer that locks price and basic terms before expensive due diligence. Cody teaches sending an LOI within 48 hours of liking a deal. Speed + certainty wins on Main Street.

Traditional, cash-flowing, 'boring' businesses (laundromats, storage, HVAC, pest control) that Wall Street ignores. Cody’s entire playbook is built on acquiring these because they’re financeable, understandable, and sell for 3–5x SDE (Seller's Discretionary Earnings). Main Street creates more millionaires than tech ever will.

How many times SDE (Seller's Discretionary Earnings) a buyer will pay (typically 2.5–5x on Main Street). Higher multiples come from recurring revenue, low owner involvement, clean books, and growth potential. Cody’s goal: buy at 3x, grow to 5x, sell.

Seller agrees not to reopen nearby or poach customers/employees for X years. Cody negotiates 5–10 year non-competes because goodwill is the most valuable asset you’re buying.

Business for sale that isn’t listed with a broker; often found through direct outreach or relationships. Less competition means a lower price and better terms. Cody’s favorite hunting ground.

Third-party report that verifies SDE (Seller's Discretionary Earnings) is real, recurring, and sustainable. Cody requires a QoE on every deal over $1million. This removes surprises and justifies (or negotiates) the final price.

Buy one platform business, then acquire add-on competitors and consolidate. Think “Planet Fitness of laundromats.” Cody’s favorite way to 5–10x a business in 3–7 years.

Government-guaranteed loan that finances 75–90% of the purchase with only 10–15% down. Cody’s #1 “no-money-down” hack for Main Street. Turns $50K–$100K cash into a $1M+ business.

True cash flow an owner-operator can take home (EBITDA + owner salary + add-backs). The valuation metric for businesses under ~$2M revenue. Clean SDE at 3.5x is Cody’s sweet spot.

EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a financial metric used to measure a company's operating performance and profitability by adding back these specific expenses to net income. It is useful for comparing companies in the same industry, assessing a company's operational health, and evaluating its ability to generate cash flow, particularly for loan repayment or acquisition purposes.

Raise money from investors to search full-time for one business to buy and run. Higher-risk, higher-upside version of Cody’s model. Many Contrarian Thinking members run search funds.

Seller acts as the bank and finances 10–50% of the purchase price over 5–10 years. Reduces bank risk and often gets you a lower price. Cody loves seller notes because they align incentives.

It can be good for the seller too because it may lower their taxes from sale proceeds.

The coming wave of baby-boomer owners retiring with no buyer looks like 60–80% of small businesses will simply close. Cody calls it the greatest wealth-transfer opportunity of our lifetime. Trillions in GDP and millions of jobs at stake.

Seller stays on 30–180 days post-close to train you and introduce customers. Cody insists on 60–90 days paid transition. Prevents revenue drop and transfers goodwill smoothly.