00:00:00 · Mikk, Justin Escajeda
[00:00:00] S0: Today's guest, Justin Escajeda. He's 44 years old and owns 12 trade businesses around Pittsburgh, employing roughly 250 people and generating more than 50,000,000 in annual revenue. But what makes Justin's story interesting is that none of this started with a plan to become an acquisition entrepreneur. So we cover it all today. Thanks a lot for coming to the podcast, Justin. [00:00:26] S1: Yeah. Thank you for having me. Appreciate it. [00:00:29] S0: Now before that first roofing company and before it came along, buying businesses wasn't wasn't part of the plan. So take me back to the moment and how it all got started for you. [00:00:45] S1: Well, I mean, I I I could say that prior to buying any businesses, it was just construction and rental properties. And and I did that for a number of years. And, you know, that... That's what I that's what I thought I was gonna do the rest of my life, rest of my career. You know, I... Aside from masonry, more specifically, was involved in single families, multi units, storage unit facilities. Me and two of my friends owned a couple indoor storage unit facilities and trailer parks. [00:01:24] S0: Okay. And then how the first acquisition happened? Take me back to 2018.
00:01:24 · Mikk, Justin Escajeda
[00:01:24] S0: Okay. And then how the first acquisition happened? Take me back to 2018. [00:01:32] S1: Well, the first acquisition that actually closed was just basically a local roofer who had built a very good small business for, you know, I think he was in business for about forty years. And we... He would call... He was local to us in Pittsburgh, and he worked with us a couple of times. We'd fix chimneys for him on his roof jobs and this and that. So there was a little bit of relationship there, and he ended up doing a roof at my brother in law's house and was talking to him about, you know, I wanna sell my company, I'm getting out of it. And yeah, I mean, one thing led to another and we just, we closed, you know, and it was a pretty seamless acquisition. But, you know, I tried to buy back in 2016, I tried to buy a masonry company and, I mean, we almost closed, but it was about a month before, you know, it was on the other side of the state, but about a month before the owner, he did not want to sign a non compete. He still wanted to do like little jobs and pick and choose what jobs he did. I said, no. You know, he says... And I remember him saying, he's like, oh, you don't want those little jobs. I said, yeah, I want all those jobs. You know, if I'm buying the company, I want I want all of it. You know, I want all your relationships. I want your consulting, you know, not like you... You know? So that was a bummer. But but, yeah, the the the first one that closed was was was a a roofing company. It was it was really great. It really... And still still continues to be.
00:03:10 · Mikk, Justin Escajeda
[00:03:10] S0: Okay. Were there a lot of synergies when it comes to going forward from there? And maybe you can share a bit on the on the size which which... Your business which you've built and the one you bought. [00:03:22] S1: Yeah. The the masonry company at the time was doing about $66,000,000. And, you know, it's definitely grown since then, not by leaps and bounds, but it's grown a good bit. But the roofing company, it was not your stereotypical reroof shingle company. It was repair mostly. Slate, copper, terracotta tile, flat roof repair, and it was generating about 2 to 2,500,000 a year. And it's not, it's a little higher than that now, but not far from it. We have, like I said, we haven't changed it much at all. It's still run very well. And, you know, a lot of the same guys are still still working there. And yes, like I said, there's a lot of synergies between masonry and roofing, obviously. So we definitely help each other out in that respect. But, yeah, that that one that one stayed very, very much the same as as as when we bought it. [00:04:34] S0: And what was the structure of the of the first first official acquisition for you? [00:04:39] S1: Structure as far as [00:04:41] S0: Like, how how how big was this company? How much did you did you pay if you're willing to share? And how much... Like, did you do any diligence on this? And how was how was the whole story of this one?
00:04:41 · Mikk, Justin Escajeda
[00:04:41] S0: Like, how how how big was this company? How much did you did you pay if you're willing to share? And how much... Like, did you do any diligence on this? And how was how was the whole story of this one? [00:04:51] S1: Yeah. My diligence was pretty I mean, I didn't really know exact... You know what I mean? Like, I didn't do a great deal of research on, like, how to buy companies. I kind of stumbled my way through it. You know. But we got an SBA loan. The company was for about 800 and... 837,000 or 867,000, I think, when it came down to it. And we got an SBA loan for it. And to be perfectly honest with you, the going all the way through that process, you know, the bank essentially, you know, really coached me on how to... The process of closing on a closing on a business, you know? So I give them credit where credit is due, but... And I I didn't, you know, I didn't have to take any courses or anything. I just... They just told me exactly... It was tough. Don't get me wrong. Get... If anyone listened to this got an s... Ever got an SBA loan, it's it's not exactly a a comfortable process, but it's it's it's monotonous. It's long, but it, you know, it turned out pretty good. [00:06:06] S0: And now after the first acquisition, did it like some some shape or form, like opened your eyes that you can really expand your portfolio by by just acquiring these type of businesses? Or what was the thought process and maybe maybe a lesson and takeaway from this for you?
00:06:06 · Mikk, Justin Escajeda
[00:06:06] S0: And now after the first acquisition, did it like some some shape or form, like opened your eyes that you can really expand your portfolio by by just acquiring these type of businesses? Or what was the thought process and maybe maybe a lesson and takeaway from this for you? [00:06:20] S1: Yeah. It was definitely an moment after the first year, because you gotta remember something too. I bought I bought that roofing company in probably the worst time of the year for roofing. We closed in January. And so I had about three months of roughing it, you know? And there's not a lot roof work you could do in the Northeast in the wintertime. And so, like I said, but after the first year, it was very evident to me that this is a very sustainable way to grow. And I think it was so much easier than starting a new company from scratch, because I had started a couple companies from scratch, it is, in my opinion, I know some people enjoy it, but in my opinion, it's tough. It is very hard to get into the market you're in to be a new guy. I'll tell you, if don't ever have to do it again, I never will. I really would not. To be perfectly honest, I think I could say with with pretty much full certainty that I will never intentionally start a new company ever again in my life.
00:06:20 · Justin Escajeda, Mikk
[00:06:20] S1: Yeah. It was definitely an moment after the first year, because you gotta remember something too. I bought I bought that roofing company in probably the worst time of the year for roofing. We closed in January. And so I had about three months of roughing it, you know? And there's not a lot roof work you could do in the Northeast in the wintertime. And so, like I said, but after the first year, it was very evident to me that this is a very sustainable way to grow. And I think it was so much easier than starting a new company from scratch, because I had started a couple companies from scratch, it is, in my opinion, I know some people enjoy it, but in my opinion, it's tough. It is very hard to get into the market you're in to be a new guy. I'll tell you, if don't ever have to do it again, I never will. I really would not. To be perfectly honest, I think I could say with with pretty much full certainty that I will never intentionally start a new company ever again in my life. [00:07:37] S0: Maybe you can add here. What's maybe something builders understand, like folks who bootstrap a business that acquisition entrepreneurs often don't because many of the listeners as well, they they often don't start a business. They they they are with a investment banking or private equity background, and they just go and first thing and acquire a business.