$250k in passive income from ONE acquisition (a deal breakdown)

Here’s a fun acquisition success story from one of my students inside Acquisition Ace.

In 2023, Kris was working for Chevron in Northern California.

He was making good money, but had been toying with the idea of investing into a business near Los Angeles.

He caught wind of a deal at work about a structural steel supply company being put up for sale... but by the time he went to put in a bid, the opportunity was gone!

That was the last straw for Kris.

He told himself, “I’ve gotta find out how to do this.”

So he Googled around, stumbled upon Acquisition Ace, and — as a complete novice with zero acquisition experience — decided to enroll.

Kris researched potential acquisitions and ran them by me one by one as I coached him through the process.

Eventually, he came across two viable options:

Another steel supply company, and an oil pump maintenance business.

The steel company was his first pick, but they kept giving him the runaround during negotiations.

The oil company was a slightly less profitable deal. But since Kris has a ton of experience in the oil industry, and the owners were ready to pull the trigger, he decided to go all-in on that instead.

All said and done:

Five months after joining Acquisition Ace, Kris purchased the oil pump maintenance company for $2.6 million!

Here’s how he structured the deal:

Kris got an SBA loan to cover the purchase price with a down payment of 10%.

He paid 5% out of pocket (around $135k), plus closing costs, for a total of $150k.

The sellers then matched that 5% with $135k of their own money, putting it on full standby — which means Kris doesn’t have to start paying back their half for 2 years.

Both sellers agreed to stay on for 10 years (with a salary cut) since they’d been running it for the last three decades, and were passionate about their work.

The result?

Since the company does about $550k per year in cashflow, Kris is able to:

• Pay off his $150k/yr SBA loan...

• Pay the company’s operating costs and employee salaries...

• AND pay himself $250k per year on top!

The best part is, he only has to work 10 hours per week on growing this business, which means he can keep his job at Chevron until he’s ready to jump into full-time acquisition entrepreneurship.

(Last I heard, he was planning on acquiring a fabrication shop as his second deal!)

Like I’ve been saying...

Buying businesses isn’t just a game for private equity groups.

Regular people like Kris — and my other students inside Acquisition Ace — do it all the time!

For more step-by-step guidance on how to acquire your first business (or passively invest as a silent partner):

Just fill out our 2-minute Investor Survey here, and let us know what kind of deals you’re interested in.

We’ll be back with more acquisition strategies and case studies every Tuesday and Thursday.

See you then!